Washington Low-Income Housing Tax Credit (LIHTC) Program

The Washington Low-Income Housing Tax Credit (LIHTC) Program, administered by the Washington State Housing Finance Commission, is one of the most impactful tools for addressing the state’s housing affordability challenges. The program leverages federal tax credits to encourage private developers to build and rehabilitate low-income housing in Washington, providing safe and sustainable homes for low- and moderate-income households.

 

LIHTC benefits vary from the urban landscapes of Seattle low-income housing to rural communities, thereby increasing the number of accessible affordable housing in Washington as it revives neighborhoods and local economies.

  

The program’s core focus is on long-term affordability, and it plays a critical role in housing equity and stability around the state. 

How the Washington LIHTC Program Works

 

The Washington LIHTC Program provides financial incentives to developers by offering tax credits that reduce development costs. In return, developers commit to creating subsidized housing in Washington, including low-income apartments in Seattle, Washington, or rehabilitating older properties to meet modern standards.

 

Goals of the Program

 

• Expand low-income housing in Washington across urban, suburban, and rural areas. 

• Ensure housing equity in high-cost markets like affordable housing in Seattle and Vancouver. 

• Promote long-term affordability for at least 30 years. 

• Foster mixed-income developments that include low-income senior housing in Seattle. 

• Support projects near transit, schools, and employment hubs. 

• Incentivize energy-efficient and sustainable housing construction. 

• Address underserved communities, including rural counties and high-demand urban areas.
   

Key Features

 

• Serves households earning 60% or less of the Area Median Income (AMI). 

• Supports projects offering income-based apartments, family units, and senior housing state-wide.   

• Encourages developments near public transit and essential services, such as affordable housing in Everett, WA. 

• Allows funding for both new construction and rehabilitation projects. 

• Emphasizes developments with supportive services for vulnerable populations. 

• Incorporates energy-efficient building designs to reduce environmental impact. 

• Requires properties, like subsidized housing in Seattle, to remain affordable for decades. 

Types of Tax Credits Available in Washington

 

Washington’s LIHTC Program offers two primary types of tax credits to developers:

 

The 9% LIHTC, which is highly competitive, is awarded through an annual process managed by the WSHFC. It provides significant equity, covering up to 70% of project development costs. This credit is ideal for high-impact projects such as low-income housing in Seattle and Vancouver, where housing demand and costs are high.

 

The 4% LIHTC, considered non-competitive, is paired with tax-exempt bonds and typically covers about 40% of project costs. These credits are commonly used for large-scale rehabilitation projects or developments in Spokane Valley and Kent.

 

Both credits can be supplemented with additional funding programs, such as HOME or the National Housing Trust Fund, to maximize the impact of developments like income-based apartments in Spokane or affordable housing in Spokane. 

LIHTC Washington Application Process 

 

The Washington LIHTC application process ensures that resources are allocated to projects with the highest potential impact on housing affordability. This structured process allows developers to bring their proposals forward for competitive review.

 

Pre-Application Phase

 

Developers submit detailed project proposals, including site plans, financial feasibility studies, and tenant targeting strategies. Proposals for underserved areas, such as low-income apartments in Renton, are given priority.

 

Eligibility Review

 

Projects must meet affordability requirements for households earning 60% or less of AMI. Developments, such as income-based apartments in Spokane Valley, must align with Washington’s Qualified Allocation Plan (QAP).

 

Final Allocation

 

Competitive LIHTC allocations are prioritized for 9% LIHTC projects like affordable housing in Vancouver, WA, while 4% credits are processed on a rolling basis. 

Washington LIHTC Program Monitoring and Compliance

 

The WSHFC enforces stringent LIHTC monitoring and compliance measures to ensure the program’s long-term success. These measures ensure that low-income housing in Washington State continues to provide affordable homes to underserved populations.

  

• Affordability Period: Properties must remain affordable for at least 30 years, ensuring stability for residents. 

• Tenant Eligibility Verification: Annual income certifications ensure compliance with guidelines for developments like Section 8 apartments in Seattle, Washington. 

• Regular Property Inspections: Inspections maintain quality standards in projects such as low-income apartments in Seattle, Washington, and Tacoma.  

• Financial Reporting: Developers provide detailed financial reports to verify the proper utilization of tax credits in projects. 

The Impact of the Washington LIHTC Program on Communities

 

The Washington LIHTC Program has a profound impact on communities across the state. It addresses housing shortages, creates jobs, and revitalizes neighborhoods. It has transformed the housing landscape for both urban and rural residents, ensuring access to affordable housing in Washington State.

 

• Affordable Housing Supply: LIHTC has supported the creation of thousands of low-income housing units in Seattle, Spokane, and state-wide.
    
• Economic Growth: Generated construction and property management jobs, boosting local economies in areas like Renton and Tacoma.
   
• Community Revitalization: Revitalized neighborhoods with new developments like affordable housing in Spokane and low-income apartments in Renton.
   
• Diverse Housing Options: Expanded housing choices for seniors, families, and individuals with disabilities, including low-income senior housing in Seattle and other key areas in the state.
   
• Support for Vulnerable Populations: Addressed housing insecurity in underserved regions through initiatives like Section 8 housing in Vancouver, WA. 

Washington Cities and Areas Benefiting from LIHTC

 

The Washington LIHTC Program has improved access to affordable housing in key cities and regions, supporting both urban and rural communities:

 

• Seattle: High-impact projects provide income-based apartments in Seattle to address rising housing costs. 

• Vancouver: Developments like affordable housing in Vancouver, WA, expand options for low-income families in this growing region. 

• Spokane and Spokane Valley: LIHTC developments address regional needs with new income-based apartments in Spokane and Spokane Valley.  

• Renton and Kent: Projects like low-income apartments in Renton and low-income housing in Kent, WA, provide much-needed relief for working families. 

• Everett: Developments in Everett offer affordable housing in Everett, WA, supporting a mix of families, seniors, and local workers.

 

Conclusion

 

The Washington Low-Income Housing Tax Credit Program is a critical resource for addressing housing affordability in the state.

 

From Seattle and Tacoma’s urban centers to the suburbs and rural regions, such as Spokane Valley and Everett, the program ensures access to affordable housing in Washington State with stability, equity, and economic growth.

  

It further emphasizes long-term affordability and community development, creating even stronger, more inclusive communities throughout Washington.