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Low-Income Housing Tax Credit Apartments: How to Qualify

By KPCB StaffCombined Expertise In The Low Income Housing Space For 10 Years · How we write our guides

low income housing

Low-Income Housing Tax Credit (LIHTC) apartments are privately owned rentals where some or all units have capped rents and are set aside for households under an income limit. You apply directly at the property, and to qualify, your household income usually has to be at or below 50% or 60% of the area median income, depending on how the property was set up.

The government gives the tax credit to the owner, not to you, so there is no LIHTC check or voucher. What you get is a unit with a rent ceiling. If you already have a Section 8 voucher, LIHTC owners agree not to turn you away because you have one.

What a LIHTC apartment is

The tax credit was created by the Tax Reform Act of 1986. State housing agencies award the credits to developers who build or rehab rental housing, and in return the owner signs an agreement to keep units affordable for a long time. HUD's database lists 55,345 LIHTC properties with 3.9 million units placed in service from 1987 through 2024.

From the outside, a tax credit building looks like any other apartment complex. Because owners only have to set aside a share of the units, some buildings mix capped-rent units with market-rate units.

Federal law gives the owner three ways to set up the property:

Setup the owner picksWhat it means for renters
20-50 testAt least 20% of units are for households at or below 50% of area median income
40-60 testAt least 40% of units are for households at or below 60% of area median income
Average income testAt least 40% of units are set aside, each at a limit from 20% to 80% of area median income, and the limits must average 60% or less

Because of the average income option, one building can have a 30% unit next to an 80% unit. Ask the leasing office which income level applies to the unit you want.

Income limits for LIHTC apartments

HUD publishes the limits LIHTC properties use, called Multifamily Tax Subsidy Project (MTSP) income limits. They change by county or metro area and by household size, so there is no single national number. The FY 2026 limits took effect May 1, 2026.

As an example, for the Phoenix-Mesa-Chandler, AZ metro area, which includes Maricopa County, HUD lists a FY 2026 median family income of $112,400. The MTSP limits are:

Household size50% limit60% limit
1 person$39,350$47,220
2 people$45,000$54,000
3 people$50,600$60,720
4 people$56,200$67,440
5 people$60,700$72,840
6 people$65,200$78,240

These figures apply only to Maricopa County. To find yours:

  1. Open HUD's FY 2026 MTSP income limits documentation system.
  2. Choose County, then pick your state and county.
  3. Read the 50% and 60% rows for your household size.

HUD also posts the full list as a spreadsheet on its MTSP income limits page. These can differ from HUD's regular Section 8 income limits, so use the MTSP table for tax credit apartments.

Income is counted for everyone who will live in the unit. The tax credit rules say tenant income is figured the same way as for Section 8. Our guide to Section 8 income eligibility explains what counts as income.

The property's management decides whether you qualify, following the rules set by the state agency that oversees the building.

How rent works

LIHTC rent is capped by unit size and the area's income limit. The cap is 30% of the income limit for a "standard" household size for that unit, using 1 person for a studio and 1.5 people per bedroom. The cap is on gross rent, which includes a utility allowance for any utilities you pay yourself. So if you pay your own electric bill, the rent you pay the landlord has to be lower than the cap.

For the Maricopa County example, HUD's formula works out to these FY 2026 maximum gross rents:

Unit size50% unit60% unit
Studioabout $983about $1,180
1 bedroomabout $1,054about $1,265
2 bedroomsabout $1,265about $1,518
3 bedroomsabout $1,461about $1,753

These are ceilings, and a property can charge less. HUD notes that owners are not required to raise rents when income limits go up. HUD also says the official maximum rents come from the state housing agency that oversees each property, so check with them or the leasing office for the exact number.

Because the rent is fixed by unit size, it can be more than 30% of your own income if you earn well below the limit. That is the main difference from Section 8 and public housing, where your rent share is based on what you actually earn. If your income is very low, a voucher or public housing may cost you less each month.

Using a Section 8 voucher at a LIHTC property

Every LIHTC owner signs a long-term agreement with the state housing agency. Federal law requires that agreement to prohibit refusing to rent to someone because they hold a Section 8 voucher. You still have to meet the property's income limit and its other rules for applicants.

With a voucher, the housing authority's payment is not counted toward the LIHTC rent cap. Your share of the rent is set under the voucher program's rules, and your housing authority must approve the unit like any other rental. If you are still waiting on a voucher, see the steps to Section 8.

If you believe a LIHTC property turned you down because you have a voucher, contact the state housing agency that oversees the property. You can also report housing discrimination to HUD.

How to find LIHTC apartments near you

Finding a property is free, and so is checking the income limits.

  1. Search HUD's LIHTC database. HUD says renters can use it to find rental housing with tax credit rent and income limits. Pick your state, narrow it to your city or county, and you get each property's address and number of units. The database covers properties placed in service through 2024. Newer buildings will not show up yet.
  2. Check your state's housing finance agency. HUD keeps a list of every state LIHTC agency with links. Your state agency's website may list tax credit properties or explain how to find them. In Arizona, for example, the agency is the Arizona Department of Housing.
  3. Try HUD's affordable housing map. On HUD's Helping Americans page, the "I need an Apartment that accepts Housing Choice Vouchers" section links to a map of affordable apartments. HUD says the map shows locations and contact details only. It does not show vacancies or waitlists.
  4. Call the leasing offices. Ask whether they have tax credit units, which income levels they serve, what the rent is for your unit size, and whether they keep a waitlist.

A free HUD-approved housing counselor can also help you search. HUD's LIHTC site lists 1-888-995-4673 for finding one, or you can search for a counselor online.

Applying at the property

Each LIHTC property takes its own applications. There is no single government application.

Expect the property to check your household's income before you move in. Federal rules give examples of the proof owners keep, such as your federal tax return, W-2 forms, or income verification from your employer or the state unemployment office. Have these ready for everyone in your household:

  • photo ID
  • pay stubs, benefit letters (Social Security, SSI, unemployment), and recent tax returns
  • bank statements and records of any other assets
  • names and birth dates of everyone who will live with you

Owners generally must get a new income certification from each low-income household every year. Buildings where every unit is a tax credit unit can be exempt from this. Ask the property what it requires.

If a property asks for an application fee, ask what it covers and get a receipt. Be wary of anyone who wants money to "guarantee" you a spot. HUD's Office of Inspector General warns about fake waitlists posted on social media, and says public housing agencies and government agencies "will never ask you to pay for admission to housing assistance programs or to join a waitlist." You can report a scam to the HUD OIG hotline at 1-800-347-3735.

What happens after you apply

The property reviews your application and checks your income. If you qualify and a unit is open, you are offered the unit and sign a lease. If not, you may be placed on the property's waitlist. Waitlist length varies, so ask how long it usually takes and how you will be contacted.

A few habits help:

  • Apply at several properties at once. Each one keeps its own list.
  • Keep your phone number and address current with every property you applied to.
  • Save copies of everything you submit and write down who you talked to.

Frequently asked questions

Is LIHTC the same as Section 8?

No. Section 8 is a voucher that goes with you and pays part of your rent based on your income. LIHTC is a tax credit for the building owner that caps the rent on certain units. You can use a Section 8 voucher in a LIHTC unit. Our affordable housing Q&A compares more programs.

What if my income goes up after I move in?

Tax credit rules let a unit keep counting as affordable when a household's income rises after move-in, as long as the household qualified at the start. If your income goes above 140% of the limit, the owner may have to rent the next comparable unit that opens to a qualifying household. Ask your property how it handles income increases at your yearly recertification.

Can full-time students live in a LIHTC apartment?

Households made up entirely of full-time students face extra rules. The law lists cases where they can still qualify, including single parents and their children (if no one else claims them as dependents, apart from the parent claiming the children), married students who file a joint tax return, and students who were in foster care. A student who receives assistance under Title IV of the Social Security Act, or who is in a government-funded job training program, also does not disqualify the unit. Ask the leasing office before you apply.

How long does a building stay affordable?

The owner's agreement covers at least a 15-year compliance period plus an extended use period that runs at least 15 more years. If that period ends early, for example through foreclosure, the law still protects existing tenants for three years from eviction without good cause and from rent increases beyond the tax credit limits.

Can I be denied even if I meet the income limit?

Yes. Income is only one requirement, and the property can also apply its own written rules for applicants. If you think you were denied unfairly, ask for the reason in writing. You can contact the state agency that oversees the property, or get free help through LawHelp.org. Our guide to tenant rights covers more.

How do I know if I qualify for other help?

Use the KPCB Edge benefit finder to see which housing and income programs may fit your situation. Only the agency or property running each program can decide if you qualify.

Sources

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