Tax Reform Act of 1986 (October 1986)
Congress created the Low Income Housing Tax Credit as part of a sweeping tax overhaul. The program gives developers a dollar-for-dollar federal tax credit over 10 years in exchange for renting to low-income tenants at restricted rates.
States began allocating credits through their housing finance agencies, with Texas's TDHCA taking that role.
LIHTC became the primary federal mechanism for building affordable rental housing, financing roughly a third of all new affordable units nationwide since 1987.
The credits West Davis Senior Apartments is seeking come from this program. The 4% non-competitive credit structure was added in 1989 for projects that also use tax-exempt bonds.
