LIHTC's Record Low-Income Reach Rests on Rental Assistance

HUD's latest Low-Income Housing Tax Credit tenant data, covering 2023, shows that 57.2% of LIHTC households with reported income earn 30% of area median or less. That is the highest share since HUD began collecting the data in 2015. Median tenant income in the program is $18,600, and nearly one in five households reports income under $10,000. The common read on LIHTC is that it serves the 50 to 60% AMI band and rarely reaches the lowest-income renters. The 2023 tenant data complicates that view.

What the headline number leaves out is how the program actually reaches those incomes. Among households with reported rental-assistance data, 48.3% receive monthly rental assistance. The credit finances and preserves the unit; a voucher or project-based subsidy layered on top is what brings the rent down to what a household at 30% of AMI can pay. LIHTC and rental assistance do different jobs, and the income depth a LIHTC property can serve depends heavily on that second layer.

That distinction matters now because the two layers are moving in opposite directions. OBBBA expanded the credit, so the supply-side layer is growing. The rental-assistance layer that does the affordability work at the bottom of the income scale is the one under appropriations pressure, from voucher shortfalls to the wind-down of pandemic-era emergency vouchers. If the credit expands while rental assistance thins, the units still get built, but the income depth they can reach drifts back toward the 50 to 60% band the data just moved away from. Markets where rental assistance is already thin, which includes many second-tier and Sunbelt metros, would feel that shift first.

The number worth tracking is not the record share itself, but the share of LIHTC units carrying a rental-assistance overlay in the next few data releases. That layer, more than the credit allocation, will decide whether the program keeps reaching extremely low-income renters or drifts back to a higher band.

Source: Novogradac: More than Half of LIHTC Households Earn 30% AMI or Below Per New HUD LIHTC Tenant Data

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