As the allocating agency for the Low-Income Housing Tax Credit (LIHTC) program in the state of Connecticut, CHFA is able to provide tax credits to developers who best meet the state’s criteria and goal of providing affordable housing to residents. In exchange for the tax credits and other tax benefits, investors provide equity that is used to acquire, rehabilitate or build new affordable housing.
The amount of tax credits allocated is related to the amount of program-eligible costs incurred and the percentage of affordable units created during the development process.
These LIHTCs are either allocated from the state credit ceiling or, for transactions utilizing tax-exempt bond financing, from a federal allocation pool.
9% LIHTCs
Connecticut's credit ceiling is limited to approximately $10 million annually. Therefore, requests for LIHTCs from the state ceiling for 9% LIHTCs are awarded only through a highly competitive application process based on program set-asides, the point scoring system and the ranking process outlined in the Qualified Allocation Plan (QAP). These competitive funding rounds are usually scheduled annually with specific application deadlines announced by e-mail, press release, and on the CHFA website.
The Connecticut Opportunity Map was made part of the QAP in 2022 and continues to be in use today. Please watch our tutorial video on how to use the map.
This same mapping tool will be used by CHFA in the rating and ranking process for all development proposals to determine the points awards (if any) under the Opportunity Characteristics category.
To receive e-mail notifications of funding round announcements, funding announcements, informational sessions and other program information, go to "Stay in Touch with CHFA".
4% LIHTCs with Tax-Exempt Bond Financing
All 4% LIHTC transactions are required to meet CHFA's Procedures, Policies, and Standards and Guidelines including, but not limited to, the QAP, CHFA’s Multifamily Design and Construction Standards and Construction Guidelines, and CHFA’s underwriting criteria. Requests associated with other competitive resources through the Connecticut Department of Housing (DOH) will be evaluated by CHFA in conjunction with DOH.
Upon satisfactory review of CHFA’s required submissions for 4% LIHTC transactions, CHFA will issue a 42(m) letter confirming a development’s compliance with Section 42 of the IRS Code and its eligibility for non-per-capita LIHTCs. Applications seeking tax-exempt bond volume authorization allocated directly by the state of Connecticut may be subject to CHFA's review and a competitive process for approval. For more information regarding the submission requirements to receive a 42(m) letter, please click here.
How To Apply
Developers may apply for the LIHTCs by submitting a CHFA/DOH Consolidated Application through a SharePoint website. At your request, a SharePoint website will be set up for your application. Click here for more information about the CHFA/DOH Consolidated Application and the SharePoint Set-up Instructions.
CHFA has released a recorded tax credit program overview webinar that provides helpful information for anyone planning to apply or interested in learning more about the program. The webinar may be accessed at any time on YouTube using this link: https://youtu.be/OePEpUKMoQI
LIHTC Compliance Monitoring
CHFA is the allocating and compliance agency for the LIHTC program in the state of Connecticut. For more information on CHFA’s compliance monitoring, please click here.