Number: RS22917
Title: The Low-Income Housing Tax Credit Program: The Fixed Subsidy and Variable Rate
Authors: Mark Patrick Keightley, Government and Finance Division 
Abstract: The Housing and Economic Recovery Act of 2008, P.L. 110-289, temporarily changed the credit rate formula used for new construction. The act effectively places a floor equal to 9% on the new construction tax credit rate. The tax credit rate that is applied to rehabilitation construction remains unaltered by the act. This report explains the original method for determining the LIHTC rate, the relationship between interest rates and the LIHTC rate, and the temporary 9% tax credit rate floor instituted by P.L. 110- 289. Historical data on the new construction credit rate is analyzed in order to gain insight into the potential effect of the temporary 9% floor.
Pages: 6
Date: September 16, 2008