Research Question: An Analysis of The LIHTC with the Focus of Indiana Housing & Community Development (IHCDA): How Does LIHTC Implemented to Provide Affordable Rental Housing for Low-Income Households?

Outline

1. Introduction
   1. Purpose of the research (To find out how the LIHTC program is implemented with the focus on IHCDA in Indiana)
   2. Thesis statement ( There are many elements to consider in the implementation of LIHTC program that is useful in understanding the eligibility of households that qualify for a unit and the eligibility of homeowners to get credit allocation for construction of housing units.)
2. What is affordable housing program?

The affordable housing program is an initiative under the LIHTC Program to provide incentives to the private sector to construct new houses or renovate existing ones for low-income families

• The history and progress of implementation of the LIHTC program

1. The Fair Housing Act (HFA) was weak and contributing to discrimination and continued housing segregation (Callison, 2010). The LIHTC program, therefore, was as an efficient tool to improve residential integration.
2. The financial crisis of 2007 and 2008 compromised the ability of corporate investors to provide LIHTC programs.
3. There was however measures put in place to respond to the crisis as the government implemented two programs to address the challenges of LIHTC. The Tax Credit Assistance Program and Tax Credit Exchange Programs were to fill the funding gaps for the projects.
4. The implementation of the LIHTC was in 1986. Since then, there have been approximately 1.5 million units for individuals with low-income (Desai, Dharmapala &Singhal, 2008).
5. A statement on the reason for the implementation of the policy
   1. A critical federal housing program
   2. Type of tax expenditure program
6. A statement on primary characteristics
   1. Supply-side program
   2. Supply-side remedy through the tax code (Desai, Dharmapala, & Singhal, 2008).
   3. The beneficiary of the tax credit need not be the service provider.
7. LIHTCs in the state of Indiana
8. Introduction to the Indiana Housing and Community Development Authority (IHCDA).
9. IHCDA responsibilities

• conducting a compliance audit
• Inspections and annual review of all the property programs and the state of the change in ownership of the property under the LIHTC program after 15 years (Khadduri et al., 2012).
• IHCDA limitations
• doesn’t own any property
• it doesn’t manage any property
• it doesn’t take any application

1. Eligibility process to Acquire a Property in Indiana
2. A household needs to fulfill two key factors to obtain property under the LIHTC program
3. income eligibility

• Program units are designated for income levels.
• 30%, 40%, 50% and 60%.
• A household at 30% area median income can qualify for a house at 60%.
• Both earned, and unearned incomes are considered from the entire household member.

1. Student eligibility

• Household, where all members are full-time students, are ineligible for LIHTC units.
• An allowable exception can be documented to consider eligibility for all full-time students.
• House owner’s eligibility for credit allocation
• They have to render 20% of their residential houses to 50% of individuals with less than the median income (Muralidhara, 2006).
• The property owner who qualifies thus gets a 30% or 70% of the cost they used depending on the nature of the project.
• Must go through the allocation process beginning from the federal level to states and finally to developers and investors.

1. Rent
2. Different units have rents restricted at different levels
3. For tenants paying for their utility, a utility allowance is given.
4. Conclusion
5. Restating the thesis (There are many elements to consider in the implementation of LIHTC program that is useful in understanding the eligibility of households that qualify for a unit and the qualification of homeowners to get credit allocation for construction of housing units
6. Review of the eligibility process of the household, students, and homeowners.
7. Eligibility for a LIHTC unit and credit allocation in Indiana depends on income eligibility, student eligibility and the number of units allocated for LIHTC program by property owners.

References

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Green, R. K., Malpezzi, S., & Seah, K. Y. (2002). Low-income housing tax credit housing developments and property values. Madison, WI: Center for Urban Land Economics Research, the University of Wisconsin.

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