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Freddie Mac White Paper Says Former LIHTC Properties Tend to Offer Rents Below Market Rate

Monday, July 11, 2022 - 11:30AM

A white paper from Freddie Mac Multifamily reports that multifamily properties that exit the low-income housing tax credit (LIHTC) incentive generally continue to provide housing at rents lower than those charged in the broader market, thereby serving as a valuable source of workforce housing. The report, Low-Income Housing Tax Credit (LIHTC) at Risk, examines factors correlated with properties leaving the LIHTC program and what happens to the units once they are no longer subject to LIHTC affordability restrictions. The report concludes that LIHTC properties that depart the program often remain more affordable than conventional market-rate multifamily properties that were never subsidized. Freddie Mac found that while there are generally rent increases made at the former LIHTC properties, those increases are generally modest and the properties remain affordable to tenants earning below the area median income.

The Novogradac Low-Income Housing Tax Credit Handbook’s new 2022 edition is an essential resource for affordable rental housing owners, developers, managers and investors, as well as the professionals who counsel them.

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