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Low-Income Housing Tax Credit

In Montana, this program is now known as the Montana Housing Tax Credit Program. 

The Program

The low income housing tax credit is available under Section 42 of the Internal Revenue Code of 1986. The credit is a federal income tax credit for owners of qualifying rental housing which meets certain low income occupancy and rent limitation requirements.The credit is taken as a reduction in participants tax liability over a 10 year period. The credit can also be sold to investors to act as a financing source.

Family with two kids

Except for certain buildings substantially financed with tax-exempt bonds, an owner must first obtain a credit allocation from the appropriate state agency before claiming the tax credit. The amount of tax credit which may be allocated annually for housing within each state is limited to $2.25 per state resident. The Montana Board of Housing (MBOH) is the state agency which allocates the tax credit for housing located in Montana. The Board will provide fixed rate mortgages for low income rental housing which meet underwriting eligibility and receive approval of HUD mortgage insurance.

Under current legislation, 2014 Housing Tax Credits will not be eligible for the 9% flat rate.

Applications for 2014 Housing Tax Credits should use the current rate.  The Board will make a decision on the percentage that will be used
to award Housing Tax Credits at a later date.

Montana Housing Tax Credits awarded.

3 year average cost as follows:

Cost per unit: $182,855.31

Cost per square foot: $185.98

Credit per square foot: $17.33

Poster - Housing Equals Jobs

Shows the jobs created by a typical Family Tax Credit Development as shown in a National Association of Home Builder's report.