Section 42 Housing

The section 42 housing program makes rental units more affordable.

Section 42 housing. Section 42 the low income housing tax credit is one of the federal government s low cost housing programs. Investors receive a reduction in their tax liability in return for providing affordable housing to people with fixed or lower incomes. Affordable rents are defined and calculated based on median household income figures published annually by the u s.

How does section 42 differ from other rent assistance programs like section 8. The irc 42 low income housing credit program was enacted by congress as part of the tax reform act of 1986 to encourage new construction and rehabilitation of existing buildings as low income rental housing for households with income at or below specified income levels. Section 42 refers to that section of the tax code that provides tax credits to investors who build affordable housing.

In order to receive the credit the developers agree to maintain properties in a safe and decent condition plus maintain income and rent restrictions while they are receiving the credit. When investors build affordable housing section 42 offers them reduced tax liability. Department of housing and urban development hud.

Developers then receive a federal tax credit from the government. Section 42 is an affordable rental housing program. It particularly benefits low income residents of high rent high income locales like the.

Section 42 is also known as the low income housing tax credit and is also an income based housing program but it works differently than section 8. Springfield metropolitan housing authority is a public housing agency that participates in the section 8 housing choice voucher hcv and public housing programs. You may also hear the program referred to as either the low income housing tax credit program or the rental housing tax credit program.

What is section 42 housing. On the other hand the section 42 housing program is a tax credit offered by the internal revenue tax code aimed at investors to encourage the construction of affordable housing for people with low or fixed incomes. Here s what else you need to know about the program.