Section 42

How does section 42 differ from other rent assistance programs like section 8.

Section 42. Section 42 housing is subsidized housing and a part of a federal tax program that allows builders and developers to provide affordable housing. You may also hear the program referred to as either the low income housing tax credit program or the rental housing tax credit program. Investors receive a reduction in their tax liability in return for providing affordable housing to people with fixed or lower incomes.

What is section 42 housing. It particularly benefits low income residents of high rent high income locales like the. Unlike section 8 section 42 is not a government subsidized program but instead is known as a housing tax credit program that benefits builders and real estate developers who agree to devote space in their communities to affordable housing.

Section 42 a provides for a credit for investment in certain low income housing buildings. As a condition for receiving housing tax credits owners must keep the units affordable for a specified number of years. 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.

Developers then receive a federal tax credit from the government. The amount of the low income housing credit for any taxable year in the credit period is an amount equal to the applicable percentage of the qualified basis of each qualified low income building as defined in 42 c 2. Section 42 refers to that section of the tax code that provides tax credits to investors who build affordable housing.

In exchange they receive a federal tax credit. The tax credit encourages developers to build affordable housing to meet the needs of the community. Section 42 the low income housing tax credit is one of the federal government s low cost housing programs.

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. For purposes of section 42 h of such code such building shall be treated as having allocated to it a housing credit dollar amount equal to the dollar amount appearing in the clause of subparagraph b in which such building is described. B project described.