The Low-Income Housing Tax Credit (LIHTC) is a tax credit program that incentivizes the development of low-income housing throughout the United States. It provides an incentive for private developers and investors to construct or rehabilitate affordable housing for individuals and families with low incomes. Under this program, the federal government provides a ten-year state tax credit to developers and investors who build or rehabilitate affordable housing.

The LIHTC helps to address the shortage of affordable housing in the United States. By providing credits to developers and investors, it helps spur the construction of new housing. It also helps to create more jobs in the construction and rehabilitation fields which, in turn, boosts the economy. Additionally, it creates safe, quality housing for people with low incomes who would otherwise be unable to find such housing.

In order to qualify for the LIHTC, a property must meet the federal government's guidelines for rental rates, tenant income levels and other qualifications. Generally, the rental rate must be below the median income level in the area, and at least 40% of the apartments or homes must be rented to residents with incomes below 60 percent of the area’s median income. All tenants must possess a valid lease or rental agreement, and the property must comply with Fair Housing practices.

When a developer or investor constructs or rehabilitates a project that meets the LIHTC criteria, they can then apply for credits from their state. States usually allocate LIHTC funds according to their population, with the largest states receiving the most money. However, there is usually significantly more eligible properties competing for credits than there are available credits.

Through the LIHTC program, the federal government is helping to create more affordable housing and more job opportunities throughout the United States. It is a beneficial subsidy that has had considerable success in its purpose of providing quality housing for those with low incomes.