Missouri State Tax Credits for Affordable Rental Housing Development
Yes, Missouri offers several tax credit programs to encourage the development of affordable rental housing. Here are the main programs available:
Missouri Low-Income Housing Tax Credit (LIHTC)
- Matches federal LIHTC at up to 70% of the federal credit amount
- 10-year tax credit period
- Must maintain affordable rents for at least 30 years
- Administered by Missouri Housing Development Commission (MHDC)
Missouri Affordable Housing Assistance Program (AHAP)
- Tax credit worth 55% of contribution value
- Available for both rental housing production and operating assistance
- Annual program cap of $10 million
- Must partner with nonprofit organizations
Historic Preservation Tax Credit
- 25% tax credit for rehabilitation costs
- Can be combined with federal historic tax credits
- Useful for converting historic buildings to affordable housing
- $90 million annual program cap
Frequently Asked Questions
Q: Who can apply for these tax credits?
A: Developers, property owners, and investors who create or preserve affordable rental housing in Missouri.
Q: What is considered “affordable” rent?
A: Generally, rents must be affordable to households earning 60% or less of the area median income.
Q: How competitive are these programs?
A: Very competitive – typically 3-4 applications for every project funded.
Q: Can credits be transferred or sold?
A: Yes, most Missouri housing tax credits can be transferred or sold to other taxpayers.
Q: Is there a minimum project size?
A: Most programs require at least 12 units, though some rural projects may be smaller.
Q: How long does the application process take?
A: The process typically takes 6-12 months from application to award.
Q: Can these credits be combined with other incentives?
A: Yes, they can often be combined with federal tax credits and other local incentives.
The Bottom Line
Missouri offers significant tax credit opportunities for affordable housing development, though programs are competitive and require careful planning. Success typically requires experience with tax credit development or partnering with experienced developers. The combination of state and federal credits can make affordable housing development financially feasible while serving an important community need.