Ohio State Tax Credits for Affordable Rental Housing Development
Yes, Ohio offers several tax credit programs to encourage affordable rental housing development, with the primary one being the Ohio Housing Tax Credit (OHTC) program, administered by the Ohio Housing Finance Agency (OHFA).
Key Programs Available:
- Low Income Housing Tax Credit (LIHTC)
Provides up to 9% tax credits annually for 10 years on qualified development costs - Ohio Housing Trust Fund
Offers gap financing and grants for affordable housing development - Housing Development Assistance Program (HDAP)
Provides flexible financing for affordable housing development - Historic Preservation Tax Credit
Up to 25% of qualified rehabilitation expenses for historic properties
Eligibility Requirements:
- Projects must maintain affordable rents for at least 30 years
- Must reserve units for households at or below 60% of area median income
- Must meet OHFA’s design and construction standards
- Must demonstrate financial feasibility
Frequently Asked Questions:
Q: What is the maximum tax credit amount available?
A: Up to 9% of qualified development costs annually for 10 years through LIHTC.
Q: How long must properties remain affordable?
A: Minimum 30-year compliance period required.
Q: Can credits be combined with other programs?
A: Yes, developers can stack multiple funding sources and credits.
Q: When are applications accepted?
A: OHFA typically has two funding rounds annually – spring and fall.
Q: What areas qualify for credits?
A: Both urban and rural areas qualify, with some areas receiving preference.
Q: Is there a minimum project size?
A: Projects typically need at least 30 units to be financially feasible.
Q: How competitive is the program?
A: Very competitive – typically only 20-30% of applications receive funding.
The Bottom Line:
Ohio offers substantial tax credits and incentives for affordable housing development, but the application process is competitive and complex. Success requires careful planning, strong market research, and often professional assistance with applications. However, for developers willing to navigate the process, these programs can significantly improve project feasibility while helping address Ohio’s affordable housing needs.