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The federal low-income housing tax credit program (“LIHTC” or “Tax
Credits”) program was established by the Tax Reform Act of 1986 and
was codified as in Section 42 of the Internal Revenue Code of 1986,
as amended (“IRC Section 42”). The Revenue Reconciliation Act of
1989 amended IRC Section 42 by adding Section 42(m), which requires
allocating agencies to allocate low income housing tax credits
pursuant to a Qualified Allocation Plan (“QAP,” Plan,” or
“Allocation Plan”). The Oklahoma Housing Finance Agency (OHFA) is
the housing credit agency responsible for allocating Tax Credits to
Owners of qualifying residential rental projects (“Projects”).
IRC Section 42(m)(1) provides as
follows:
QUALIFIED ALLOCATION PLAN-- the term
'qualified allocation plan' means any plan
which sets forth selection criteria to be used to
determine housing priorities of the housing credit agency which are
appropriate to local conditions,
which also gives preference in allocating housing credit
dollar amounts among selected projects to
projects serving the lowest
income tenants, and
projects obligated to serve
qualified tenants for the longest periods, and
which provides a procedure that the agency (or an agent
or other private contractor of such agency) will follow in
monitoring for noncompliance with the provisions of this section and
in notifying the Internal Revenue Service of noncompliance with the
provisions of this section which such agency becomes aware of.
CERTAIN SELECTION CRITERIA MUST BE
USED--The selection criteria set forth in a qualified allocation
plan must include:
project location,
housing needs
characteristics,
project characteristics
including whether the project includes the use of existing housing
as part of a community revitalization plan,
sponsor characteristics,
tenant populations with
special housing needs,
public housing waiting lists,
tenant populations for
individuals with children, and
projects intended for
eventual tenant homeownership.
APPLICATION TO BOND FINANCED
PROJECTS--IRC Section 42, Subsection (h)(4) shall not apply to any
project unless the project satisfies the requirements for allocation
of a housing credit dollar amount under the qualified allocation
plan applicable to the area in which the project is located.
There are two methods for obtaining a
Tax Credit Allocation:
through an application submitted pursuant
to the QAP or
tax exempt bond financing.
Oklahoma Housing Finance Agency utilizes:
Rules: TITLE 330. OKLAHOMA HOUSING FINANCE AGENCY
CHAPTER 36. AFFORDABLE HOUSING TAX CREDIT PROGRAM and
APPLICATION PACKET as its Qualified Allocation Plan.
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Housing
Development Team