Affordable housing finance
9% credit
The competitive LIHTC track: ~70% of qualified basis in present value, allocated from the state's per-capita credit ceiling through scored CTCAC rounds.
Definition
The 9% credit is the deep-subsidy LIHTC track under IRC § 42: annual credits at the applicable percentage — floored by statute at 9% — for ten years, worth roughly 70% of qualified basis in present value. It is allocated competitively from each state's per-capita ceiling; in California that means scored rounds under the CTCAC regulations, with set-asides for nonprofit, rural, special-needs, at-risk and small developments. No bonds are required — the award itself is the scarce resource. Pub. L. 119-21 (2025) permanently increased the ceiling about 12%.
Why it matters in an underwrite
Per dollar of basis, the 9% credit generates more than twice the equity of the 4% credit, which is why demand chronically outruns the ceiling and rounds are decided on points and tiebreakers. Underwrite the scoring before the site: an application that cannot max the competitive categories is a donation of pursuit costs, and a losing round costs a full cycle of carry. Small-development set-asides are the realistic lane for sub-40-unit sponsors.
Sources & related guides
See also
See the term in the law itself
Read the controlling text in the Code Library, or ask the AI how it applies to your project.
Last reviewed 2026-07-29. General information, not legal advice.