The Low Income Housing Tax Credit Program was designed as an incentive for construction and rehabilitation of housing for low-income households.
Created by the Internal Revenue Code of 1986, the Housing Tax Credit Program offers a reduction in tax liability to owners, subject to restrictions. The annual housing tax credit amount is intended to provide the owner or investor a return which provides a "present value" of either 30% or 70% of the qualified costs of the low-income units in the development. Depending on the project type, the qualified project costs (depreciable costs) will be eligible for either 30% present value (correlating to 4%) or 70% present value (correlating to 9%). The maximum allowable credit amount is determined by multiplying the annual percentage rate (approximately 4% to 9%) by the qualified costs attributed to the designated low-income units in the project. Per the Housing and Economic Recovery Act of 2008, the 9% is set at 9% until the sunset date of December 31, 2013.
Developers of housing tax credit projects typically raise equity capital for their projects by syndicating the tax credits to investors who are willing to invest in the project. The investors' return is the annual tax credit and other economic benefits generated by the project. The U.S. Department of Treasury annually allocates in excess of $2 million to South Dakota. SDHDA, as the credit-issuing agency, is responsible for the administration of the tax credits.
Attention 2013 Housing Tax Credit Applicants
South Dakota Housing Development Authority has $2,783,888 Housing Tax Credits (HTCs) available for the 2013 application round.
The individual project limit is $556,778
The developer limit is $685,972
The non-profit set aside is $278,389
In early January 2013, Congress passed the American Taxpayer Relief Act of 2012. This bill extends the 9% LIHTC floor for LIHTC allocations made before January 1, 2014. Therefore if your project has 2012 or 2013 housing tax credits and you complete a carryover allocation or receive IRS Form(s) 8609 for your project by December 31, 2013, you should retain the 9% tax credit rate.
SDHDA forward allocates housing tax credits. Therefore, the tax credits you are requesting with the 2013 application will be 2014 housing tax credits and are not eligible for the guaranteed 9% rate. SDHDA recommends that you submit your 2013 application using the federally published housing tax credit rate(s). The January 2013 70% PVC rate is 7.36% and 30% PVC rate is 3.16%.
The Section 811 program awards were announced on February 12, 2013. Unfortunately, South Dakota Housing Development Authority did not receive an award. Therefore, there will be no mandate for the Section 811 units in your development and there will be no points awarded for Section 811 units.
- 2013 HTC Reservation List
- 1987-2013 HTC Reservation List Cumulative
- HTC Qualified Allocation Plan (2013-2014)
- HOME Program Allocation Plan
- HOME-HTC Application (Non-fillable PDF)
- HOME-HTC Application
- HOME-HTC Pro Forma
- HTC-Carryover and Final Cost Certification Forms
*You will need Adobe Acrobat to fill out the Application form. In order to save the Application form, you will need to have Adobe Acrobat Professional 7.0
Call or e-mail
, Housing Development Officer, with your Housing Tax Credit questions.
Phone: (605) 773-4532