The Department provides a variety of funding sources to eligible non-profit and for-profit housing developers to assist with the development of affordable rental properties. Programs available are:
Low-Income Housing Tax Credit Program
The Low Income Housing Tax Credit (LIHTC) was created to promote the development of affordable rental housing for low income individuals and families. To date, it has been the most successful rental housing production program in Arizona, creating thousands of residences with very affordable rents. Visit Low Income Housing Tax Credit (LIHTC) Program for more information.
Private Activity Bonds and 501(c)(3) Bonds
Private Activity Bonds are for the development of rental housing in Arizona. The Arizona Department of Commerce is responsible for allocating the State ceiling for Private Activity Bonds. In the urban counties of the State (Maricopa and Pima Counties), bonds must be issued by one of the local urban Industrial Development Authorities (IDA). In rural counties, the State may issue bonds through the Arizona Housing Finance Authority (AzHFA) or by any of the local rural IDAs. IRC Section 42(h)(4) allows low-income housing projects financed with tax-exempt bonds to be eligible for 4% tax credits if they meet the minimum requirements and adhere to regulations set forth in the Qualified Allocation Plan (QAP). Applicants should consult their legal advisors to determine a project's eligibility. All applications submitted will be reviewed by ADOH and a bond hearing will be scheduled in accordance with A.R.S. 35-726(E).
501(c)(3) bonds are private activity bonds issued to finance a facility owned and utilized by a 501(c)(3) organization. These bonds are not eligible for low-income tax credits. For a list of applications received, visit the program's Forms page.
State Housing Fund Program
ADOH combines Federal HOME resources from the U.S. Department of Housing and Urban Development (HUD) with state resources from the State Housing Trust Fund (HTF) into a single housing program called the State Housing Fund (SHF). These funds are made available for the development of affordable permanent and transitional rental housing units. Applications are accepted according to the schedule outlined in the Notice of Funding Availability (NOFA). Competitive funding criteria are utilized to make funding decisions. All financing is provided in the form of a loan; in return the properties must comply with long-term restrictions on rents charged and tenant incomes. Visit State Housing Fund (SHF) Rental Development Programs for more information.
