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Michigan Low-Income Housing Tax Credit

Michigan Low-Income Housing Tax Credit

Michigan Low-Income Housing Tax Credit

The Michigan Low-Income Housing Tax Credit (MI LIHTC) is a state tax credit designed to work alongside the federal 4% Low-Income Housing Tax Credit (LIHTC) to support the development and preservation of affordable rental housing in Michigan.

In June 2026, the Michigan Legislature passed three bills establishing the program, allowing the Michigan State Housing Development Authority (MSHDA) to allocate state tax credits to eligible housing developments that receive federal LIHTC awards from MSHDA.

The program is authorized to award $42 million in state tax credits annually, with the amount adjusted each year for inflation. The credits are available over a six-year period and are intended to help finance both new housing and the preservation of existing affordable homes.

Questions? Email us

MSHDA-MI-LIHTC@michigan.gov

How the credits will be allocated

MSHDA plans to allocate MI LIHTC through two existing financing programs: the Pass-Through Bond Program and the Direct Lending Program.

  • Pass-Through Bond Program: Half of the MI LIHTC funding will be used through this program, with equal portions designated for new construction and the preservation of existing housing.
  • Direct Lending Program: MSHDA intends to use the remaining half of the funding to help fill financing gaps in housing developments.

The legislation also requires that at least 30% of total MI LIHTC funding support projects in rural areas, as defined by state law, provided MSHDA receives enough completed applications to meet this requirement. MSHDA also plans to direct half of that rural allocation toward smaller communities that meet the U.S. Department of Agriculture Rural Development definition for multifamily housing, consistent with the approach used in other MSHDA programs.

 

Program guidance and applications

In October 2026, the MSHDA Board approved program statements outlining how MI LIHTC will be allocated through the Pass-Through Bond and Direct Lending programs.

MSHDA will continue to release program guidance, funding announcements and other resources through the end of 2026 and into 2027.

This page serves as a central resource for developers, sponsors and other partners interested in MI LIHTC. It will be updated as additional information becomes available and will include approved program statements, webinar presentations, frequently asked questions and other program resources.

MI LIHTC applications will be managed through MSHDA’s existing Pass-Through Bond and Direct Lending programs, rather than through a separate application process. Visit the respective program pages for application information and requirements as they are updated to include MI LIHTC.

All questions can be directed to MSHDA-MI-LIHTC@michigan.gov which is monitored regularly.

Fall 2026

MSHDA finalizes program design and prepares the program statement

October 2026

Program statement will be presented to the MSHDA Board for review and possible approval

December 2026

MSHDA plans to accept applications for Direct Lending Program in NOFA 21

TARGET:
12/4/2026 (Tentative)

Will award $21 million MI LIHTC as Gap

Q1 2027

1st Pass-Through application window

TARGET:
1/4/2027 (Tentative)

Must award 45% of Pass-Through Funds

Q3 2027

2nd Pass-Through application window

TARGET:
Mid-July
Must award 45% of Pass-Through Funds

  • MI LIHTC Webinar Slides