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Frequently Asked Questions

Michigan Low-Income Housing Tax Credit
Frequently Asked Questions

Frequently Asked Questions (FAQs)

Updated October 2026
The following frequently asked questions and answers are for informational purposes only and are not binding. Applicants should refer to the MI LIHTC program statements, notices issued before each funding round or window, and accompanying documents for the most recent guidance.

All applicants are strongly encouraged to consult with MSHDA staff before submitting a formal application for funding.

For additional questions or clarifications on the topics covered in this document, please e-mail MSHDA-MI-LIHTC@michigan.gov. 

 

  • What types of housing developments can receive the credit?

    All projects that otherwise qualify for federal 4% LIHTC are eligible to apply for MI LIHTC funding. Under the Pass-Through program, 50% of MI LIHTC projects must be new construction and 50% must be preservation as defined and required by statute. Under the Direct Lending program, MSHDA intends to fund new construction and preservation projects with MI LIHTC and a combination of other available resources.

  • Does a project have to receive federal LIHTC to be eligible?

    Yes, this is required by statute.

  • When are the first funding rounds and when will the first MI LIHTC awards be made?

    MSHDA will publish an official notice on its website at least 30 days in advance of a funding round or application window. The Direct Lending round will make available $21 million in MI LIHTC and is anticipated to have a due date in early December. The Pass-Through application windows will begin in early January and early July of 2027 and together will include the remaining $21 million in MI LIHTC. MSHDA anticipates that the first MI LIHTC awards will be issued in the 1st quarter and 2nd quarter of 2027 and will continue throughout the rest of the year.

  • How will MSHDA determine which projects receive the credit?

    MSHDA is developing selection criteria for the Direct Lending and Pass-Through programs to determine which projects will receive MI LIHTC funding. An official notice will be published on the MSHDA website 30 days in advance of a funding round or window and will establish the exact selection criteria/process that will be used in that round.

    Please note that Pass-Through applications are selected on a first-come, first-served basis unless enough funding requests are received on the same day to fully exhaust the MI LIHTC available in the application window. In that case, the selection criteria established in the 30-day notice will be used to select projects.

  • Will the program support both new construction and preservation projects?

    Yes. Statutorily, 50% of the Pass-Through MI LIHTC funding must be allocated to new construction and 50% must be allocated to preservation. MSHDA also anticipates funding new construction and preservation projects with MI LIHTC under the Direct Lending program.

  • What is considered a “rural area” for purposes of the program?

    Statutorily, a rural area is defined as a city, village, or township with a population of 35,000 or fewer, or an area designated as rural as defined by the U.S. Department of Agriculture (USDA) or the U.S. Census Bureau.

    Of the amount required by statute (30%), MSHDA will seek to allocate half to projects that meet the USDA Rural Development (RD) Multifamily Housing area definition of rural, a definition used in other MSHDA programs.  This approach is intended to further target investment in smaller, rural communities throughout the state and align MI LIHTC closely with existing MSHDA programs and definitions.

  • Where can developers find more information or apply?

    Application notices will be published 30 days in advance of funding rounds.  The application notice will contain all required information needed to apply for funding.

    Further (FAQs) will be developed as clarity is needed on various topics.

    The MSHDA website is being updated to include a dedicated MI LIHTC webpage and reflect changes to the Direct Lending and the Pass-Through Bond program webpages related to implementation of the MI LIHTC program.

    Questions can be directed to MSHDA-MI-LIHTC@michigan.gov. MSHDA staff will respond by email and are happy to arrange a call or meeting as needed.

  • Are 9% LIHTC projects eligible?

    MSHDA is currently prioritizing the use of MI LIHTC with the federal 4% LIHTC to allow maximize the use of federal resources.  As a result, MSHDA does not anticipate funding many, if any, 9% LIHTC developments with MI LIHTC.

  • How is the amount of credit for an individual project determined?

    The amount of MI LIHTC a project can receive is statutorily defined as being the lesser of:

    • The total amount of MI LIHTC awarded to any project may not exceed the adjusted amount of federal 4% LIHTC that the project qualifies for. For example, if a project qualifies for an annual federal 4% LIHTC equal to $1,000,000 ($10,000,000 over 10 years), the amount of MI LIHTC cannot exceed $1,666,666 ($10,000,000 over six years)
    • The total amount of MI LIHTC a project receives cannot exceed the amount needed for feasibility, as determined by the Authority. Authority staff will perform a gap calculation as part of their analysis to ensure that the project is not receiving more MI LIHTC than necessary to be feasible.

      Please note that applicants may choose to request less MI LIHTC than they are eligible for based on the calculations above to maximize certain credit efficiency points.