Housing Tax Credits

The Low Income Housing Tax Credit Program awards and allocates federal tax credits to owners of qualified affordable rental housing projects. These Housing Tax Credit (HTC), which offer a 10-year reduction in tax liability, are sold to investors in exchange for capital to build eligible affordable rental housing units in new construction, rehabilitation, or acquisition with rehabilitation.

Minnesota Housing offers two types of HTCs: 9% and 4% with Tax-Exempt Volume-Limited Bonds

The 9% HTCs are allocated twice a year through a competitive process:

During Round 1, also known as the annual Multifamily Consolidated RFP/HTC Round 1, when much of our other funding is also available, and
During Round 2, generally a smaller round allocating the remaining available HTCs for the year.

The 2024 Housing Tax Credit Round 2 is now closed. Visit the Consolidated RFP Round 2 webpage for more information.

4% HTCs with Tax-Exempt Volume-Limited Bonds are available year-round. Minnesota Housing is currently accepting pre-applications and starting Tuesday, January 14, 2025 will begin accepting full applications for an award of 2025 4% HTCs (4% Only) for projects anticipated to be financed with tax-exempt volume limited bonding authority from Minnesota Management and Budget (MMB). Learn more about the 4% Housing Tax Credit (4% Only) program.

Applicants for HTCs must apply using the Multifamily Customer Portal. Resources and relevant documents are listed below and on the Multifamily Consolidated RFP/HTC Funding Rounds webpage. To receive notification of application updates and reminders via email, sign up to receive our eNews publications.

Apply for Housing Tax Credits

Applications of the 2024 Multifamily Consolidated RFP/2025 HTC Round 1 are now closed.

4% HTCs are available year-round. Minnesota Housing is currently accepting pre-applications and full applications for an award of 2024 4% Only HTCs (42M) for projects anticipated to be financed with tax-exempt volume limited bonding authority from Minnesota Management and Budget (MMB). Learn more about the 4% Housing Tax Credit (4% Only) program.

Applicants must apply for HTCs using the Multifamily Customer Portal. Some of the resources and documents are listed for reference below and on the Application Resources webpage.

2025 HTC Documents

The following documents set forth the overall funding priorities for all the HTC funding rounds and the annual Multifamily Consolidated Request for Proposals (RFP).

2024-2025 Qualified Allocation Plan (QAP) (pdf)
2024-2025 Self-Scoring Worksheet (pdf)
Scoring Guide: 2024 Consolidated RFP/2025 HTC (pdf)
Methodology Guide: 2024 Consolidated RFP/2025 HTC
Visit our Community Profiles Webpage for an interactive geographic scoring map.
2025 Estimated HTC Distribution
2025 HTC Declaration of Land Use Restrictive Covenants (LURA)

2024 HTC Documents

2024 Estimated HTC Distribution
Scoring Guide: 2023 Consolidated RFP/2024 HTC
Methodology Guide: 2023 Consolidated RFP/2024 HTC (pdf)
Visit our Community Profiles Webpage for an interactive geographic scoring map
2024 HTC Declaration of Land Use Restrictive Covenants (LURA)

HTC Application Reference Materials

Eventual Tenant Ownership Guide

Eventual Tenant Ownership (ETC) Guide - RTF Fillable version | PDF Fillable version - Allows property owners to convert HTC rental units to homeownership units following an initial 15-year compliance period. For information on ETO, contact a member of the Housing Tax Credit Team at htc.mhfa@state.mn.us.

Market Study

Minnesota Housing is excited to announce a new process improvement to the market study requirements for HTC applications.

What's New

HTC Projects applying for funding for the 2024 Multifamily Consolidated RFP/2025 HTC Rounds 1 and 2, will no longer be required to submit a market study at application.
Market studies are now only required for selected projects and will be collected as a post-selection checklist item.

NOTE: For projects applying through the 4% HTC Only round, the market study will still be required at application/42M.

The Internal Revenue Code Section 42(m)(1)(A)(iii) requires that HTC projects select an authorized market analyst to conduct a comprehensive market study of the housing needs of low-income individuals in the project area before credit allocation.

Market Analyst List

Market Analyst List - revised March 2024

Approved Market Analyst List Updates: Renewals and New Applications

Minnesota Housing is now accepting new applications and renewals from market analysts who wish to be added to the approved Market Analyst List. Authorized market analysts must renew their applications every three years. If your organization is currently on the list, please refer to the renewal date provided.

Due to the change in the market study requirement for the 2024 Multifamily Consolidated RFP/2025 HTC Rounds 1 and 2, Minnesota Housing is extending the market analyst renewal application due date. If your organization is currently on the approved Market Analyst List and was previously due for renewal on March 1, 2024, it will remain on the list until December 15, 2024.

For market analysts who are not currently authorized and want to be considered for authorization to submit market studies in the 2024 Multifamily Consolidated RFP/2025 HTC Funding Rounds, applications will be accepted until October 1, 2024.

Application Materials

2024 Market Analyst Requirements and Application - RTF Fillable version | PDF Fillable version
2024 Market Study Guidelines - RTF Fillable version | PDF Fillable version

Questions?

Contact the Housing Tax Credit Team at htc.mhfa@state.mn.us.

Average Income Test (AIT)

The Consolidated Appropriations Act of 2018 established an Average Income Test (AIT) as a third minimum set-aside election for new Housing Tax Credits (HTC) projects. Under appropriate circumstances, this option can be elected by owners in lieu of the existing minimum set-aside elections of 40% of the units at 60% of Multifamily Tax Subsidy Project (MTSP), and 20% of the units at 50% of MTSP.

Census Data

To determine the census tract or census tract number for a particular address, visit the following:

Minnesota Statutes

Local Housing Tax Credit Suballocators

Tax Credit Allocation Authorities Contact List

Current Applicable Percentage

Council for Affordable and Rural Housing
Affordable Housing Resource Center (Novogradac & Co. LLP.)

Other HTC Information

Archived Procedural Manuals and Documents
Compliance Monitoring - Overview, Dates, Manual, Owner and Tenant Certification Forms
Multifamily Housing Tax Credit eNews - Previous editions of eNews are available upon request. Contact htc.mhfa@state.mn.us.

Changes in Ownership or Proposed Development

Minnesota Housing strongly discourages the transfer of ownership or any material project or building design changes for developments that have been awarded tax credits. Any unapproved transfers or changes could be penalized by the partial or complete loss of tax credits, as well as the assessment of penalty points. If an owner wishes to change or transfer ownership, they should contact Minnesota Housing’s Request for Action (RFA) team for more information. To contact the RFA Team, visit the Minnesota Housing's Request for Action (RFA) webpage.

Qualified Contract

The Internal Revenue Code, Section 42(h)(6)(E)(i)(II) created a provision that housing credit agencies respond to a request for presentation of a qualified contract for HTC projects with expiring compliance periods. The request for presentation of a qualified contract is a request that the housing credit agency find a buyer (who will continue to operate the property as a qualified low-income property) to purchase the property for a qualified contract price pursuant to IRS regulations.

If the housing credit agency is unable to find a qualified buyer within one year of the request, the extended use period for the property as affordable housing terminates. However, during the three years following the termination, existing low-income tenants cannot be evicted or have their tenancy terminated, other than for good cause, and rents cannot exceed the allowable HTC rent limits.