The Oregon Affordable Housing Tax Credit (OAHTC) is a state income tax credit that produces lower rents for low income renters in affordable housing projects. The OAHTC allows banks to reduce interest rates on loans for affordable housing by 4% and claim a state income tax credit equal to the lost interest income caused by the lower rate.
Nearly all households that benefit from this program earn less than 50% of Area Median Income (AMI), and in many cases, below 30% AMI.
The OAHTC rent savings allow households to be financially stable and not be forced to choose between housing and food, medicine or heat.
Without the program, many projects could not be built. Especially in rural communities where incomes are low, decent housing is unaffordable without this program. The local value from the economic development aspect of affordable housing development must be emphasized, especially with Oregon’s struggling economy.
Eligibility Requirements
Property owners must agree to pass 100% of interest savings to low income tenants in the form of permanent rent reductions. Low-income households are those making less than 80% AMI as defined by HUD. The sponsors must show intent to use the tax credit project for a long-term affordable housing use. OHCS requires Restrictive Covenants to guarantee long term affordability. Certain preservation projects and all manufactured housing parks are exempt from passing through cost savings.
Financial institution holding OAHTC loans are annually required to submit loan status reports along with a five percent charge of the tax credits used. The charge may get passed on to the sponsor.
Entities considered "qualified borrowers”, or "sponsors" are for-profit or nonprofit corporations, state, or local government entities (including but not limited to housing authorities) or a controlling partner in a limited partnership that enters into Restrictive Covenants regarding the rents on a property and eligibility of occupants.