Income Limits for LIHTC: The 50% and 60% AMI Rules

The Low-Income Housing Tax Credit program requires that a minimum percentage of units in each LIHTC-financed property be "set aside" for tenants meeting income requirements. There are two main set-aside options, corresponding to 50% and 60% AMI.

The Two Set-Aside Elections

Developers must choose between two minimum set-asides at the time of application:

• 20-50 test: At least 20% of units must be available to households at or below 50% AMI
• 40-60 test: At least 40% of units must be available to households at or below 60% AMI

In practice, most LIHTC projects set aside more than the minimum — often 100% of units — because the entire project must meet income limits to qualify for the credit.

See LIHTC rent limits for specific areas on this site.