Affordable housing opens doors to vibrant, inclusive communities, offering individuals and families safe, quality homes as well as more opportunities. To help incentivize the development and rehabilitation of affordable rental housing, the Virginia Low-Income Housing Tax Credit (LIHTC) program, administered by Virginia Housing, was established in 1990. By making quality housing accessible to low- and moderate-income individuals and families, the LIHTC program not only meets local needs but also drives economic growth across the state.
Navigating the Virginia LIHTC program’s application and compliance requirements can be a complex process, but Timmons Group offers the expertise and comprehensive support developers need to bring affordable housing projects to life. Our team is dedicated to assisting clients at every stage, from initial planning to final permitting, ensuring that projects meet both state and federal standards.
What is the Virginia LIHTC Program?
The Virginia LIHTC program provides state tax credits to private developers and investors, helping to offset the costs of building or rehabilitating affordable rental properties. Sponsored by the U.S. Treasury Department, the program is designed to attract private investment by offering tax relief for those committed to creating affordable units that meet strict guidelines. These credits help bridge funding gaps, making it possible to construct, preserve, and maintain housing that might otherwise be economically unfeasible.
How Does the Virginia LIHTC Work?
According to Virginia Housing, The program awards a dollar-for-dollar tax credit based on the proportion of units reserved for low-income residents within a project. In Virginia, developers can earn credits depending on the project’s scope, size, and the demand for affordable housing in the area. In return, recipients must commit to maintaining affordable rental rates over a long-term period, usually 15 to 30 years, ensuring sustained access to housing for future generations.
The Virginia LIHTC program offers two main types of tax credits: 4% and 9% credits.
- 9% credits are awarded through a competitive process and typically cover up to 70% of eligible development costs, making them well-suited for new construction or major rehabilitation projects. Applications are accepted once a year, generally in mid-March, with preliminary rankings announced in May.
- 4% credits, in contrast, are available on a rolling, non-competitive basis for projects funded with tax-exempt bonds, covering about 30% of eligible costs. These credits are often used to preserve and moderately rehabilitate existing affordable housing, helping to ensure long-term affordability.
Eligible developments must meet two essential criteria:
- Income Restriction: A specific percentage of units must be rented to households earning below a set percentage of the area’s median income (AMI), typically 60% or lower.
- Rent Restriction: Rents for these units must be affordable, ensuring tenants do not spend more than 30% of their monthly income on housing.
How Timmons Group Can Support Your Next Project
At Timmons Group, we provide end-to-end support throughout the LIHTC application process, helping clients navigate site surveys, environmental studies, and more. In addition to site preparation, we collaborate with architects to ensure designs meet LIHTC standards, from parking requirements and accessibility to public transportation access. Our team also provides technical reports, including zoning certifications and geotechnical engineering studies, which are critical for LIHTC applications.
Our affordable housing portfolio spans a diverse range of projects, from new developments to rehabilitations. Recent examples include Winchester Forest apartments in Chesterfield, which added about 160 units to the area; the Planet Apartments, a new construction in Richmond; and Creighton Court Redevelopment, a rehabilitation that will transform 504 existing public housing units into an affordable housing community of up to 700 units.
Beyond individual projects, Timmons Group maintains longstanding partnerships with nonprofit organizations such as Better Housing Coalition (BHC) and Commonwealth Catholic Charities, enabling us to bring sustainable, affordable housing to underserved communities throughout Virginia.
By staying ahead of regulatory changes and offering comprehensive guidance, Timmons Group empowers developers to bring much-needed affordable housing to communities across Virginia. Whether developing a new community or renovating an existing one, our goal is to help clients bring their vision to life while meeting all necessary affordable housing guidelines.
For more information on our services and how we can support your affordable housing project, email us at info@timmons.com.
