What Is a Tax Credit Apartment?
Tax credit apartments are communities that take part in the federal Low-Income Housing Tax Credit (LIHTC) program, created under Section 42 of the Internal Revenue Code. In Texas, the Texas Department of Housing and Community Affairs (TDHCA) awards the credits and monitors participating properties. In exchange for the tax credits, owners agree to keep certain units, called set-aside units, affordable for a long period.
Those designated units come with two kinds of limits. There’s a maximum household income, set as a percentage of Area Median Income (AMI), which TDHCA often calls Median Family Income (MFI). Common tiers are 50% and 60% of AMI. Some properties use income averaging (the Average Income Test), which lets units range across several tiers as long as the property’s average stays within the rules. There’s also a maximum allowable rent for each unit size.
Here’s the part that confuses many renters. A restricted rent is not the same as income-based rent. Under LIHTC, the rent cap comes from the area’s income limits and the unit size, not from your paycheck. Unless you also have a Housing Choice Voucher or other rental assistance, you generally pay the property’s set rent for that unit, even if your income is well below the limit.
| Question | Tax credit (LIHTC) unit | Market-rate unit |
|---|---|---|
| Is there a maximum household income? | Yes, set by AMI tier and household size | No program income limit |
| How is rent set? | Capped by program tier and unit size, not by your paycheck | Set by the property |
| Do you need a voucher? | No | No |
| Can there be a minimum-income rule? | Yes, set by the property’s screening | Yes, set by the property’s screening |
| Is income reviewed after move-in? | Usually, through annual recertification | No program recertification |
Tell us your household size, approximate gross income, budget, bedrooms, and preferred areas. We research tax credit communities that may fit, record the program type, published income limits, known minimum-income criteria, and availability or waiting-list information with source dates. We also flag what you should confirm with leasing staff before paying an application fee. Each community confirms its own eligibility and makes its own approval decisions.
Who Might a Tax Credit Apartment Fit?
Tax credit communities can work well for households with steady income that falls below the area’s limit for their household size. They don’t require a voucher. They’re open to working families, single renters, seniors, and people moving between Texas cities, as long as the household meets the property’s program rules and screening criteria.
They can be harder to use in a few situations. If your income is very low, a property’s minimum-income screening might still apply. If everyone in your household is a full-time student, the full-time student rule may limit eligibility unless an exception applies. And if your income is above the limit for your household size, designated units won’t be available to you, though a market-rate unit at the same property might be.
Common situations we help with
“I keep hearing about LIHTC but don’t know where to start.” We find tax credit communities in the areas you choose and explain each one’s program type in plain language, so you aren’t guessing from a property name.
“I’m not sure if I make too much or too little.” We compare what you share with published HUD income limits and the Multifamily Tax Subsidy Projects (MTSP) limits that apply to tax credit properties, and with any minimum-income rule the property lists. Where something is unclear, we say so.
“I have a voucher and want to know who accepts it.” Note your voucher status in your request. We research communities where voucher information is relevant and flag what to ask each property.
“I don’t want to pay application fees for nothing.” Your list includes unresolved questions and a suggested next step for each community, so you can confirm the key details before paying.
How Much Does a Tax Credit Apartment Cost in Texas?
There isn’t one answer, and we don’t publish city rent averages. Maximum rents are set by program tier and unit size, then reduced by a utility allowance when you pay some utilities yourself. A property’s actual asking rent can be lower than the maximum.
What matters for your budget is the total monthly cost: base rent, any utilities you pay, required monthly fees, and pet rent if it applies. Your list includes researched rent for your bedroom size with the date we checked it, plus published fees and deposits when available.
What Happens After You Move In?
Tax credit properties verify income at move-in, usually with a Tenant Income Certification (TIC) supported by third-party income verification. Many also require annual recertification, and you’ll need to report changes in household size and composition. Each property applies its own property-specific tenant selection criteria, so ask for them in writing before you apply.
Our guides walk through each of these steps in more detail. When you’re ready, start a request and we’ll research tax credit options built around your gross annual household income and the areas you choose.
