Housing Tax Credits

The Low-Income Housing Tax Credit (Housing Tax Credit) Program awards and allocates federal tax credits to owners of qualified affordable rental housing projects. These Housing Tax Credits (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 HTC: 9% and 4% with Tax-Exempt Volume Limited Bonds

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

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

4% HTC are available year-round. There are two ways to apply for 4% HTC from Minnesota Housing:

Multifamily Consolidated RFP – Projects that were selected for deferred funds with 4% HTC financial structure in the annual Multifamily Consolidated RFP and Minnesota Housing is the bond issuer, must apply for 4% HTC through the 42M application using the Multifamily Customer Portal. The checklist is located within the funding round that project was selected.
4% HTC Only Application Round – Projects expected to be financed with tax-exempt volume limited bonding authority from Minnesota Management and Budget (MMB) and don’t need or have not been awarded funding from Minnesota Housing, must apply through the applicable 4% HTC Only Application Round using the Multifamily Customer Portal.

Application Rounds

2025 Housing Tax Credit Round 2: Applications for this round closed at noon C.T. on February 13, 2025. Visit the Housing Tax Credit Round 2 webpage for more information.

2025 4% HTC Only: Minnesota Housing is currently accepting pre-applications and full 42M applications for an award of 2025 4% HTC Only (4% HTC 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% HTC) Program and how to apply for 4% HTC Only.

2025 Multifamily Consolidated RFP/2026 HTC Round 1: If you are a potential applicant and planning for the 2025 Multifamily Consolidated RFP and 2026 HTC Round 1, sign up for our eNews to learn about important dates, trainings, and more.

New State Prevailing Wage Requirement

In the 2024 legislative session, the state prevailing wage statutes (Minnesota Statute 116J.871) were amended to include new reporting requirements and to broaden prevailing wage applicability for multifamily rental housing projects that receive funding from Minnesota Housing.

Projects selected for an award or allocation of federal low-income housing tax credits (Housing Tax Credits) on or after January 1, 2025: For purposes of an award, selection is defined as the issuance of the 42M preliminary determination letter by Minnesota Housing. For purposes of an allocation, selection is defined as Minnesota Housing board action to select a project for future reservation and allocation of LIHTC through Round 1 or Round 2.

Visit Minnesota Housing’s Prevailing Wage webpage and review the Frequently Asked Questions document for more information on the prevailing wage requirements, applicability, and reporting.

Housing Tax Credit Documents

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

2026 HTC Documents

These documents have been approved by the Minnesota Housing board. They require the governor's approval, which is expected to occur in February 2025.

2025 HTC Documents

2024-2025 Qualified Allocation Plan (QAP)
2024-2025 Self-Scoring Worksheet
Scoring Guide: 2024 Consolidated RFP/2025 HTC
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)

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

What's New

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

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.

Authorized Market Analysts List

Authorized Market Analysts List - revised December 2024

Authorized Market Analysts List Updates: Renewals and New Applications

Minnesota Housing is not currently accepting applications or renewals for the Authorized Market Analysts List. The application period will open in July 2025 for market analysts who are not currently authorized and want to be considered for authorization to submit market studies in the 2025 Multifamily Consolidated RFP/2026 HTC Funding Rounds.

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.