Following our last post regarding the BPC recommendation to expand LIHTC allocations, it is important to recognize the overwhelming success of the Low-Income Housing Tax Credit program since its inception in 1986. According to CohnReznick’s recent study, “The Low-Income Housing Tax Credit Program at Year 25,” LIHTC properties performed remarkably well during the recent economic crisis. Analyzing occupancy, debt coverage ratio and per unit net cash flow of over 17,000 housing credit properties, highlights of the study include:

– For the last 15 years demand for housing tax credits has exceeded supply almost every year.

– Over the past decade, occupancy level has consistently been approximately 96%.

– LIHTC properties continue to maintain a foreclosure rate that is less than 1%.

– Median DCR has climbed to 1.24 in 2010.

– Annual net cash flow per apartment rose from $250 in 2008 to $419 in 2010