The recent expansion of the Low-Income Housing Tax Credit (LIHTC) program marks a significant step for the multifamily industry. With the 9% credit allocation restored and extended through 2029, the update strengthens the foundation for new affordable housing construction and rehabilitation projects across the country.

 

A Shift in Multifamily Development 

The One Big Beautiful Bill increases the 9% LIHTC allocation to 12.5%, which is expected to help finance roughly 500,000 affordable rental homes between 2026 and 2035. For developers and investors, this is the largest program increase in two decades.

 

Key markets such as California, Texas, Georgia, New York, and Florida are projected to see higher affordable housing activity. With greater competition for tax credits, land, and construction partnerships, early preparation will be essential. Developers who plan ahead can align project timelines, secure resources, and position portfolios to benefit from the expanded allocation.

 

Revisiting Pipeline Strategy 

The extended allocation window gives multifamily owners the chance to revisit delayed or shelved affordable housing projects and bring them forward. It also opens opportunities for new developments that combine rehabilitation, energy efficiency upgrades, and community enhancements under one financing structure.

 

Properties nearing the end of their compliance periods can also benefit. Repositioning these assets through new LIHTC allocations helps extend affordability, strengthen performance, and protect long-term property value. Coordination between ownership teams, management partners, and state housing agencies will ensure projects meet program requirements and capture the full benefit of the credits.

 

Balancing Affordability and Asset Strength 

The LIHTC expansion supports the ongoing need for attainable housing in markets where supply remains tight. For multifamily owners, this update provides a path to stabilize portfolios while addressing community needs. Affordable properties often maintain steady occupancy rates and consistent rent collections, improving operational stability and long-term returns.

 

The additional credits also encourage the rehabilitation of existing multifamily housing. Many communities are focusing on preserving older properties instead of rebuilding them completely. LIHTC funding can help finance these preservation efforts, enhance livability, and extend the useful life of buildings. 

 

Positioning for What’s Next 

This expansion signals a continued federal commitment to affordable multifamily housing and outlines a clear direction for industry growth. For executives, the focus now shifts to aligning portfolio planning, financing strategies, and development timing with the program’s opportunities.

 

The multifamily sector will benefit most from active engagement with the updated LIHTC framework. Owners and developers who coordinate early, plan capital improvements, and prepare applications will be best positioned to take advantage of the expanded allocations.

 

The LIHTC expansion strengthens communities, advances attainable housing, and builds long-term stability across the multifamily market.

 

Partner with Matrix Construction Services 

Matrix Construction Services supports multifamily developers and owners in navigating multifamily projects with efficiency and expertise. From interior and exterior renovations to full rehabilitation, our team delivers solutions that improve property value, attract new residents, and ensure lasting community impact. Reach out to us to learn how we can help your next project succeed.