Colorado will soon launch a tax credit program to help support affordable housing for the “missing middle.”
Believed to be the first of its kind in the nation, the middle-income housing tax credit (MIHTC) will help finance the development or preservation of rental housing for households with incomes between 80% and 120% of the area median income (AMI) or up to 140% of the AMI in designated rural resort counties in the state.
The Colorado Housing and Finance Authority (CHFA) is working on establishing an allocation plan for the pilot program, which will go into effect next year after being recently approved by state lawmakers and signed into law by Gov. Jared Polis.
The MIHTC seeks to build on the success of the federal low-income housing tax credit (LIHTC) and Colorado’s state affordable housing tax credit programs (AHTC), which serve residents with incomes up to 80% of the AMI.
It is also based on the recent success of CHFA’s Middle-income Access Program (MIAP), which was created in 2017 following strong community feedback about the need for more housing options affordable to middle-income households. The MIAP program offers mezzanine debt financing to help finance middle-income rental housing development. The MIHTC program will help residents with incomes above LIHTC and AHTC limits but who are still cost burdened when paying for market-rate housing.
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