Program-Specific Glossary
Terms specific to LIHTC, OZ, HOME, HTC, NMTC, RAD, and other federal affordable housing programs.
Terminology specific to federal affordable housing programs — LIHTC, Opportunity Zones, HOME, HTC, NMTC, RAD, and others. These terms have precise statutory or regulatory meanings within their specific programs. Looking for general industry terms? See the General Glossary →
Qualified Allocation Plan (QAP)
The annual rulebook published by each state housing finance agency that governs how 9% LIHTC credits will be allocated. The QAP establishes scoring criteria, threshold requirements, set-asides for specific populations or geographies, cost containment limits, and the application schedule. Reading a state's QAP carefully is the single most important pre-application task in any competitive 9% deal.
Qualified Opportunity Fund (QOF)
A partnership or corporation organized to invest in Qualified Opportunity Zone Property and self-certified to the IRS. The QOF is the investment vehicle that receives capital gains rolled over by OZ investors within the 180-day reinvestment window. A QOF must satisfy a 90% asset test semi-annually, meaning at least 90% of its assets must be qualifying QOZ property.
Qualified Opportunity Zone Business (QOZB)
The operating entity that sits below a QOF in the two-tier OZ ownership structure. The QOZB is typically a partnership or LLC that owns the underlying real estate and actively conducts a trade or business in the QOZ. The QOZB must pass the 70% tangible property test annually and satisfy the substantial improvement requirement (doubling adjusted basis within 30 months).
Community Housing Development Organization (CHDO)
A nonprofit entity certified by a HOME participating jurisdiction to develop, own, or sponsor HOME-assisted affordable housing. HUD requires participating jurisdictions to reserve at least 15% of their annual HOME allocation for CHDO-developed projects. CHDO certification requires specific organizational, financial, and governance criteria.
Community Development Entity (CDE)
A specialized financial institution certified by the CDFI Fund to receive and deploy New Markets Tax Credit (NMTC) allocations. CDEs serve as the conduit between NMTC investors and qualifying low-income community projects. Receiving a CDE allocation is highly competitive and requires demonstrating a track record of community development finance.
Housing Finance Agency (HFA)
A state-level agency that administers the LIHTC program and typically other affordable housing programs within the state. HFAs allocate 9% LIHTC credits competitively through the QAP, issue tax-exempt bonds for 4% deals, and often operate state-level subsidy programs. Examples: NYS HCR, California TCAC, Florida Housing Finance Corporation, New Jersey HMFA.
Private Activity Bond (PAB)
Tax-exempt bonds issued by state or local governments for projects with significant private business use, including affordable rental housing. Each state has an annual PAB volume cap based on population. PAB-financed multifamily housing automatically qualifies for 4% LIHTC credits when the project meets the bond financing threshold (25% under OBBBA 2025, previously 50%).
Affordable Housing Program (AHP)
A competitive grant program operated by each of the 11 Federal Home Loan Banks. AHP awards subsidies (grants and below-market loans) to affordable housing projects through member financial institutions. AHP applications are submitted through a member bank and compete in annual or semi-annual rounds based on each FHLB's scoring criteria.
Rental Assistance Demonstration (RAD)
A HUD program that allows public housing authorities to convert public housing units to Section 8 project-based assistance (PBV or PBRA). RAD enables PHAs to leverage private capital, including LIHTC equity and conventional debt, to recapitalize aging public housing while preserving affordability. RAD conversions frequently pair with LIHTC.
New Markets Tax Credit (NMTC)
A federal tax credit administered by the CDFI Fund that provides a 39% credit (claimed over 7 years) for qualified investments in low-income community projects. NMTC capital flows through Community Development Entities (CDEs) and is typically deployed via leveraged structures. Made permanent under the One Big Beautiful Bill Act of 2025 at $5 billion annual cap.
Historic Tax Credit (HTC)
A federal income tax credit equal to 20% of qualified rehabilitation expenditures for certified historic structures. Administered jointly by the IRS, National Park Service, and State Historic Preservation Offices. HTC requires three-part NPS approval (Part 1 historic certification, Part 2 rehabilitation plan, Part 3 completed project certification) and is frequently paired with LIHTC.
Qualified Census Tract (QCT)
See Qualified Census Tract in the general glossary.
Difficult Development Area (DDA)
See Difficult Development Area in the general glossary.
HOME Investment Partnerships Program
A federal formula grant administered by HUD that provides funding to states and local participating jurisdictions to develop affordable housing. HOME funds are commonly used as subordinate debt or grants in LIHTC capital stacks. The program requires 25% matching contributions and includes specific income, rent, and use restrictions.
Housing Trust Fund (HTF)
A federal formula grant administered by HUD targeting extremely low-income households (at or below 30% AMI). HTF funds are allocated to states based on a formula and used primarily for new construction and rehabilitation of rental housing for ELI tenants. Frequently layered with LIHTC to enable deeper affordability.
Community Development Block Grant (CDBG)
A federal HUD program providing flexible formula grants to states and local governments for community development activities. CDBG funds can be used for affordable housing, public infrastructure, economic development, and other eligible activities. Often used as gap financing in LIHTC deals, particularly for site preparation and infrastructure costs.
Section 8
A general term referring to HUD's primary rental assistance programs under Section 8 of the Housing Act of 1937. Includes Project-Based Rental Assistance (PBRA), Project-Based Vouchers (PBV), and Housing Choice Vouchers (HCV). Section 8 contracts attached to LIHTC properties significantly improve operating economics and tenant stability.
Extremely Low Income (ELI)
Households at or below 30% of AMI, the deepest standard income tier in affordable housing programs. ELI units require deep operating subsidies (typically Section 8 or HTF) to be financially feasible because rents at 30% AMI rarely support debt service alone. Many state QAPs prioritize ELI unit creation in scoring.
Very Low Income (VLI)
Households at or below 50% of AMI. VLI is a common LIHTC income tier and the threshold for many HOME-assisted units. Below VLI is ELI (30% AMI); above is the standard 60% AMI LIHTC tier.
Income Averaging
A LIHTC minimum set-aside option introduced in 2018 that allows individual units to serve households between 20% and 80% AMI, as long as the project-wide average is 60% AMI or below. Income averaging is increasingly popular for mixed-income developments and projects targeting both ELI households and workforce housing in the same property.