Illinois Affordable Housing Tax Credit (Donations Tax Credit)

The Illinois Affordable Housing Tax Credit (IAHTC), also known as the Donations Tax Credit, provides a $0.50 state income tax credit for each $1 contributed to a qualified affordable housing project. Donations, which may be cash, securities, or real or personal property, must total at least $10,000 and may be aggregated. Project sponsors must be non-profit organizations with a mission to construct or rehabilitate affordable housing.

The funds must be used for projects that meet the definition of affordable housing. Qualified projects must include units that benefit families who earn up to 60% of area median income. That's $45,240 for a family of four.

Illinois has committed $13.65 million in tax credits across the state for 2003. The program will leverage over $26 million for affordable housing statewide. Chicago will receive 24.5% of total tax credits each fiscal year, which means over $6 million for developers to build and restore affordable housing. The Illinois Housing Development Authority (IHDA) and the City of Chicago Department of Housing (DOH) allocate tax credits to approved housing projects.

Eligible projects include the following:

• Affordable rental and homeownership developments;
• Employer-assisted housing projects;
• Homeownership counseling programs in Chicago.

Application Process:
For projects planning to apply for other DOH funds, the IAHTC application is incorporated into existing applications. A stand-alone application is available, but this application is only for projects that do not propose to use any other DOH funds. The stand-alone application, employer-assisted housing application, and homeownership counseling application may be obtained by calling 311.

Federal funding applications occasionally require applicants to submit the "Questionnaire for HUD's Initiative on Removal of Regulatory Barriers" (Form 27300 attached below). This chart, completed in May 2005, reflects the City's efforts to remove barriers to affordable housing.