Income Targeting for Projects Claiming the North Carolina State Tax Credit

The North Carolina Housing Finance Agency (NCHFA) administers the state tax credit (STC) in conjunction with the North Carolina Department of Revenue (NCDOR). Projects with an award of 9% credits under the federal program are eligible for the STC. The state requires more restrictive income targeting for these projects, however (projects must comply with these limits for 30 years):

  1. If the project is in a High Income county: (a) 25% of the units must be affordable to households with incomes at or below 30% of Area Median Income (AMI), or (b) 50% of the units must be affordable to households with incomes at or below 40% of AMI.
  2. If the project is in a Moderate Income county: 50% of the units must be affordable to households with incomes at or below 50% of AMI.
  3. If the project is in a Low Income county: 40% of the units must be affordable to households with incomes at or below 50% of AMI.

The STC amount is equal to 10%, 20% or 30% of the development’s qualified basis (total development cost less non-depreciable costs and the cost to construct any market rate units). The STC percentage depends on the development’s location. High Income counties can claim a 10% STC; Moderate Income counties can claim 20%; Low Income counties can claim 30%. A chart showing which counties are considered high, moderate, or low income is found below:

Low-Middle-High Income Counties

Feel free to contact me (Jeff Carroll) at 704-905-2276 with any questions you may have regarding your tax credit financed property.