Affordable Housing Financing Guide

9% Competitive LIHTC Financing

The 9% credit delivers roughly 70% of total development cost as equity, more than twice the 4% credit's share, which is why sponsors chase it for smaller deals where a deep equity contribution makes the difference between penciling and not. The tradeoff is a competitive scoring round through the state housing finance agency, multiple rounds per year, a winning threshold that varies by region and set-aside, and real risk of needing more than one application cycle before allocation.

Typical Deal Size$8M to $25M total development cost
Credit EquityApproximately 70% of total development cost
AllocationCompetitive scoring through state HFA rounds
Affordability Covenant55 years
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The Capital Stack

Most 9% LIHTC deals layer several sources rather than a single loan:

What actually wins a 9% scoring round

State HFAs score applications on a published point system, typically rewarding readiness (site control, entitlements in hand), leverage of other funding sources, and special-needs or homeless set-asides. Permanent supportive housing projects tend to score especially well because of the homeless and special-needs points layered on top of the base affordability scoring. We model the scoring profile before a sponsor commits capital to an application, not after a losing round.

Sizing the deal around the equity, not the debt

Because 9% equity covers so much of total development cost, the permanent loan on these deals is meaningfully smaller than on a comparable market-rate or 4%-financed project. That changes which lenders are actually competitive: smaller permanent loan amounts often favor a community bank or CDFI over a conduit or agency lender who needs loan size to justify the underwriting lift.

For the full program mechanics, see our deeper guide: Program Deep Dive →

Where We're Active

9% LIHTC Financing, By Market

Local financing guides for the markets where we're actively tracking 9% LIHTC deal flow.

Los Angeles

9% Competitive LIHTC Financing in Los Angeles.

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San Francisco

9% Competitive LIHTC Financing in San Francisco.

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San Jose

9% Competitive LIHTC Financing in San Jose.

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Long Beach

9% Competitive LIHTC Financing in Long Beach.

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San Bernardino

9% Competitive LIHTC Financing in San Bernardino.

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Aurora

9% Competitive LIHTC Financing in Aurora.

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Frequently Asked Questions

How many scoring rounds does it typically take to win an allocation?

It varies widely by state and region, but sponsors should budget for the possibility of two application rounds, not one, especially in high-demand metro regions where set-aside categories are oversubscribed.

Does the 9% credit require prevailing wage?

Yes, along with every other LIHTC-financed pathway. Budget it into the pro forma from the first application, since the scoring round itself often happens well before final construction pricing.

What set-asides tend to score best?

Permanent supportive housing and special-needs set-asides typically carry the most scoring points in most state HFA systems, followed by projects that layer multiple non-competitive funding sources onto the base LIHTC application.

Is 9% credit equity harder to place than 4%?

Not usually, once you've won the allocation. Most active LIHTC investors buy both 4% and 9% credits; the real friction on 9% deals is winning the scoring round, not finding an equity buyer afterward.

Have a 9% LIHTC deal?

Send us the site, the program you're targeting, and where it stands today. We'll come back within 24 hours with the lenders who actually close this structure and the stack we'd recommend.

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