How LIHTC affordable apartments work in Texas

The Low-Income Housing Tax Credit program is the single largest source of affordable rental housing built in the United States, and it’s likely behind a meaningful share of the “affordable apartment” listings you’ll find across Texas. Understanding how it actually works helps you search smarter and know what to expect once you’re a tenant.

Where these apartments come from

LIHTC works by giving developers a federal tax credit in exchange for building or renovating apartments and renting a portion of the units at capped, income-restricted rents for a set period, often 15 to 30 years. This is different from public housing, which the government owns directly, and different from a voucher, which follows the tenant rather than the building. A LIHTC property is usually privately owned and managed, just operating under a rent restriction tied to the tax credit deal. You can browse affordable and subsidized apartments across Texas to see LIHTC and similar income-restricted communities together. For a full breakdown of what these units actually cost month to month, see our guide on what income-based apartments cost in Texas.

How rent is actually set

Rent at a LIHTC unit is capped based on a percentage of the area median income for the county, adjusted for unit size, not based on your specific paycheck. That means your neighbor earning a different income than you, in an identical unit, pays the same capped rent as long as both of you qualify under the property’s income limits. This is the opposite of how a Section 8 voucher works, where rent recalculates around your individual income.

Feature	LIHTC apartment	Section 8 voucher
Who owns the property	Usually a private developer	Any participating landlord
How rent is set	Fixed cap tied to area median income	Recalculated around your income
Portability	Tied to that specific property	Follows you if you move, with process
Application process	Direct with the property	Through your local public housing authority

Finding units and applying

Unlike Section 8, there’s no single statewide waiting list for LIHTC apartments. Each property manages its own waiting list, and some have short or no waits at all if a building recently opened or has ongoing turnover, while established, well-located properties can have longer lists. This is worth remembering if you assumed all affordable housing has multi-year waits, since LIHTC availability moves faster than that reputation suggests in a lot of cases.

Applying looks like applying for any apartment: an application, income documentation (pay stubs, benefit letters, or a self-employment statement), and a background and rental history check. The property verifies your income falls within their program’s band, sometimes requiring multiple pay periods or a full tax return if your income is variable.

Can you use a voucher at a LIHTC property

Sometimes. Some LIHTC properties also accept Housing Choice Vouchers, effectively stacking both programs, which can lower your out-of-pocket rent below even the LIHTC cap. Ask directly whether a specific property accepts vouchers, since it isn’t guaranteed just because a building is income-restricted.

Why the same building can have different rents by unit

A single LIHTC property often sets aside units at more than one income band, meaning a one-bedroom reserved for households under 50 percent of area median income can rent for noticeably less than an identical one-bedroom reserved for the 60 percent band in the same building. This confuses a lot of applicants who assume unit type alone determines price. Ask specifically which income band a given unit is designated for, and confirm your household’s income actually fits under that band’s ceiling, not just the property’s overall range.

What to watch for before you sign

Confirm the property’s current income limits match your household size and income before you pay an application fee, since limits are recalculated periodically and a property’s advertised range can lag an update. Ask what happens if your income changes after move-in, since most LIHTC leases require annual recertification even though your rent stays capped rather than recalculated to the dollar.

Our directory tracks affordable housing communities across Texas, and our ranking method explains how we score listings on responsiveness, condition, and value for money.