CSAC Bulletin Article

California Tax Credit Allocation Committee (CTCAC)

January 25, 2024

What is the California Tax Credit Allocation Committee (CTCAC)?

The California Tax Credit Allocation Committee (CTCAC) administers the low-income housing tax credit program to encourage private investment in affordable rental housing for households meeting certain income requirements. Credits are available for new construction projects or existing properties undergoing rehabilitation. Specifically,

  • CTCAC allocates federal and state tax credits to the developers of these projects. Corporations provide equity to build the projects in return for the tax credits.
  • CTCAC allocates nine percent (9%) and four percent (4%) federal tax credits to qualified new construction projects or existing properties undergoing rehabilitation. These are the two types of federal tax credits that are available, and each number refers to the approximate percentage that is multiplied against a project’s requested “qualified basis” to determine the amount of annual federal credits CTCAC will award the project.
    • While low-income housing tax credits are referred to in annual terms, each 9% award earns investors 10 years of annual federal tax credits. The $117,721,696 in annual federal credits allocated in 2022 equates to $1,177,216,960 in total tax credits. 9% credits are desirable and in limited supply, CTCAC awards them through a competitive process twice per year.
    • The 4% tax credits derive from a project’s use of tax-exempt bond authority allocated by the California Debt Limit Allocation Committee (CDLAC) and are limited only by the amount of bond cap available to California. In 2022, CTCAC awarded $280,130,462 in federal 4% tax credits, that are claimed annually for 10 years, equating to more than $2.8 billion in total credits over 10 years.
  • TCAC verifies that the developers have met all the requirements of the program and provides federal compliance monitoring for the initial 15 years of each tax credit project and then continues auditing and monitoring the project through the regulatory agreement period, which could be as long as 55 years.

Why are low-income housing credits important?

The low‑income housing credit provides funding for developers—those that rehabilitate existing housing or construct new projects—to construct low‑income housing in the State, and the state credit generally requires developers to use it in conjunction with a federal low‑income housing credit. Both the state and federal credits cover funding shortfalls for such projects, and state law specifies that the combined state and federal credits must not cover more expenses than needed to make the projects economically viable. The California Tax Credit Allocation Committee is required to administer both credits, to award them on a generally competitive basis, and to oversee previously awarded projects for continued compliance.

The low-income housing credits incentivize private investment in projects that support the development of safe and quality affordable housing that contributes to the economic vitality of California through the allocation of tax credits.


CTCAC monitors a tax credit project for progress in meeting milestones and reservation requirements up until it is completed and placed in service. CTCAC’s compliance monitoring program must determine, among other requirements, whether the income of families residing in low-income units and the rents they are charged are within agreed upon limits stated in the regulatory agreement. CTCAC staff must conduct physical inspections of units and buildings in each development to ensure they are in safe, sanitary, and habitable condition. Project owners are also required to report complete and accurate project information to CTCAC annually. All non-compliance to federal requirements or reporting failures during the federal credit compliance period, whether corrected or not, is required to be reported to the Internal Revenue Service (IRS).

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