How do green building standards relate to LIHTC eligibility?

Green building standards are increasingly integral to the Low-Income Housing Tax Credit (LIHTC) program. Projects that adhere to these standards may receive additional consideration during the application process. This is because many state housing finance agencies (HFAs) are prioritizing sustainability and energy efficiency as part of their goals to promote better living conditions and to contribute to environmental initiatives.

By meeting green building standards, a developer may enhance their project's appeal, potentially improving their ranking within the competitive allocation process for tax credits. Many states have incorporated green building certifications, such as LEED or Energy Star ratings, into their qualifying criteria for LIHTC, recognizing the long-term benefits of energy-efficient housing both for residents and the environment. Thus, being aligned with green building practices can positively influence a project's likelihood to receive funding and tax credits.