What does the term "substantial improvement" refer to in the context of the LIHTC program?

In the context of the Low-Income Housing Tax Credit (LIHTC) program, "substantial improvement" refers to significant renovations or enhancements made to a property that exceed specific thresholds established by the program. This usually involves upgrades that increase the value or usefulness of the property and ensure it meets the standards required for providing affordable housing. The improvements must go beyond mere maintenance or superficial changes, indicating a considerable commitment to enhancing the property.

In contrast, minor repairs, beautification efforts, or simple updates, such as landscaping, do not typically meet the threshold of "substantial improvement" as defined by the LIHTC guidelines. These activities may enhance the property in aesthetic or functional ways but do not fundamentally alter its capacity to serve as affordable housing or increase its overall market value significantly.