What influences the amount of tax credits allocated to a LIHTC project?

The correct choice highlights that the project's location and affordability level significantly influence the amount of tax credits allocated to a Low-Income Housing Tax Credit (LIHTC) project. This is primarily because the federal program aims to target areas where affordable housing is most needed.

The project's location can determine the local demand for affordable housing, which is a critical factor for the allocation of tax credits. Areas that are in high need due to economic factors or housing shortages may receive a higher allocation of tax credits to encourage development. Additionally, the affordability level of the units within the project impacts the pricing structure and the income levels of the residents. Projects that serve lower-income households or that are located in qualified census tracts typically qualify for additional credits to ensure that affordable units are made available where they are most necessary.

The other options may hold relevance within the broader context of project financing and compliance, but they do not directly relate to the allocation of tax credits in the same way that location and affordability do. For instance, the total number of units can affect project feasibility, but it is not a primary factor in determining tax credit amounts. Similarly, while states do submit applications for tax credits, it is the characteristics of the project itself, especially regarding its targeted demographic and location