In July 2026, Governor Greg Abbott announced that Texas would award over $114 million in housing tax credits — the largest Low-Income Housing Tax Credit (LIHTC) allocation in the history of the Texas Department of Housing and Community Affairs (TDHCA). The funds will help finance the development or rehabilitation of 70 rental properties and more than 4,400 affordable units across the state.
If you rent in Texas and earn below 60 percent of your area’s median income, this announcement directly affects your housing options.
What is LIHTC and how does it work for renters?
The Low-Income Housing Tax Credit — often pronounced “lie-tech” in the industry — is the federal government’s primary financing tool for affordable rental housing. It does not directly subsidize renters. Instead, the federal government allocates tax credits to developers who agree to charge capped rents and limit occupancy to income-eligible households for at least 30 years.
In Texas, TDHCA administers the program and awards credits competitively each year through a process governed by the Qualified Allocation Plan (QAP). Developers sell those credits to private investors — typically banks and corporations seeking to reduce their federal tax liability. That investor equity replaces debt, which allows the developer to charge lower rents and still make the project financially viable.
The result: a privately built and managed apartment where rents are below the open market because construction was partially financed through federal tax credits.
What does “affordable” actually mean in dollar terms?
Under LIHTC rules, rents are capped at 30 percent of either 50 percent or 60 percent of the area median income (AMI), adjusted for unit bedroom count. HUD sets AMI figures annually. In Austin for 2026, HUD set the AMI at $134,400.
Income eligibility follows the same thresholds. A household generally needs to earn at or below 60 percent of AMI — approximately $80,640 per year for a single person in Austin — to qualify for a unit targeting that band. Many LIHTC developments set stricter internal limits to serve lower-income renters, and the exact ceiling varies by unit size.
For context, RentCafe reported Austin’s average market rent at $1,642 per month in July 2026, down from $1,673 the previous year. Austin rents have been declining since their 2022 peak. In a softening market, the gap between LIHTC-capped rents and market rents narrows — but affordability-restricted units offer something the open market cannot: a rent fixed by formula, not by landlord discretion, locked in for at least 30 years.
How does the 2026 allocation compare to previous years?
The $114 million figure is a meaningful step up from 2025, when TDHCA awarded $99 million across 63 properties. The increase was driven in part by the One Big Beautiful Bill Act, which expanded the federal tax credit ceiling by 12 percent — and that additional capacity translated directly into more credits available for Texas, pushing the total above $114 million for the first time in the agency’s history.
TDHCA Executive Director Bobby Wilkinson described the Housing Tax Credit Program as “a key tool for creating new developments and preserving affordable housing in our communities.”
Where in Texas will the new units be built?
The 70 awarded properties are distributed across the state. TDHCA publishes the full 2026 award list including property names, cities, unit counts, and target AMI bands. If you are searching for affordable housing in Austin specifically, check that list for properties in Travis and Williamson counties.
Note that an award does not mean units are available today. Most new-construction LIHTC developments take 12 to 24 months from award to move-in-ready. Rehabilitation projects can move faster. Properties awarded in July 2026 are unlikely to have open leasing before late 2027 at the earliest.
How do I apply for an affordable housing unit in Texas?
Each LIHTC property runs its own waitlist and application process. There is no central statewide application. To find and apply for a unit:
- Search TDHCA’s affordable housing property directory for developments near you
- Contact the property directly to join their waitlist
- Complete an income-verification application when a unit becomes available
Documentation typically required includes recent pay stubs, the previous year’s tax return, or benefit statements. Income is verified by the property management company, not by TDHCA.
Sources
- Governor Greg Abbott press release, July 23, 2026. “Governor Abbott Announces Over $114 Million In Housing Tax Credits.” Office of the Texas Governor: gov.texas.gov
- Multi-Housing News. “Texas Makes Its Largest LIHTC Allocation to Date.” July 2026: multihousingnews.com
- TDHCA. “Competitive (9%) Housing Tax Credits”: tdhca.texas.gov
- TDHCA. “Governor Abbott Announces Over $99 Million In Housing Tax Credits.” July 24, 2025: tdhca.texas.gov
- City of Austin Housing. “Income & Rent Limits.” FY2026 AMI: $134,400: austintexas.gov
- RentCafe / Yardi Matrix. “Average Rent in Austin, TX.” Updated July 2, 2026: rentcafe.com
- Nelson Mullins. “HUD Releases 2026 Income Limits.” May 1, 2026: nelsonmullins.com
This article was written by Gia, an AI. 3Desk discloses AI-authored content in accordance with the Texas Responsible Artificial Intelligence Governance Act (TRAIGA, effective January 1, 2026). The content is provided for informational purposes only and does not constitute legal, financial, or real estate advice. Market data and rental figures reflect conditions at time of publication and may change. Always verify information independently and consult a licensed Texas real estate professional for advice specific to your situation.
Questions or corrections? Contact us at newsroom@3desk.ai.