LIHTC and Income-Restricted Apartments in Chicago

Many of Chicago's affordable apartments exist because of a federal tax credit program you will never apply to directly. Here is what that means when you walk into the leasing office.

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By Chicago Affordable Housing Guide Editorial TeamReviewed July 2026

If a Chicago listing says "income-restricted," "tax credit," or "affordable — income limits apply," there is a good chance you are looking at a Low-Income Housing Tax Credit (LIHTC) apartment. LIHTC is the largest source of newly built and rehabilitated affordable rental housing in the country, and it operates quietly in the background of ordinary-looking apartment buildings.

The idea is straightforward. Owners and developers receive federal tax credits, and in exchange they agree to keep a set number of apartments affordable to households under published income limits for decades. You do not apply to the program, to the IRS, or to the state agency that awards the credits. You apply to the building, exactly as you would for a market-rate apartment — with an extra income verification step.

Income limits, minimum income standards, preferences, waitlists, and application processes vary by property. This page explains general patterns, not the rules of any specific building. Confirm details with the leasing office before you rely on them.

Why a building offers income-restricted apartments

Affordable rents rarely happen by accident. They are usually the result of a financing or regulatory commitment: tax credits, tax-exempt bonds, a City of Chicago development agreement, a land write-down, or a long-term affordability covenant recorded against the property. LIHTC is the most common of these.

Because the commitment attaches to the building, the reduced rent belongs to the apartment rather than to you. That is the same structure used by Chicago ARO apartments and by many privately managed affordable buildings, and it is the opposite of how a Housing Choice Voucher works.

Common income restrictions, and why they vary

Most LIHTC units are limited to households at or below 30%, 50%, 60%, or 80% of area median income. A single building often mixes tiers — a few deeply affordable apartments, a larger block at 60%, and sometimes unrestricted market-rate units in the same hallway. Some properties use income averaging, where the tiers across the building have to average out to a target, which is why the limit can differ from unit to unit.

Household size matters as much as income. Limits rise with the number of people in the household, and properties also apply occupancy standards for how many people may live in a given bedroom count. Our 2026 Chicago income limits page shows the published tiers by household size, and the Chicago AMI calculator estimates which tiers a household may fall into. Both are educational estimates, not eligibility determinations.

How rents are set in a LIHTC apartment

The rent is a published maximum tied to the unit's income tier and bedroom count, and it usually includes a utility allowance adjustment. Two consequences surprise renters most often. First, everyone in the same unit type faces the same maximum restricted rent for that tier regardless of whether they earn near the top or the bottom of the limit. Second, the maximums can change when new limits are published, so rents in income-restricted buildings are not frozen forever.

Ask which utilities you pay directly, since that changes the real monthly cost more than most renters expect. Our Chicago apartment move-in checklist walks through utility setup and first-month costs.

How income is verified and reviewed each year

Before move-in, a property certifies your household income from all sources — employment, self-employment, benefits, support payments, and in some cases income from assets. Many properties then recertify annually, though requirements differ depending on the building's financing and whether every unit is income-restricted.

Going over the limit after you move in does not automatically mean you must leave; many programs allow existing households to remain, sometimes with a rent change. Rules vary by property, so confirm rather than assume. If your income is irregular, read our guide to qualifying with self-employment income, and use the document checklist to prepare paperwork.

LIHTC compared with the other programs

Comparison of LIHTC apartments, ARO apartments, and Housing Choice Vouchers in Chicago
 LIHTC apartmentARO apartmentHousing Choice Voucher
Why it is affordableFederal tax credits given to the ownerA City of Chicago ordinance requirement on the developmentA housing authority pays part of the rent
How rent is setCapped maximum by tier and bedroom countCapped maximum by tier and bedroom countGenerally a share of household income
Where you applyThe propertyThe property or its lotteryChicago Housing Authority waitlist
Moves with you?NoNoUsually yes, if tenant-based

General orientation only. A single building can participate in more than one program, and the controlling rules are always the ones in that property's agreements.

Questions to ask the leasing office

  • Which income tier applies to this exact unit, and what is the limit for my household size?
  • Is there a minimum income or rent-to-income requirement?
  • Which utilities are included, and is there a utility allowance?
  • How is income verified, and how often is it recertified?
  • Is there a waitlist, and are there any preferences that affect ordering?
  • Do you accept Housing Choice Vouchers for these units?

Then compare buildings side by side using our Chicago affordable apartment listings and neighborhood guides.

LIHTC and income-restricted apartment questions

What does LIHTC mean?

LIHTC stands for the Low-Income Housing Tax Credit, a federal program that gives private developers and owners tax credits in exchange for keeping a share of their apartments affordable for a long period. Renters never apply to the tax credit program itself — you apply to the individual building.

How is a LIHTC apartment different from an ARO apartment?

Both are rent-restricted, so the rent is a capped amount rather than a share of your income. The difference is where the requirement comes from. LIHTC affordability comes from federal tax-credit financing, while Affordable Requirements Ordinance units exist because a City of Chicago ordinance requires certain new developments to include below-market apartments. A building can be subject to more than one program at once.

How is a LIHTC apartment different from a Housing Choice Voucher?

A Housing Choice Voucher is rental assistance that follows the household and generally sets your payment at a share of your income. A LIHTC apartment has a capped rent that everyone in that unit type pays, regardless of what you earn within the limit. Voucher holders can often use a voucher in a LIHTC apartment, but the two are separate programs.

What income limits apply to LIHTC apartments in Chicago?

Most LIHTC units are restricted to households at or below 30%, 50%, 60%, or 80% of area median income, and the exact tier is set unit by unit. Some properties use an income averaging approach, which is why two apartments in the same building can have different limits. Income limits and eligibility requirements vary by program and property — always confirm the tier for the specific unit.

Is there a minimum income for a LIHTC apartment?

Many properties apply a minimum income or rent-to-income ratio, plus credit and rental history screening, because the capped rent still has to be paid in full each month. There is no single citywide standard, so ask the leasing office what they use before you apply and pay any fee.

Do LIHTC properties have waitlists?

Often yes, and each property maintains its own. Being on one building's list does not place you on another's, and it does not put you on a Chicago Housing Authority list. Apply to every property you are genuinely interested in and keep your contact information current with each one.

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