Treasury Details LIHTC Bonus Credit for Solar and Wind Projects
The Department of Treasury and Internal Revenue Service released IRS Notice 2023-17, which details a new bonus tax credit for certain low-income multifamily projects, including Low-Income House Tax Credit (LIHTC) projects, that include eligible solar or wind energy technologies.
Qualifying solar and wind equipment is eligible for a federal tax credit of up to 30% of the cost as part of the Section 48 Investment Tax Credit. Under the Inflation Reduction Act enacted into law last year, Congress established a low-income communities bonus credit program, which allows certain Section 48-eligible projects to receive an additional 10% or 20% credit.
Unlike traditional tax credits, the low-income communities bonus credit program is capacity limited, meaning eligible taxpayers must apply for an allocation of "capacity limitation" in order to claim the bonus credit. This notice provides initial guidance regarding the application process and criteria that will be considered for applications. Additional guidance will be released later this year with the specific application procedures.
Projects located on Indian land or in a low-income community are eligible for a 10% bonus credit. This generally includes census tracts with a poverty rate of at least 20% or with a median family income of 80% of a metropolitan area or state.
Projects are eligible for a 20% bonus credit if the project is a qualifying low-income residential building. A qualified low-income residential building must participate in an affordable housing program, which includes the "covered housing programs" defined in the Violence Against Women Act (34 USC 12491(a)(3), which includes a number of U.S. Housing and Urban Development and U.S Department of Agriculture programs as well as LIHTC.
A low-income economic benefit project may also be eligible for a 2% bonus credit if at least half of the financial benefits of the electricity produced are provided to eligible low-income households.
Latest from NAHBNow
Economics
Nov 05, 2026
Multifamily Developer Confidence Weakens in Third Quarter
Confidence in the market for new multifamily housing weakened year-over-year in the third quarter, according to the Multifamily Market Survey (MMS) released today by the National Association of Home Builders (NAHB). The MMS produces two separate indices. The Multifamily Production Index (MPI) had a reading of 41, down five points year-over-year, while the Multifamily Occupancy Index (MOI) had a reading of 69, also down five points year-over-year.
Advocacy
Nov 04, 2026
Podcast: What the Blue Wave May Mean for Housing
On the latest episode of NAHB’s podcast, Housing Developments, CEO Jim Tobin and COO Paul Lopez are joined by Chief Advocacy Officer Ken Wingert to discuss the immediate aftermath of the midterm elections.
Latest Economic News
Economics
Nov 04, 2026
Mortgage Applications Decline as Higher Rates Boost ARM Share
Mortgage application activity declined in October as the 30-year fixed mortgage rate rose sharply again. The Mortgage Bankers Association’s (MBA) Market Composite Index, a measure of total mortgage application volume, fell 14.1% month-over-month in October on a seasonally adjusted basis. Compared to a year ago, total mortgage applications were 39.8% lower.
Economics
Nov 04, 2026
Laundry Room Locations in New Homes and Apartments, 2025
In 2025, the majority of homes started featured laundry connections on the first floor (70%), according to the Census’s Survey of Construction. Laundry located on the second floor or higher was the second most prevalent at 27%. The basement, garage, and other locations all had a 1% or lower share.
Economics
Nov 03, 2026
Mortgage Rates Climb in October Amid Accelerating Inflation
Mortgage rates rose sharply again in October as the U.S. treasury yields surged. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 7.33% in October, up 47 basis points (bps) from September. The rate reached 7.40% in early October, its highest level since 2023, before easing toward the end of the month.