Funding
Housing and energy tax credits
Low-income housing tax credits remain the main tax tool for affordable rentals. Several federal home-energy credits ended in 2025 and 2026.
| Credit | Administered by | Status | Published details |
|---|---|---|---|
| Federal LIHTC, 9% and 4% | CTCAC (with CDLAC for tax-exempt bonds on the 4% side) | 2027 cycle not dated | 2026: 9% applications were due Apr 7 and Jul 21; 4% were due Feb 3, May 19 and Sep 8. Federal 9% credit $3.416 per capita; federal ceiling $136,381,450; rural set-aside $27,276,290; Northern Region federal credit $3,403,015. |
| California state LIHTC | CTCAC | 2027 cycle not dated | 2026 state credit ceiling $67,256,563. |
| §45L New energy efficient home credit | IRS | Ended | Not allowed for any qualified new energy efficient home acquired after June 30, 2026. |
| §25D Residential clean energy credit (solar, batteries) | IRS | Ended | Not allowed for expenditures made after December 31, 2025. For new construction, the expenditure counts when original use of the home begins. |
| §25C Energy efficient home improvement credit | IRS | Ended | Not allowed for property placed in service after December 31, 2025. |
Fit for small hemp homes
LIHTC is aimed at multifamily rental housing, and cost-containment scoring weighs against higher-cost materials. A small ownership village is not the typical LIHTC case. The federal energy credits that might have applied to solar on a new small home have ended.
Sources
- California Tax Credit Allocation Committee, 2026 application rounds. Checked Oct 17, 2026.
- CalHFA, CDLAC and tax-credit dates. Checked Oct 17, 2026.
- Congressional Research Service RS22389, Low-Income Housing Tax Credit. Checked Oct 17, 2026.
- IRS, FAQs for modification of sections 25C, 25D, 25E, 30C, 30D, 45L, 45W and 179D under Public Law 119-21. Checked Oct 18, 2026.
- 26 U.S.C. § 25D, Residential clean energy credit (subsection h, termination). Checked Oct 18, 2026.
Last updated Oct 18, 2026. Each source above was checked on the date shown.