2025 LIHTC and Bond Volume Caps Hit New Records

On Oct. 22, the Internal Revenue Service announced an increase in the LIHTC and private-activity bond volume caps for 2025. The announced changes represent a milestone in the effort to bolster affordable housing financing across the country. Both the 9 percent LIHTC multiplier and the private activity bond multiplier figures are new records, as are the small-state minimums for both categories.

LIHTC cap. According to Revenue Procedure 2024-40, the LIHTC per-capita multiplier will reach $3 for the first time for the federal 9 percent LIHTC. Also, the small-state minimum for the 9 percent LIHTC will also rise to $3,455,000, up from $3,360,000 in 2024. The updated multiplier means that the amount used to determine states’ housing credit ceiling will now be calculated as $3 multiplied by the state population. This increase is especially significant for states with larger populations as it allows for a greater allocation of resources to support the development and rehabilitation of affordable housing projects.

PAB cap. The Revenue Procedure also announced an increase in Private Activity Bonds (PABs). For 2025, there will be a $5 increase in the per-capita multiplier for private activity bonds, bringing it to $130. Similar to the LIHTC multiplier, the PAB ceiling will be determined by either $130 multiplied by the state population or a minimum of $388,780,000, up from $378,230,000 this year.

Rehab minimum. In addition to the multiplier increases, the LIHTC rehabilitation per-unit minimum will see a rise to $8,500, a $200 increase from the 2024 amount. This adjustment encourages the rehabilitation of existing housing stock, ensuring that sites can be updated and maintained to provide safe, affordable living conditions.