The IRS recently released population data in Notice 2025-18 that will be used to calculate each state’s limits for 9 percent Low-Income Housing Tax Credits (LIHTCs) and private activity bonds (PABs). These figures determine the annual volume caps for these critical affordable housing resources. The new figures reflect both an increase in national population and an increase in the per capita allocation rates, resulting in record-high national totals.

By statute, each state receives an allocation of LIHTCs and PABs based on its population. In other words, the pool of 9 percent credits in any given year is limited. And for each state, the annual volume cap for 9 percent tax credits is measured as the product of a fixed per-capita rate multiplied by the state’s population.

Record-Setting Allocations

Last October, the IRS provided the 2025 per capita and small-state minimum levels for the LIHTC and PABs. For 2025, the per capita amount is $3 for LIHTCs and $130 for PABs. However, if a state’s population is below a certain threshold, it receives a small-state minimum allocation instead. As a result, states receive whichever is greater, the per capita calculation or the fixed small-state minimum. For 2025, those thresholds are:

            •          1,137,233 residents for the LIHTC small-state minimum of $3,455,000

            •          2,970,606 residents for the PAB small-state minimum of $388,780,000

The 1.5 percent increase in U.S. population from 2024 to 2025 along with the higher per capita multipliers have contributed to record-setting allocation levels for the upcoming year. The national LIHTC volume cap for 2025 has risen to roughly $1.1 billion, representing a 4.9 percent increase over the prior year. Meanwhile, the private activity bond cap reached an all-time high of $48.3 billion, marking a 5.2 percent increase from 2024.

These gains come after a period of decline in 2022 and 2023, which followed the expiration of a temporary 12.5 percent boost in LIHTC allocations that had been in place from 2018 through 2021. Lawmakers have renewed efforts to restore and make that boost permanent through the Affordable Housing Credit Improvement Act (AHCIA), which was reintroduced in Congress earlier this year.

Minimum Allocation States

While most states saw modest population growth, the consistent application of small-state minimums ensures that smaller states and U.S. territories continue to receive a baseline level of federal support for affordable housing development. Eight states—Alaska, Delaware, Montana, North Dakota, Rhode Island, South Dakota, Vermont, and Wyoming—as well as the District of Columbia and four U.S. territories (American Samoa, Guam, the Northern Mariana Islands, and the U.S. Virgin Islands) will receive the small-state minimum allocation for 9 percent LIHTCs. These are the same jurisdictions that received the minimum in 2024.

Those same eight states, plus Hawaii, Idaho, Kansas, Maine, Mississippi, Nebraska, New Hampshire, New Mexico, and West Virginia, will receive the PAB small-state minimum in 2025. The District of Columbia will also receive the small-state minimum PAB cap. U.S. territories receiving the LIHTC minimum do not necessarily receive the full PAB minimum due to different statutory calculations for territories.