Iowa Finance Authority Awards Federal Housing Tax Credits to Advance Nearly 800 Rental Homes in Four Iowa Communities

Affordable Housing Projects Advancing in Cedar Rapids, Des Moines, Iowa City and Sioux City

DES MOINES – The Iowa Finance Authority (IFA) Board of Directors today awarded more than $11 million in 4% federal housing tax credits to support the construction and rehabilitation of 781 affordable rental homes across five projects in Cedar Rapids, Des Moines, Iowa City and Sioux City.

Recent federal changes to the 4% program have strengthened our ability to bring more projects forward, allowing us to award nearly twice as many units as last year and grow our pipeline at a time when Iowa needs more than 18,000 new homes by 2030.
IFA Director Debi Durham

The 4% Housing Tax Credit program pairs the state’s tax-exempt bonding authority with federal tax credits to help finance affordable housing developments. Similar to the 9% Housing Tax Credit program, it follows income limits and rent restrictions. Demand for the 4% program has grown significantly and federal reforms now allow more developments to qualify while using fewer bonds, substantially increasing the number of affordable housing projects that can proceed in Iowa.

As a result, the 2025 round marked the first competitive application cycle for the program. Applications were evaluated under a defined scoring system to ensure resources were awarded to projects best positioned to move forward.

IFA received eight applications requesting more than $18 million in tax credits and $125 million in tax-exempt bonds, with $90 million in bonds available for issuance. The tax credits awarded exceed $111 million as they are distributed annually over 10 years. The awarded projects will receive a combined $76.4 million in tax-exempt bond financing.

The federal Low-Income Housing Tax Credit program includes both 9% and 4% credits, each supporting different types of affordable housing needs. The 9% credit provides a higher level of equity and is awarded through a highly competitive process. The 4% credit, paired with tax-exempt bonds, provides a lower but still substantial level of equity and has seen significant growth in demand in Iowa. Together, the two programs expand the state’s affordable housing pipeline by supporting the construction and preservation of rental homes.