FY 2026 MTSP Income Limits – Important Information for LIHTC Properties

May 8, 2026/Affordable Housing Connections

HUD has released the FY 2026 Multifamily Tax Subsidy Projects (MTSP) Income Limits for Low-Income Housing Tax Credit (LIHTC) properties. These income limits are effective May 1, 2026, and must be implemented within 45 days, no later than June 15, 2026.

HUD’s published MTSP income limits are available here.

Minnesota Housing is expected to calculate rents and publish the official FY 2026 rent and income limits mid-May. Once available, they will be available here.

Key Implementation Guidance

  • Hold Harmless Protection:

If the MTSP income limits for a project’s location decrease and the LIHTC project has already been placed in service, the project is held harmless and must continue using the prior year’s higher income limits – FY2025 limits.

The FY 2026 MTSP HERA Special Income Limits must be used only if both of the following conditions are met:

  • HUD designates this option for the project’s area; and
    • At least one building in the project was placed in service in 2008 or earlier.
  • Projects Placed in Service During the 45-Day Implementation Period (May 1–June 15, 2026):
    Projects placed in service during this period may elect to use either the 2025 or 2026 income limits, whichever is more favorable, at initial occupancy.
  • Projects Placed in Service After June 15, 2026:
    Projects placed in service after June 15, 2026, must use the FY 2026 income limits.

Rent Review Reminder

Owners and managers should carefully review current maximum gross rent limits, including all applicable utility allowances. Although hold-harmless provisions may permit rent limits to remain unchanged or increase for properties already placed in service, properties currently charging the maximum allowable rents may be required to adjust rents. In such cases, it is essential to comply fully with all resident notification, documentation, and procedural requirements.

The Low-Income Housing Tax Credit (LIHTC) program is administered by the Internal Revenue Service (IRS). Pursuant to an IRS revenue ruling, participating properties base their rents on the income limits that HUD is mandated to publish. Participating property owners are not required by HUD or IRS to raise rents based on updated income limit calculations. To the extent that owners increase rents, given the purpose of LIHTC is to keep units affordable, HUD encourages owners to increase them no more than what is needed to keep pace with rising costs and recognize that to promote housing stability, incremental increases are easier for tenants to absorb than sudden significant increases.

If you have questions or need assistance, please contact your AHC representative.

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