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The expectation that President Trump and Congress will cut corporate taxes is already affecting the pricing of LIHTCs for investors. The anticipation of comprehensive tax reform has made some LIHTC investors pause activity or make decisions based on the assumption of less equity per dollar of credit. Because the LIHTC is a dollar-for-dollar credit that allows corporations and banks to offset tax liability by investing directly in affordable housing projects, the value of these credits drop if tax rates go down.
