Community Investment Tax Credit Program (CITC)

The Community Investment Tax Credit (CITC) program, administered by the Tennessee Housing Development Agency (THDA), allows financial institutions to receive a credit against franchise and excise tax obligations when they make qualified loans, investments, grants, or contributions to eligible housing entities engaged in low-income housing activities.

The program has been used to structure preservation transactions in which banks provide short-term, interest-only acquisition loans to nonprofit housing providers, with philanthropic organizations serving as loan guarantors. This structure allows foundations to deploy endowment capital in support of affordable housing preservation without making direct grants, which can expedite project timelines relative to traditional grant processes.