LIHTC Market Study Requirements in Illinois

The agency & primary document

Allocating agency

Illinois Housing Development Authority (IHDA)

QAP / guidelines

https://www.ihda.org/developers/tax-credits/

Governing document

2026 Standards for Site and Market Study Reviews and Professionals (separate from QAP)

Methodology

NCHMA Model Content Standards

Required market study sections

Illinois market studies follow the NCHMA Model Content Standards. The required sections are:

• Executive Summary — Concise summary of each section including data, analysis, and conclusions. 11 minimum content items including feasibility opinion, strengths/weaknesses, absorption estimate.
• Introduction and Scope of Work — Purpose, intended use, intended users, scope of work, effective date, physical inspection date.
• Project Description — Unit mix, utilities, target market, unit and community amenities, construction date. If rehab: scope of work, existing rents and vacancies.
• Location — Site description, site photos/maps, community services map, neighborhood evaluation (visibility, accessibility, crime).
• Market Area Definition — PMA description and rationale, PMA map. Extended/secondary market area if applicable.
• Employment and Economy — Employment trends, employment by sector, unemployment rates, major employers and proximity, planned expansions/reductions.
• Demographic Characteristics — Population and household estimates/projections, building permits, household characteristics (income, tenure, size). Senior/special needs: target-market data.
• Competitive Environment — Comparable profiles and photos, map of comps, vacancy and rents analysis, subject comparison, affordable housing alternatives, pipeline projects.
• Affordability Analysis, Demand Analysis, Capture Rates, and Penetration Rates — Demand estimate, affordability analysis, capture rate, penetration rate.
• Local Perspective of Rental Housing Market and Housing Alternatives — NEW in MCS 3.1 (September 2025). Local market context and housing alternatives beyond standard comparable analysis.
• Analysis / Conclusions — Absorption rate and lease-up timeline, market feasibility statement, strengths and weaknesses, key conclusions reconciling any conflicting indicators, recommendations if any.
• Other Requirements — Analyst qualifications, data sources, physical inspection date, limiting conditions, signed certification.

Key Illinois rules

Illinois-specific overlays

• CRITICAL: Capture rate denominator = ALL income/age-eligible households, NOT renters only — renter-only denominator is WRONG for Illinois
• Mandatory section: Impact on Other IHDA Properties (separate analysis from impact on non-IHDA affordable housing)

Required companion documents

• 2026 Site and Market Study Summary Form (xlsx, analyst-fills)
• Certification of no undue pressure or collusion (analyst-signed)

Things analysts miss in Illinois

• Capture rate denominator is the single most distinctive Illinois prescription — applying NCHMA's renter-only denominator is a compliance failure

Frequently asked questions

Who reviews LIHTC market studies in Illinois?

Illinois Housing Development Authority (IHDA) sets the market study requirements and reviews submissions for Illinois Low-Income Housing Tax Credit applications.

How current must a Illinois LIHTC market study be?

Annual cycle (2026 QAP)

Does Illinois follow NCHMA standards?

Illinois market studies follow the NCHMA Model Content Standards section structure — Illinois uses its own methodology with NCHMA acknowledgment. State requirements control where they differ from NCHMA..

Is there a capture-rate threshold in Illinois?

Capture rate guidance thresholds (NOT hard gates): ≤ 5% family / ≤ 7% elderly acceptable; Penetration rate ≤ 25% acceptable

What absorption/occupancy does Illinois expect?

Stabilization target 95%

Other states

See all 51 states →

This summary is for general reference and reflects Illinois Housing Development Authority (IHDA)'s published guidance as understood by StudyScribe; it is not legal or compliance advice. Always confirm requirements against the current QAP / market study guidelines before submission.