With much competition for 9% low-income housing tax credits (LIHTCs), more developers are turning to 4% LIHTCs to fund affordable housing–at the very time that competition for 4% LIHTCs (which are available to properties financed with tax-exempt private-activity bonds) is increasing. In this episode of Tax Credit Tuesday, Michael Novogradac, CPA, and Tabitha Jones, CPA, discuss the key differences between 4% LIHTC-financed transactions and developments financed by 9% LIHTCs. They also discuss various pitfalls that those new to the 4% LIHTC should be careful to avoid, including problems with bond arbitrage, Form 8709 and the 50% financed-by test. They wrap up with information on the 9% LIHTC that developers unaccustomed to that world should know.