Kentucky Housing Corporation (KHC) is launching a Payment In Lieu of Taxes (PILOT) Program beginning January 1, 2027. This new initiative is designed to support the development of residential multifamily housing in Kentucky by reducing property tax burdens for eligible developments.
Through this program, KHC may acquire property for residential development, lease it to eligible developers, and enter into PILOT agreements with local governments as outlined under KRS 198A.200. This framework is intended to reduce overall development costs and help increase the availability of affordable housing statewide.
Eligible applicants include both for‑profit and nonprofit entities. Developments must:
- Be located in Kentucky
- Receive an award of 9% or 4% Low‑Income Housing Tax Credits
- Add at least 48 new units of multifamily housing
- Be subject to an extended use agreement in favor of KHC
Developers participating in the program must demonstrate site control, negotiate PILOT terms with all applicable local governments, and obtain the required written consents. KHC will acquire the real estate, enter into ground leases, remit PILOT payments to local taxing authorities, and ensure affordability through ground lease terms or deed restrictions. Compliance monitoring will occur periodically throughout the lease term.
KHC is currently drafting the program guidelines, policies, and procedures, which will be published once finalized to support developers and stakeholders in preparing their applications and project plans.
If you have any questions, email Terry Helton, director of Multifamily Housing, at [email protected].
