Better Using State and Local Resources to meet Oklahoma’s Housing Needs
In 2025 Housing Forward funded an assessment of the current state of affordable housing subsidies and related economic development incentives in the state by Urban Institute. The report was published on March 3, 2026 and is summarized below; view the full report online.
Oklahoma home prices for sale and rent have each increased substantially more rapidly than personal income over the past decade. Families with low incomes face particularly high barriers to finding affordable homes. None of the state’s large counties have enough affordable and available housing for these households; expanded investment in affordable housing is showing early signs of success, but gaps remain.
The Oklahoma Housing Finance Agency (OHFA) has taken the lead in implementing programs designed to expand housing affordability, including Low Income Housing Tax Credit (LIHTC) financing, and the state housing trust fund, the Oklahoma Homebuilder Program (OHP), and the Oklahoma Increased Housing Program. These programs are complemented by major new programs in Oklahoma City and Tulsa, each of which has recently expanded measures to supplement funding for affordable units.
Urban’s analysis provides an in-depth look at the challenges, strengths and opportunities for the state of Oklahoma to improve use of state and local resources for the development of affordable housing, as summarized below.
Challenges
Oklahoma’s real-estate market is relatively weak overall, limiting uptake of 4 percent LIHTC projects, and too many investments are made infeasible due to a lack of complementary infrastructure (water, sewer, electricity, gas, roads, sidewalks, etc.)
Limited take-up of 4 percent LIHTC program which, in implementation, is combined with private activity bonds. As a result, the state has lost out on about half a billion dollars on bond cap in recent years.
Disproportionate investment in rural areas where a minority of the state’s population lives.
Disproportionate share of LIHTC units located in areas with lower resident incomes including a substantial share located in neighborhoods where market-rate rents are lower than LIHTC rents, depriving people living in affordable units the ability to dwell in neighborhoods with high levels of opportunity.
Zoning challenges, inconsistent infrastructure landscape and large amounts of vacant, blighted and underused land. Focus on limiting total development costs may result in suboptimal investments.
Strengths
Interviewees emphasized that OHFA generally is an easy-to-work-with agency. The state has limited competition for affordable housing financing, and staff are friendly and support the goal of expanding housing access.
Projects rely on flexible gap funding to be successful and both OKC and Tulsa have recently launched new programs to provide these funds.
Recent OHFA LIHTC rule changes (???) could improve attracting out-of-state affordable housing developers.
Opportunities
Urban identified a set of approaches to help Oklahoma maximize its investments in affordable housing. These include:
Better align economic incentives with need.
Cities can advance LIHTC projects more rapidly by providing gap financing, pre-development financing, and the deferral of impact fees.
Cities should also leverage their investments in infrastructure and available land assets.
Align funding mechanisms for deeper affordability.
The state should consider reallocating its state tax credit program so that it can be used in association with the 9 percent LIHTC program, in addition to the 4 percent program—and further focus on the households with the greatest housing needs.
Align funding mechanisms with zoning and permitting reform to increase impact.
Cities should reduce barriers to the construction of multifamily units and apartments in more neighborhoods and reduce the permitting timeline for these projects.
Invest in infrastructure to move the needle.
The state should invest in expanded funding for infrastructure projects to make way for more housing; this could be done, for example, by leveraging unused private activity bonds or creating a new state infrastructure program. Such a program could focus on neighborhood infrastructure improvements in the form of streets and stormwater and sewer systems to prepare communities for new housing.
Remove regulatory blocks to putting land into productive use.
Cities and the state should collaborate to target infrastructure investments in communities where they can encourage affordable housing investment.
Regions should push for the opportunity to establish local land banks, which can provide a clearer pathway to putting land into productive use.
Encourage the ecosystem to invest in partnerships, capacity building, and growth of the developer pool.
Build up a local development ecosystem, particularly of nonprofit developers that have experience collaborating with private sector entities to build affordable housing. The state should take a more active role in developing the capacity of these groups and inviting in developers from out of state.
Expand access to affordable housing for those who need it most.
Alter allocation of LIHTC support to subsidize more affordable units in the neighborhoods where people want to live. The state should consider investing in a complementary grant program—or reallocate HSP funds—to support this initiative.
Definitions
Oklahoma Housing Finance Agency
The Oklahoma Housing Finance Agency (OHFA) is the state agency responsible for helping create and preserve affordable housing by administering federal and state funding programs and working with developers, lenders, and communities across Oklahoma.
Low Income Housing Tax Credit (LIHTC) Program
The LIHTC program is the primary tool used nationwide to finance affordable rental housing, allowing private developers to receive federal tax credits in exchange for setting aside apartments for households with lower incomes.
LIHTC: 9% Credit Program
The 9% LIHTC program provides larger tax credits to support the construction or major renovation of affordable housing and is highly competitive, typically funding projects that serve very low-income households and would not be financially feasible without this level of support.
LIHTC: 4% Credit Program
The 4% LIHTC program provides a smaller, more predictable tax credit and is typically paired with tax-exempt bonds to finance affordable housing, making it especially useful for preserving existing apartments or supporting larger-scale developments.
Oklahoma Housing Trust Fund
The Oklahoma Housing Trust Fund provides flexible state funding to support affordable housing development, rehabilitation, and homelessness prevention, often filling critical funding gaps that federal programs cannot cover.
Oklahoma Housing Stability Program
The Oklahoma Housing Stability Program (HSP) provides 0% interest construction loans for the new construction of single-family homes and for single and multifamily rental housing.
Oklahoma Homebuilder Program
The Oklahoma Homebuilder Program offers $100.7 million in available funds for the new construction of single-family homes for purchase.
Oklahoma Increased Housing Program
The Oklahoma Increased Housing Program offers $63.55 million in available funds for the new construction of single and multifamily rental homes.