The Low–Income Housing Tax Credit (LIHTC) is the federal government’s largest subsidy program for the production of affordable rental housing. The LIHTC is allocated in fixed amounts each year by state agencies, and provides an investment tax incentive for the production of rental housing with rents limited to percentages of HUD–specified Income Limits based on HUD–estimated area median family income. One inherent difficulty in the LIHTC not present in direct rental housing subsidy programs is that the subsidy amount is determined before the housing project begins operation, and there is no mechanism for ex–post adjustment to reflect, e.g., increasing operating cost, increasing tenant utility allowances (which reduce rent revenue) when energy costs spike relative to income, or declining area median income. Direct subsidy programs for rental housing, such as HUD’s Public Housing and Section 8 Housing Choice Voucher programs, adjust subsidy to changes in operating cost and tenant income either directly or indirectly (through connection to actual operating expenses or market rents). HUD uses a hold–harmless policy in setting its Income Limits for subsidy programs to accommodate this problem with the LIHTC, even though this tends to inflate the population eligible for HUD programs. Recent changes to HUD’s Income Limits methodology, however, show that the hold–harmless policy may not be enough to keep LIHTC projects operating. We discuss legislative policy options for ensuring LIHTC projects can continue to operate in these situations while maintaining affordability.