“Why is this document so complicated?”

That's a question asked almost every time we finish drafting a qualified allocation plan (QAP), a question likely asked in other states as well.

The main reason for the complex selection processes is that housing finance agencies (HFAs) attempt to balance various housing policies, some of which conflict with each other. HFAs are, by and large, public entities designed to serve the housing needs of their states.

The low-income housing tax credit (LIHTC) is a successful program because an HFA can allocate credits to properties that best meet the particular housing needs of that state. Unfortunately, the need for affordable housing remains great in every state.

At the same time, the amount of public resources to address these needs has declined, which has led more people to look to the LIHTC for help.

In Ohio, we have tried several different approaches in our selection process, including different set-asides, scoring criteria (both subjective and objective) and application processes. Preferences are removed one year, then replaced back into the plan years later in a different form.

Generally we are pleased with the results, but housing needs change and we always strive to do better. The following are some of the issues that are debated during the development of the QAP every year:

  • Geographic Dispersion: We don’t want to spread the credits like peanut butter across the state without consideration of need and the markets, but at the same time, as a state agency, we have a mission to provide housing opportunities in every city and county. We also try to ensure the plan addresses needs, which can vary, in large urban areas, suburbs and mid-size cities, and rural areas.
  • Ratio of New-to-Existing: There are markets in Ohio that desperately need new quality affordable housing. However, the state has a large portfolio of existing affordable housing previously financed through LIHTCs or other federal programs. Although we could easily allocate all the credits in a year to help preserve existing housing stock, the trick is finding a way to fund some new as well as some old.
  • Populations Served: Families, seniors, persons with special needs and homeless individuals and families have all benefited from the Housing Credit program. Housing is tailored for the population served and any selection process must take these design differences into consideration. The needs are great for every population, and HFAs must make hard choices regarding how many projects to fund for each group.
  • Policy Impact: Over approximately the past 10 years we have tried to fund developments that have a greater impact in the communities and on the lives of residents. Green building standards, universal design, permanent supportive housing, linkages to healthcare and education, community redevelopment, and workforce housing are some of the factors we incentivize in our QAP. The difficulty is determining how to impact policy and still build cost-effective projects. Thus we have made adjustments and will continue to in our process to balance policy and costs. Ohio’s development community has demonstrated through many recent projects, that housing can have a significant impact on communities and residents and this reinforces why HFAs should encourage policy-driven developments in the QAPs.


Again these are just some of the issues that arise each year.

When these are layered with the requirements in Sec. 42(m) of the Internal Revenue Code, which details preferences and selection criteria for the LIHTC, and other applicable federal laws and policies, such as affirmatively furthering fair housing, it becomes apparent why it’s so difficult to design a QAP that appeases everyone.

Even though developing the process can be difficult, the program and the public/private partnerships it creates have worked very well for almost 30 years, and hundreds of thousands of people have a place to call home as a result. By understanding the diverse policy issues and housing needs facing a state, the development community can provide useful feedback and guidance that will help HFAs create QAPs that benefit everyone and continue the success of the program.

We also could use more housing credits, but that is a story for another column.


Sean Thomas is chief of staff of the Ohio Housing Finance Agency.

This article is the second installment of "The Great QAP Debate," a series exploring multiple perspectives about qualified allocation plans.