Developers will find tougher underwriting standards as well as a greater emphasis on project readiness when states reserve their low-income housing tax credits (LIHTCs) next year.

Several housing finance agencies are making these changes in their LIHTC programs in response to the tough economic conditions, according to a survey by AFFORDABLE HOUSING FINANCE. The study looked at changes to 2010 qualified allocation plans (QAPs) from across the country.

For example, the Wisconsin Housing and Economic Development Authority is looking at awarding points to developments with a debt-service coverage ratio between 1.20x and 1.30x to reward developments that are better able to match investor expectations in this market.

The readiness of projects to proceed is another big issue. The Pennsylvania Housing Finance Agency has added a developer's ability to proceed as a selection criteria in its 2010 draft QAP. The Alabama Housing Finance Authority plans to add to its QAP that prior-funded projects must have building foundation slabs in place in order to apply for more LIHTCs.

Readiness is also critical for many projects seeking Tax Credit Assistance Program (TCAP) and tax credit exchange funds. Delaware, Hawaii, New Mexico, Pennsylvania, and Texas are just a few of the states that cited readiness as a factor for receiving these funds.

Project feasibility is also being addressed in other ways. A few states are encouraging more units at the mid-range of incomes instead of the very lowest. For example, the Idaho Housing and Finance Association has been considering the possibility of eliminating points for 30 percent and 35 percent of the area median income (AMI), and Utah Housing Corp. officials have changed their rent targeting to encourage more units in the 40 percent and 45 percent AMI range, with some units higher and some lower.


View 2010 State-by-State LIHTC and Bond Guide in a larger map

CLICK ON A STATE'S NAME BELOW TO JUMP TO ITS PREVIEW

ALABAMA ALASKA ARIZONA ARKANSAS CALIFORNIA
COLORADO CONNECTICUT DELAWARE DISTRICT OF COLUMBIA FLORDIA
GEORGIA HAWAII IDAHO ILLINOIS INDIANA
IOWA KANSAS KENTUCKY LOUISIANA MAINE
MARYLAND MASSACHUSETTS MICHIGAN MINNESOTA MISSISSIPPI
MISSOURI MONTANA NEBRASKA NEVADA NEWHAMPSHIRE
NEW JERSEY NEW MEXICO NEW YORK NORTH CAROLINA NORTH DAKOTA
OHIO OKLAHOMA OREGON PENNSYLVANIA RHODE ISLAND
SOUTH CAROLINA SOUTH DAKOTA TENNESSEE TEXAS UTAH
VERMONT VIRGINIA WASHINGTON WEST VIRGINIA WISCONSIN
WYOMING PUERTO RICO

ALABAMA

2010 LIHTC authority (est.): $10 million
Application deadlines: TBD
One of the biggest changes expected in Alabama Housing Finance Authority's 2010 QAP, which will be final in December, is prior-funded projects must have building foundation slabs in place in order to apply for LIHTCs. The other major change is that points will no longer be awarded for additional subsidies.

ALASKA

2010 LIHTC authority (est.): $2.8 million
Application deadline: Dec. 4, 2009
All rating and award criteria are now objective with no review panels, according to officials at the Alaska Housing Finance Corp., who have made several key changes to the LIHTC program in 2010. The application process is also now entirely online.

ARIZONA

2010 LIHTC authority (est.): $15 million
Application deadline: Feb. 26, 2010 (tentative)
Developers will likely be required to attend an application workshop next year. That was one of the moves being considered by the Arizona Department of Housing as officials prepared a 2010 QAP. In 2009, 17 projects received reservations for $16.7 million in LIHTCs.

ARKANSAS

2010 LIHTC authority (est.): $6.3 million
Application deadline: Feb. 5. 2010
The assisted-living setaside will increase to $1.25 million, and the public housing agency set-aside will grow to $600,000 in Arkansas next year. The Arkansas Development Finance Authority (ADFA) is also calling on developments to have a minimum debt-service coverage ratio (DSCR) that is the greater of 1.10x or the minimum DSCR required by a lender or investor. The agency is also requiring developments to meet the greater of ADFA-required operating and replacement reserves or those of their lenders or investors.

CALIFORNIA

2010 LIHTC authority (est.): $77.2 million
Application deadlines: March 25, 2010, and July 6, 2010 (tentative)
Although a new QAP isn't expected until early next year, officials at the California Tax Credit Allocation Committee (CTCAC) say there may be revisions to two competitive tiebreakers. Some changes involving site amenities and a more robust service amenity requirement are also being considered. In addition, CTCAC is considering limiting the number of applications a sponsor can submit each round. The California Debt Limit Allocation Committee estimates a statewide private-activity tax-exempt bond cap of $3.3 billion next year. Historically, about 80 percent of the state ceiling has gone to multifamily and single-family housing. Of that set-aside, about two-thirds has typically been for multifamily.

COLORADO

2010 LIHTC authority (est.): $11.4 million
Application deadlines: March and August 2010
Developers will likely see a new minimum threshold requirement that calls on them to meet nationally recognized green building standards in 2010. Although next year's QAP was still being developed at press time, Colorado Housing and Finance Authority officials cited the green standards as one of the expected changes.

CONNECTICUT

2010 LIHTC authority (est.): $7.3 million
Application deadline: April 2010
In addition to its federal LIHTCs, Connecticut Housing Finance Authority projects that it will have $10 million in state tax credits in 2010.

DELAWARE

2010 LIHTC authority (est.): $2.7 million
Application deadline: March 26, 2010
Delaware State Housing Authority's 2010 QAP, which will be final Dec. 31, is expected to include a new set-aside for the creation of new housing, a new point category for an increase in Americans with Disabilities Act units, new general contractor bidding requirements, and an increase in developer fee limits.

DISTRICT OF COLUMBIA

2010 LIHTC authority (est.): $2.8 million
Application deadlines: TBD
The District of Columbia Department of Housing and Community Development had expected to award its $11.7 million in TCAP funds by the end of October. The department had yet to determine how much it would have in exchange funds, but hoped to make awards before Dec. 31 based on how difficult it is to obtain investment equity at a level in order to develop feasible projects.

FLORIDA

2010 LIHTC authority (est.): $38.5 million
Application deadlines: TBD
Florida Housing Finance Corp. received $101.1 million in TCAP funds, which it plans to award between Dec. 5 and Jan. 31. Florida Housing also has received $580 million in exchange funds. It expects to award $355 million by Jan. 31 and the remaining $225 million by April 30.

GEORGIA

2010 LIHTC authority (est.): $19 million
Application deadline: May 2010
Georgia Department of Community Affairs projects that it will have $19 million in state tax credits in 2010. The state also has $54 million in TCAP funds and plans to award 75 percent of those funds by January and the remaining 25 percent by December 2010.

HAWAII

2010 LIHTC authority (est.): $3 million
Application deadline: January 2010
Developers in Hawaii should be very familiar with the state's LIHTC program next year as no changes are in store for 2010, according to officials with the Hawaii Housing Finance and Development Corp.

IDAHO

2010 LIHTC authority (est.): $3.2 million
Application deadline: Feb. 12, 2010
Idaho Housing and Finance Association officials are considering eliminating points for 30 percent and 35 percent area median income units next year. The change was not final at press time.

ILLINOIS

2010 LIHTC authority (est.): $36 million
Application deadline: Around May 2010
The Illinois Housing Development Authority was considering several signifi cant changes for 2010, including implementing a mandatory preliminary application process and changing its program set-asides to be based on geographic location. A final QAP is expected in December.

INDIANA

2010 LIHTC authority (est.): $36 million
Application deadline: Dec. 18, 2009
Demand for 2009 LIHTC authority was almost twice as much what the Indiana Housing and Community Development Authority had on hand. The authority reserved $24.6 million for 37 projects with 2,563 LIHTC units. Officials say they don't anticipate any modifications to its 2009-2010 QAP next year.

IOWA

2010 LIHTC authority (est.): $27.8 million
Application deadline: March 15, 2010
The Iowa Finance Authority (IFA) is looking at establishing a 25 percent set-aside for properties meeting the requirements to be awarded state HOME funds next year. IFA is considering setting a per project cap of $2 million and a cap of $5 million in credits for a single developer. Officials also plan to update its underwriting standards, including revising the allowed debt-service coverage ratio to be between 1.20x and 1.50x. Projects will also be underwritten assuming no less than an 8 percent vacancy rate. Iowa will have about $6.9 million in annual authority and $20.9 million in 2010 disaster credits.

KANSAS

2010 LIHTC authority (est.): $6.4 million
Application deadlines: Feb. 5, 2010, and Aug. 6, 2010
The Kansas Housing Resources Corp. is considering the possibility of awarding points to owners who are willing to waive the qualified contract provisions that allow them to opt out of the tax credit program after 15 years.

KENTUCKY

2010 LIHTC authority (est.): $9 million
Application deadline: Open-window process
Instead of competitive rounds, Kentucky Housing Corp. is moving to an open-window process in 2010 so that projects that have financing in place can apply for LIHTCs when the project is truly ready to move forward.

LOUISIANA

2010 LIHTC authority (est.): $9.3 million
Application deadlines: TBD
The Louisiana Housing Finance Agency was set to receive about $39.4 million in TCAP funds and $114 million in tax credit exchange funds.

MAINE

2010 LIHTC authority (est.): $3 million
Application deadlines: TBD
MaineHousing has traditionally had an LIHTC application deadline in the fall for the next year's tax credits. However, because of the current equity pricing and for the market to have a chance to rebound, the agency is postponing the deadline until sometime in the spring. At press time, the agency was working on its draft QAP.

MARYLAND

2010 LIHTC authority (est.): $12 million
Application deadline: March 2010
According to Maryland Department of Housing and Community Development officials, its 2010 credits have already been reserved for projects in the development pipeline. The 2010 QAP also is expected to be revised and released toward the middle of next year.

MASSACHUSETTS

2010 LIHTC authority (est.): $14.9 million
Application deadlines: February and September 2010 (tentative)
Massachusetts Department of Housing and Community Development projects that it will have $10 million in state tax credits in 2010.

MICHIGAN

2010 LIHTC authority (est.): $21 million
Application deadlines: Nov. 2, 2009, and March 1, 2010
Michigan received approximately $63.8 million in TCAP funds, with approximately $21.5 million reserved by the end of October. Michigan State Housing Development Authority says it expects nearly all TCAP funding to be reserved for projects by mid-February. It also plans to award approximately $350 million in exchange funds, with nearly all of the funding expected to be awarded by the end of the first quarter of 2010.

MINNESOTA

2010 LIHTC authority (est.): $11 million
Application deadline: Oct. 1, 2009
Additional points are being awarded for rehab projects with existing project-based rental assistance. Priority is also being given to previously awarded tax credit developments that are ready to proceed to closing and project construction, and there is an accelerated selection process for developments that are ready to proceed, according to the Minnesota Housing Finance Agency, which forward-funds its credits.

MISSISSIPPI

2010 LIHTC authority (est.): $6.8 million
Application deadline: April 9, 2010
Mississippi Home Corp. plans to set the minimum score for all developments at 85 from 92 for new construction and 80 for rehabs, separate its Community Services and Amenities scoring component into three scoring categories, and add requirements for its community services category, according to its 2010 draft QAP.

MISSOURI

2010 LIHTC authority (est.): $13 million
Application deadline: Nov. 6, 2009
The Missouri Housing Development Commission has revised the developer fee maximum, established difficult development areas, and defined the green building programs that can be used under its sustainable housing priority category. Missouri also will have about $13 million in state credits in 2010.

MONTANA

2010 LIHTC authority (est.): $2.9 million
Application deadlines: Jan. 15, 2010, and May 7, 2010
In addition to the federally required 10 percent set-aside for projects sponsored by nonprofits, Montana provides a 20 percent set-aside for small developments of $200,000 or less in credits and a 20 percent set-aside for preservation projects. In the scoring competition, developers may lose points for past management weaknesses, threshold application omissions, or lack of responsiveness, according to the Montana Board of Housing.

NEBRASKA

2010 LIHTC authority (est.): $13.1 million
Application deadlines: Round one: Dec. 18, 2009 (threshold) and Jan. 29, 2010 (final); Round two: March 19, 2010 (threshold) and April 23, 2010 (final)
The Nebraska Investment Finance Authority will have about $4.1 million in annual LIHTCs and about $9 million in Midwestern disaster area credits in 2010.

NEVADA

2010 LIHTC authority (est.): $6 million
Application deadline: May 1, 2010
Acquisition and rehab projects with extended Sec. 8/ Housing Assistance Payment contracts may receive additional preference points next year. That was one of the moves under consideration by the Nevada Housing Division. A draft QAP was available this fall, but a final plan was not expected until mid-December.

NEW HAMPSHIRE

2010 LIHTC authority (est.): $2.8 million
Application deadline: March 5, 2010
New Hampshire Housing Finance Authority will go to one round of LIHTC reservations in 2010 to get the resources out the door more quickly. The authority also is boosting its maximum allocation to $800,000 from $600,000 due to resources not going as far as they used to.

NEW JERSEY

2010 LIHTC authority (est.): $18 million
Application deadlines: February and April 2010
New Jersey Housing & Mortgage Finance Agency (HMFA) reserved $39.1 million, including forward commitments, in 2009 authority for 24 projects with 1,552 LIHTC units; however, more than $67 million had been requested by developers. For 2010, HMFA doesn't expect significant changes to its QAP, which will be final in May, and will utilize the 2009 QAP for its February application cycle.

NEW MEXICO

2010 LIHTC authority (est.): $4.2 million
Application deadline: Feb. 1, 2010
In addition to the federally required 10 percent set-aside for projects sponsored by nonprofi ts, New Mexico Mortgage Finance Authority reserves 10 percent of its authority to projects with U.S. Department of Agriculture Rural Development funding. The 2010 QAP does not have any major changes. However, it was revised to reflect program changes to the treatment of federal grants and the 10-year rule that were made by recent legislation.

NEW YORK

2010 LIHTC authority (est.): $42 million ($17 million suballocated to the New York City Department of Housing Preservation and Development)
Application deadline: Feb. 10, 2010
The New York State Division of Housing and Community Renewal plans to add a scoring provision for historic building rehabs, include energy-efficiency standards as part of threshold requirements, and clarify green building and energy-efficiency standards in threshold eligibility and scoring provisions in its 2010 QAP, which will be final in January.

NORTH CAROLINA

2010 LIHTC authority (est.): $20 million
Application deadline: Jan. 15, 2010
Because the continued viability of some developers depends on receiving an allocation periodically, North Carolina Housing Finance Agency's draft 2010 QAP, which will be final in December, is expected to reduce the amount of 9 percent LIHTC awards per principal by making the $1.5 million maximum a “hard cap.” This means there would be no ability to receive more than $1.5 million to complete a last award; the alternative maximum is three awards.

NORTH DAKOTA

2010 LIHTC authority (est.): $2.5 million
Application deadline: Feb. 26, 2010
In 2009, the North Dakota Housing Finance Agency reserved about $3.2 million to seven developments with about 314 LIHTC units. Demand was more than twice the available supply, with developers seeking $6.8 million in credits. Officials said no major changes are expected to the 2010 QAP.

OHIO

2010 LIHTC authority (est.): $24 million
Application deadlines: Interested applicants must have submitted an Experience and Capacity Review application by Nov. 5, 2009, with housing proposals due March 18, 2010
The Ohio Housing Finance Agency plans to allocate $16 million of its authority in 2010. New for next year, the competitive evaluation of housing proposals will be based primarily on the overall achievement of the policy statements outlined in the QAP, with design, site, market and development team to continue to be part of that evaluation. Also, universal design of housing units will be based on several design principles, rather than the prescriptive method used in prior years.

OKLAHOMA

2010 LIHTC authority (est.): $8 million
Application deadline: May 21, 2010
The Oklahoma Housing Finance Agency is planning to hold only one allocation round in 2010. It previously held two.

OREGON

2010 LIHTC authority (est.): $8 million
Application deadline: March 2010
No major program changes are expected. Oregon Housing and Community Services issues its QAP for two-year periods, so the amended 2009 plan will remain in effect.

PENNSYLVANIA

2010 LIHTC authority (est.): $28.6 million
Application deadline: Feb. 26, 2010
A developer's ability to proceed on an LIHTC project has been added as selection criteria to Pennsylvania Housing Finance Agency's 2010 draft QAP, which is expected to be final Dec. 10.

RHODE ISLAND

2010 LIHTC authority (est.): $2.7 million
Application deadline: Oct. 2, 2009
Rhode Island Housing and Mortgage Finance Corp. will prioritize strategies to redevelop foreclosed or abandoned properties due to the shortage of decent and safe rental units, according to its 2010 QAP.

SOUTH CAROLINA

2010 LIHTC authority (est.): $8.5 million
Application deadlines: Tier I applications due Feb. 26, 2010; Tier II applications due June 7-11, 2010 (tentative)
South Carolina Housing Finance & Development Authority plans to add point preferences to developers who have closed permanent loans on previously funded developments, eliminate the historic set-aside and use historic character as a tiebreaker criteria, and change the rehab setaside from a percentage of credits to a dollar amount available ($1.275 million) in its 2010 QAP.

SOUTH DAKOTA

2010 LIHTC authority (est.): $2.5 million
Application deadline: Feb. 26, 2010
The South Dakota Housing Development Authority will be in the second year of a two-year allocation plan in 2010, so no changes are in store. The maximum LIHTC award is $494,000 per project and $617,500 per developer.

TENNESSEE

2010 LIHTC authority (est.): $14 million
Application deadline: March 19, 2010 (tentative)
Demand was high in Tennessee in 2009 for LIHTCs. The Tennessee Housing Development Agency reserved approximately $6 million in LIHTC authority for 11 projects with roughly 600 units, while approximately $50 million had been requested. The agency also is still in the process of awarding its exchange funds.

TEXAS

2010 LIHTC authority (est.): $66 million
Application deadlines: Jan. 8, 2010 (pre-application) and March 1, 2010 (application)
A number of potential changes were on the table as Texas Department of Housing and Community Affairs officials prepared their 2010 QAP. The proposals were in the areas of administrative and material deficiencies, experience certification, “intent to apply” for funding documents, and quantifiable community participation. Texas has also been discussing a way to prorate the credit amount when an inexperienced developer teams with an experienced developer. This is because the state has a cap on how much a developer can receive in a round. A final QAP is expected in December.

UTAH

2010 LIHTC authority (est.): $5.5 million
Application deadline: Feb. 1, 2010
There is a new emphasis on projects serving residents with mid-range incomes of around 45 percent of the area median income in 2010, according to the Utah Housing Corp.

VERMONT

2010 LIHTC authority (est.): $2.4 million
Application deadline: Rolling allocation process
In addition to its federal LIHTCs, Vermont Housing Finance Agency projects that it will have $400,000 for multifamily and $100,000 for homeownership in state tax credits.

VIRGINIA

2010 LIHTC authority (est.): $16.3 million
Application deadline: March 12, 2010
The Virginia Housing Development Authority has already reserved more than half of its 2010 credits in 2009, so it will only have approximately $9.5 million in authority available. The 2010 QAP, which will be final Dec. 2, is expected to have two new point categories to encourage geothermal heat pumps and solar electric systems.

WASHINGTON

2010 LIHTC authority (est.): $14.4 million
Application deadline: January 2010
A HOPE VI set-aside will be extended for three years, beginning in 2010, under a proposal being considered by the Washington State Housing Finance Commission.

WEST VIRGINIA

2010 LIHTC authority (est.): $3.9 million
Application deadlines: TBD
At press time, no details were available on West Virginia Housing Development Fund's plans for 2010 or a recap of 2009.

WISCONSIN

2010 LIHTC authority (est.): $43.6 million
Application deadline: Feb. 5, 2010
Wisconsin will have about $12.9 million in annual LIHTCs and $30.6 million in disaster credits in 2010. Developments with a debt-service coverage ratio between 1.20x and 1.30x are eligible for additional points under the 2010 LIHTC program in Wisconsin. This move is to reward developments that are able to better match investor expectations in the market, according to the Wisconsin Housing and Economic Development Authority.

WYOMING

2010 LIHTC authority (est.): $2.4 million
Application deadlines: TBD
Applicants in Wyoming have been ranked on primary and secondary criteria. Under the primary criteria, projects must score a minimum of 170 points out of a possible 504 points. Projects must score at least 55 points out of 271 points under the secondary criteria.

PUERTO RICO

2010 LIHTC authority (est.): $9.1 million
Application deadlines: TBD
Demand outstripped supply in Puerto Rico, with more than $50 million in 2009 LIHTC authority requested. As of Oct. 1, the Puerto Rico Housing Finance Authority had reserved $5.5 million of its 2009 credits for six projects with 937 units.