Low-Income Housing Tax Credits & Cost Containment in Michigan, 2017

Michigan State Housing Development Authority’s 2017 Qualified Allocation Plan contains an array of cost containment requirements and incentives.

The MHDA 2017-2018 QAP establishes a maximum award per project of $1,500,000 and a maximum award per Principal (annual credit ceiling) of $3,000,000.

Limits are also set on the development fees. For all projects eligible for 9% LIHTC, the maximum development fee shall be the lesser of $1,500,000 or the sum of the following: a. 7.5% of acquisition costs b. 7.5% of project reserves c. 15% of all other development costs, excluding developer fee, developer overhead, and developer consulting fee.

All projects will be subject to a maximum Total Development Cost per unit that cannot be exceeded. This limit is calculated by converting the safe harbor maximum of the Vacant Uninhabitable Rehab or Adaptive/Re-use data set under the Cost Reasonableness Scoring, from a per-square-foot figure to a per unit maximum. The Maximum Total Development Cost per unit is determined by multiplying the Vacant Uninhabitable Rehab or Adaptive/Re-use safe harbor maximum by a conversion factor of 1,700. Applicants seeking more information or clarification on this calculation are encouraged to view the Cost Page 27 of 35 Reasonableness section of the Scoring Criteria where projects will be evaluated to determine whether they meet this test based on the information entered in the form.

Detailed cost-containment point incentives are included in the Scoring Criteria.

Contributed By: 
National Housing Trust

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