Low Income Housing Tax Credits & Energy Efficiency in Nevada, 2018

Nevada’s 2018 Qualified Allocation Plan (QAP) has the mandatory green requirements, which are separate for new construction and rehabilitation. Points are also awarded for smart design characteristics that include green and sustainable development practices.

Energy Efficiency Requirements – Acquisition/Rehabilitation

1) Energy Efficiency Standard. The project must have an overall energy efficiency level that is equivalent to the 2018 International Energy Conservation Code as determined by approved software used for the analysis must calculate heating, cooling, domestic hot water, lighting and appliance loads, consumption, and costs based on a description of the home’s design and construction features as well as local climate and energy cost data. When equipment or components are replaced during an acquisition / rehabilitation they should meet the Section 12, New Construction specifications for the item being replaced unless the energy analysis demonstrates it would not be cost-effective to do so.

2) Ventilation. The project must meet the ASHRAE Standard 62.2 Ventilation for Acceptable Indoor Air Quality.

3) Duct Leakage: Leakage to outside conditioned space of complete HVAC system 10 CFM or less/100 square feet of living space.

4) Pre-Rehabilitation Energy Analysis and Energy Audit. All projects must undergo a pre-rehabilitation energy analysis and energy audit. The pre-rehabilitation energy analysis will verify that planned improvements will meet Division requirements.

The information required to complete the pre-rehabilitation energy analysis is in Appendix C-2, Acquisition Rehabilitation Required Energy Analysis Form. The pre-construction energy analysis and energy audit must be completed immediately, upon notification of Tax Credit reservation. The pre-construction energy analysis and energy audit will give consideration to recent (less than five years old), appliance and mechanical systems installations. To complete the pre-construction energy analysis and energy audit, the Project Sponsor must contact the Division to request/schedule them. The Division will contract with a qualified residential energy analysis company to perform a pre-construction energy analysis of the proposed project and an energy audit of the existing dwellings.

The cost of the pre-construction energy audit will be $250.00 per unit with a minimum of one of each unique unit type in the project being subject to the energy audit. The cost of the energy analysis is $1,000.00, payable with the submission of the Appendix C-2 Acquisition Rehabilitation Required Energy Analysis Form. In addition, a minimum of 10% of the project will be inspected during the rehabilitation work and 15% of the project will be inspected and tested post-construction. The costs of the site visits and inspections will be $250.00 each. Travel expenses are in addition to these fees. The costs of the inspections, site visits and energy analysis fees will be paid separately (Listed in Section 21, Fees).

 The output from the pre-construction energy analysis must include the Division’s Summary of Recommendations for achieving the required efficiency level. Installation of the energy saving measures listed in the initial assessment report is mandatory for rehabilitation projects. A copy of the Division’s Summary of Recommendations with the recommended measures must be provided to the Division. Installation of the energy saving measures is the responsibility of the Applicant/Co-Applicants and will be monitored by the Division.

5) Interim Energy Analysis and Inspection during Project Rehabilitation. The Division will perform interim energy analysis and inspections of a selected sample of residential units during project construction. Sample testing will not be less than 15% of proposed units and will include samples of unit types (i.e., number of bedrooms) and individual buildings in the proposed project. The Applicant/Co-Applicant or Project Sponsor, as applicable, is required to provide the Division with reasonable access to perform interim energy analysis and inspections. The interim energy analysis and inspections will be performed: (1) after ceiling and wall insulation is installed and prior to installing drywall and, (2) after building duct systems are installed and prior to enclosing the duct work. If the proposed project consists of the rehabilitation of existing single-family homes, with existing drywall and duct work which will not be removed during rehabilitation, when the interim energy analysis and inspections will be performed will be determined by the Division on a case by case basis. The Division will conduct energy analysis and inspection within 10 days of receiving notice from the Applicant/Co-Applicant or Project Sponsor of the project readiness. The interim energy analysis and inspections performed by the Division or designate may include (individual testing requirements may vary by project):

a. Physical inspection of ceiling, wall and floor insulations.

b. Duct-Blaster tests to measure air leakage of duct systems.

6) Final Energy Analysis and Inspections. The Division will perform a final energy analysis of the project at the completion of project construction to determine whether or not the project achieves the energy efficiency standard and requirements specified in this section. A final energy analysis will be performed prior to project completion. The final energy analysis and inspections performed by the Division will include:

a. Energy analysis to determine the overall energy efficiency of the project and installation inspections of ceiling, wall and floor insulation;

b. HVAC leakage (if applicable) and building envelope tests to determine air leakage within residential units; and

c. Physical inspection of buildings and units to determine whether the energy efficiency measures identified in the pre-construction energy analysis have been installed.

7) Remediation. In cases where the Division’s post-construction energy analysis determines that the energy efficiency is less than the required energy efficiency standard prescribed in this section, the Project Sponsor will be provided an opportunity to make improvements and enhancements to achieve the energy efficiency standard. The improvements or enhancements shall be made within 90 days of receiving written notice that they are required to meet the energy efficiency standard prescribed in this section, unless the Project Sponsor has received a time extension in writing from the Division. The Project Sponsor will be required to pay any additional costs associated with the additional consultant time, travel and/or testing that is necessary.

Water Efficiency of Landscape Design

Five (5) points will be awarded to projects that have at least 75% desert and/or xeriscape landscaping. The Applicant/Co-Applicants must submit verification from an architect or landscape architect that the project satisfies the rating factor.

RATING FACTOR

75% desert and/or xeriscape landscaping – 5 points

MAXIMUM LANDSCAPING DESIGN POINTS – 5 points

ESTIMATION OF UTILITY ALLOWANCE

At the time of application, the Applicant/Co-Applicants must estimate the amount of utility allowance applicable to each unit, considering the square footage of the unit and the proposed source of energy in accordance with Treasury Regulations Section 1.42-10. The Applicant/Co-Applicant assumes the risk that these estimates are reasonable and supportive. At the time the project is placed in service, the Applicant/Co- Applicants must provide evidence that the utility allowance conforms to the requirements of the Code and Treasury Regulation. Failure to do so will result in forfeiture of the Tax Credits. The Applicant/Co-Applicant may provide a survey of actual utilities being paid in the area or with the Division staff approval, use the HUD Utility Model or an alternate method allowable per the Utility Allowance Regulations contained in the Federal Register, Volume 73, No. 146, July 29, 2008. Surveys must:

(1) have been conducted within 12 months of the application;

(2) sampled units must be located within a radius of 50 miles from the proposed project location;

(3) sampled units must be similar in size, within 10% based on unit square footage, to those in the project; (4) include a sample size of at least 10 units;

(5) the energy source must be the same as proposed for the project; and

(6) include the address and square footage of each unit surveyed. The Project Sponsor of Energy Star projects that have met the 86> REMS measure may request a HERS rated sample of the project. The sample must conform the Division’s Energy Requirements guidelines (i.e., 15% of the units must be tested). The Division will require an update to the testing every third year. The utility allowance will not apply to any Housing Choice Voucher and/or HOME funded units if not allowed by the local funding jurisdiction.

Contributed By: 
National Housing Trust

Other Items of Interest