Low Income Housing Tax Credits & Preservation in Alabama, 2019

The first of Alabama’s four housing priorities, listed in the Alabama 2019 QAP, is stated as “projects that add to or significantly upgrade the existing affordable housing stock.”

 

Point Incentives

Alabama’s 2019 QAP states that projects with a net score of less than 70 points (Points Gained less Points Lost) will not be considered for awards.

Rehabilitation Projects Only (Maximum of 8 Points)

2 points will be given for replacing all entry doors with insulated exterior doors and replacing all windows; thermal break insulated windows or extruded vinyl windows. Windows must be Energy Star rated.

2 points will be given for replacing all kitchen cabinets and countertops.

2 points will be given for replacing all plumbing fixtures.

2 points will be given for replacing all HVAC equipment

All points for rehabilitation construction items will be verified by the Capital Needs Assessment and Architect’s Certification submitted. Both documents must be certified by the project Architect.


Project Type (Maximum 9 Points)

A maximum of 8 points will be given for the rehabilitation of a project with an existing AHFA HOME loan that matures prior to or within the year covered by the applicable QAP. In order to be eligible for these points the project must meet one of the following criteria:

8 points – If the proposed project has paid 100% of the HOME loan (principal and interest).

6 points – If the proposed project has fully executed a commitment with AHFA for a fifteen (15) year extension of the project’s original HOME loan.

 

4 points will be given for rehabilitation of existing buildings that provides sufficient evidence that the project qualifies for the Alabama Historic Rehabilitation Tax Credit or Federal Historic Tax Credit.

 

1 point will be given for rehabilitation of existing multifamily residential rental housing, replacement of multifamily housing or replacement of previously existing multifamily housing. Previously existing multifamily housing is defined as multifamily housing that has been removed within the last 5 years or will be removed for new replacement housing on the same site.

Thresholds

AHFA will require the project to establish and maintain throughout the extended use period a minimum operating reserve. AHFA will require the project to establish and maintain throughout the extended use period a minimum replacement reserve account of a) $250 per unit annually for new construction projects for the elderly, b) $300 per unit annually for all other projects

For rehabilitation of projects not previously funded by AHFA, the minimum rehabilitation expenditure of $20,000 of hard construction costs per qualified housing credit unit may be allowed, but only if supported by a Capital Needs Assessment satisfactory to AHFA. For rehabilitation of projects previously funded by AHFA, the application must meet all threshold requirements set forth in this QAP, except that AHFA will require a minimum rehabilitation expenditure of $12,500 of hard construction costs per qualified housing credit unit.

The hard construction cost must be certified by a Capital Needs Assessment.

Additionally, AHFA outlines the following minimum building standards for attached rehabilitation of an existing building that must be used in designing Housing Credit (not applicable to projects with HOME funds) projects of twelve or more units:

·         Minimum apartment unit net area requirements:

Net area is measured from the interior finished face of the exterior wall to the interior finishes face of the common or tenant separation wall.

  •  1 bedroom unit: 600 s.f.
  •  2 bedroom unit: 775 s.f.
  •  3 bedroom unit: 1,000 s.f.

No units may contain a bedroom of less than 90 s.f.

Extended-Use

All projects must commit in writing to extend the Housing Credits low-income set-aside an additional five (5) years beyond the fifteen-year compliance period to twenty (20) years.

 

Contributed By: 
National Housing Trust

Other Items of Interest