Low Income Housing Tax Credits & Preservation in South Dakota, 2018-2019

South Dakota’s 2018-2019 Qualified Allocation Plan (QAP) lists the construction and preservation of decent, safe, sanitary, and affordable units in the areas of greatest demonstrated need as its primary goal.

Point Incentive

South Dakota’s 2018-2019 Qualified Allocation Plan (QAP) awards points for preservation projects as follows:

  • A rehabilitation project that remodels existing affordable rental housing to like new rental units will receive 30 points
  • A rehabilitation project that uses buildings of historic nature will receive 20 points.
  • A rehabilitation project that remodels existing buildings and converts them to new rental units will receive 20 points.

Extended Use Commitment

 Although the required Affordability Period is 30 years, applicants that make a commitment to extend the Affordability Period an additional 10 years (to 40 years) will receive 30 points.

Basis Boost

 SDHDA may use up to 130 percent of a project’s eligible basis for purposes of calculating the amount of housing tax credits to be awarded to projects that meet one of the following criteria:

1.       Projects located in a Qualified Census Tract.

2.       Projects located in a Difficult Development Area.

3.    Projects that SDHDA has determined require an increase in housing tax credits to be financially feasible, in which projects will be treated as located in a Difficult Development Area. SDHDA will treat projects meeting one of the following criteria as falling within this category:

a.      Projects located within an area that is part of a Concerted Community Revitalization Plan.

b.      Service Enriched Housing.

c.       Projects located in Zone 3 as defined under Section V (A) Project Cost Limits.

d.      Rehabilitation projects that qualify for the National Historic Preservation Act of 1966 (NHPA) as amended (16 U.S.C. 470) and utilize Historic Housing Tax Credits.

Thresholds: South Dakota’s 2018-2019 QAP sets the threshold for a project to be considered substantial rehabilitation as costs of $10,000 per unit, or twenty percent of the original basis- whatever is greater. 

Contributed By: 
National Housing Trust

Other Items of Interest