UPDATE: Michigan’s Governor Gary Heidel approved the 2013-2014 Qualified Allocation Plan (QAP) for the allocation of Low-Income Housing Tax Credits. For the 2013 cycle, applications will be received in two funding rounds. The application deadline for the first funding round is Wednesday, August 15, 2012 and the application deadline for the second funding round is Friday, February 15, 2013.

One of the primary objectives as identified by MSHDA and stakeholders was the need for simplification within the QAP and as such, the QAP for 2013-2014 is approximately 20 percent shorter than previous years. Some specific areas that were revised include:

  • MSHDA is proposing to have only one allocation round, as opposed to two in previous years but will introduce the policy gradually: MSHDA will hold two funding rounds for 2013 credit and will shift to one funding round for 2014 credits;
  • MSHDA proposes implementing a pre-application stage where applicants will be required to submit evidence of land control, to order a market study, to provide development team information, to indicate which Category they intend to apply under, and to submit their project self-score. Those applications that are found acceptable, based on MSHDA’s review of these items, would be invited to apply for the competitive funding round. The agency hopes this will lead to more competitive projects competing in the funding round and also hopes this help applicants save money on the additional costs of putting together an application;
  • The agency has proposed to remove the 180-day LIHTC Commitment deadline (and 90-day follow-up) deadline;
  • MSHDA proposes to remove the previous requirement that all 9% LIHTC family deals reserve 10% of their units for permanent supportive housing (PSH). The agency does recognize that there is still a need for supportive housing so will continue to make Project-Based Vouchers (PBVs) available to projects that agree to reserve a certain portion of the units for permanent supportive housing;
  • MSHDA is proposing a requirement that sponsors have net liquid assets greater than or equal to 3% of the proposed permanent mortgages on all of the projects the sponsor currently has in the development process (i.e. following award and through placement in service date);
  • Because equity markets have rebounded in the last few years, MSHDA is revisiting 30% basis boost requirements and proposes that the types of projects to qualify should be: PSH projects, Central Cities projects, Historic Rehab projects, projects scoring the full 10 green points (15% boost), projects setting aside at least 10% of their units for 30% AMI tenants, projects qualifying for the rural set-aside, and Strategic Initiative Category projects;
  • To make the allocation process more competitive, the agency proposes to provide points to owners based on the number of projects they have successfully completed and that are performing financially according to their lender and investor obligations;
  • The agency proposes to create A Strategic Investment Category, totaling up to 10% of the total credit ceiling, which will be awarded to applications that demonstrate transformative neighborhood revitalization, and/or unique financial funding and leveraging opportunities, and/or the promotion of significant job growth in proximity to such housing;
  • MSHDA proposes implementing a cost containment scoring model which awards points to projects by project-type — Preservation, New Construction, or Adaptive Reuse/Historic Rehab — based on its total development cost per-square-foot. To receive points, a project’s costs are compared to cost data on the last 5 years of LIHTC projects. Projects with costs less than the benchmark may receive positive points, while those with costs greater than the benchmark may receive negative points;
  • The draft 2013-2014 QAP includes revised criteria for location-based scoring methodology and some additional and/or modified criteria were created to help address some of the issues that projects located in rural areas face and to create more of a competitive balance in the allocation process;
  • MSHDA suggests decreasing the percentage of acquisition costs that can be counted toward the allowable developer fee for acquisition-rehab deals from 15 percent to 10 percent;
  • The agency proposes adding a scoring criteria that makes points available to developments that are located within 1/10 of a mile of public transportation or that have the ability to make some other form of regularly scheduled transportation available to the tenants;
  • In an attempt to stimulate viable partnerships between for-profits and nonprofits, different levels of points have been added to allow for additional points if a nonprofit has an ownership interest above 20%, all the way up to 50% or greater;
  • Removal of the Federal, state and local source financing scoring criteria.

Click here to view the Final 2013-2014 QAP.
Click here to view the staff report for the 2013-2014 QAP.