The Tax Credit Committee and the Tennessee Housing Development Agency Board of Directors voted to approve the 2023 QAP, as well as changes to the 2022 Bond Program Description. Changes of note include:  

  • Re-institute and increase an annual $1.8 million per development cap for nine percent credits. The cap was paused during COVID and was previously at $1.5 million; and  
  • Increase total development cost limits for four percent credits by 15 percent.  

THDA received an additional allocation of $100 million in bond cap and plans to distribute it along the following parameters in a third round:  

  • First priority will be given to previously submitted initial applications that demonstrated an inability to meet the 50 percent test; and 
  • Any leftover funding will go towards 2022 round one or two applicants that were deemed eligible but didn’t receive an award because there wasn’t enough funding. 

The third round will open on September 29 and applications are due by October 7.  

THDA also previewed changes for the 2023 Bond Program description, which will be presented to the board at its November 15 meeting.  

  • The East and West grand divisions will get increased funding, potentially decreasing what was available in the Central grand division.  
  • In round one, awards will be allocated based on the following priorities:  
  1. Bundled RD submission; 
  1. Rehab of existing multifamily affordable housing that is income/rent restricted; 
  1. Rehab of existing multifamily affordable housing that is not income/rent restricted; 
  1. Rehab of public housing; and 
  1. New Construction of public housing. 
  • The order of priorities will likely be flipped in the second round.  
  • Extend the firm commitment deadline from 90 days to December 15 of each year. 
  • Impose energy efficiency for all unit requirements for new construction bond deals but maintain the exemption for preservation deals.  
  • Make the following clarifications: 
  1. Allocations of MTBA cannot be transferred between developments; 
  1. Calculation of developer fee; 
  1. Definition of other sources of funds; and 
  1. Timing and limits for Supplemental Requests. 

THDA is expecting to receive a large bundled rural submission, likely as a special request. The board packet states that THDA is “considering reviving ‘Special Requests.’” THDA Executive Director Ralph Perrey expressed his desire to support that transaction. Perrey also stated that, THDA may not be able to count on receiving all of the state’s volume cap in 2023 due to requests from industrial development.  

The Tennessee Developers Council will continue to advocate that as much volume cap as possible be dedicated to multifamily housing and will submit comments on the draft bond program description when it becomes available.