This LIHTC Applications FAQ page is the method for submitting questions related to application requirements and scoring criteria for the 2021 competitive low income housing tax credit allocation round. Staff will make a good faith effort to post responses to questions within three business days of receipt. Note that staff may edit questions for clarity before posting them to this page. If you believe that your question was misrepresented and your question was not answered correctly, please submit a follow-up question or clarification of your question. Questions will not be accepted after 5PM, December 21, 2020.
Q1: If we're developing in phases with land contributed by the municipality, is a government commitment/development agreement okay to take down in phases, or do we need a full PSA for each phase?
A1: As long as the contribution clearly indicates all/both sites/areas, the same contribution can be used for each phase. Just make sure it is updated, if necessary, to meet the age requirement for commitments.
Q2: When exactly the service provider must start providing the committed services to tenants? is it at conversion or at certain percentage of occupancy?
A2: Services must be provided prior to 8609 issuance.
Q3: Is there a way to get nonprofit owner and developers points for the women and minority participation? If a non-profit owner has a board that is mostly minorities, would that count? What about the executive director?
A3: If a nonprofit development partner has a minority/women majority board make up, that too would qualify the project for points within the Other Scoring Points Available category. If a minority/woman executive director sat on the board, they could count towards this goal, but the board is considered the “owner” of the nonprofit, so it is the make up of that entity that we would be focused on. This would have to be documented on the appropriate form in the Application Package.
Q4: With regards to the Non-Smoking Properties scoring category, does non-smoking pertain to medicinal marijuana?
A4: The guidelines for the Smoke Free at Home program can be found on that program’s website: smokefreeathomenm.com, and do not include medical marijuana, however, a variety of federal funding sources prohibit the use of medicinal marijuana on properties. We recommend that projects check with their funding source(s) for more information on what applies to their specific project.
Q5: Are Roswell and Alamogordo considered no "active" LIHTC project areas?
A5: As of October 2020, neither Roswell nor Alamogordo have “active” LIHTC projects within them. In other words, projects developed in those areas are over 5 years old.
Q6: Do all portions of scattered site projects have to be within 0.5 mile away from NM designated MainStreet area to receive points?
A6: Yes, for scattered site projects, all of the buildings have to meet the criteria in order to be eligible for points, and there are no partial points available.
Q7: Does the entire project have to be certified as National Register of Historic Places? For example, if a new construction project has a National historic building as part of the project will this project qualify for points?
A7: If there is a National Historic Building as part of the project, it will qualify for points (as long as all documentation is provided with the application), regardless of whether there are additional units (rehab or new) involved or not.
Q8: We are considering a new construction project that involves 2 sites that are about 0.5 mile apart with one of the sites incorporating adaptive reuse. Would the project receive the adaptive reuse points?
A8: An existing FAQ answers part of the first question:
Q: Can you please confirm if the gross square footage amount in the denominator(sum of each buildings gross square feet) includes the gross square footage of the adaptive reuse space (numerator) in the formula for calculating the percentage of the adaptive reuse space? I am assuming it does not.
A: The “sum of each building’s gross square feet” (denominator) would be inclusive of the area that is being adapted. The “building’s gross square feet adapted” would be the amount of the overall gross square feet that will be adapted (numerator). This would give the “percentage of the building’s gross square footage that is being adapted/rehabilitated”.
For example, if there are 4 buildings a project, and the “sum of each building’s gross square feet” is 10,000, but only 1 of the buildings is being adapted for reuse and the others are new construction, then only 2,500 of the total gross square feet will be adapted, and therefore only 25% of the building’s gross square footage is adapted/rehabilitated.
For scoring under Criteria 21: Adaptive Reuse, at least 20% of the “building’s gross square footage” must be adapted.
By the rationale above, if it is a scattered site project, and only one of the buildings were going to be considered adaptive reuse, as long as that building’s square footage is at least 20% of the total buildings’ gross square footage, you would qualify for the adaptive reuse points.
Q9: For adaptive reuse what documentation do you need to prove the buildings were not originally constructed for residential use as the building’s architecture appears to be residential but were originally built as a ministry?
A9: If you can show the history of the building as being built to be a ministry, regardless of what it looks like on the outside now, we would be able to consider it adaptive reuse. (This could be photographic, deed, and/or a combination of other types evidence.) If the building was already converted to be residential multifamily living spaces, that would not count as adaptive reuse, as the new LIHTC project would not be the converting factor.
Q10: The QAP defines Rural as any area that is not Urban, but the checklist for the Locational Efficiency Criterion asks for an Area Classification Map. Is a map showing that the project is not within the Urban Areas defined in the Glossary sufficient?
A10: Yes. As long as the project is shown to not be in an Urban area (as defined by the glossary) it will show it is eligible for that sub category of the scoring category.
Q11: A mixed rehab and new construction project has existing one and two bedroom units, and we are looking to add new three-bedroom units. All the new three-bedroom units will have two bathrooms, but the existing two-bedroom units only have one bathroom. Based on the Households with Children Housing Priority category, would we need to add bathrooms to the existing two-bedroom units to satisfy the design requirements?
A11: No, as long as any added unit contributing to the two- or three-bedroom totals includes the two bathrooms as described in the QAP, there would not need to be any modification of the bathroom count of the existing units.
Q12: We are proposing two services that are currently unlisted in the QAP be provided in our new property serving Households with Children:
- On-site semi-annual eligibility screenings and/or application assistance for Medicaid.
- On-site quarterly technology training.
Can these count for one point each?
A12: Yes, the above listed services can each count for one point as additional enrichment services for Households with Children. They must be delivered on-site, at no charge to all residents, and the delivery of services must be documented in conformance with the LIHTC Compliance Manual.
Q13: For the scoring criteria 4, Sustaining Affordability, does an USDA-RD project with rental subsidy which is built pre-1987 and thus eligible to be taken out of the program, qualify under point 2, “eligible for prepayment and termination of the use agreement”? If so, what documentation is required to support this point allocation?
A13: Yes, the above scenario would qualify for 15 points via the second option: "Existing Projects that are currently subsidized and eligible for prepayment and termination of their use agreement.." In order to prove this, we would need a copy of the USDA use agreement showing that it expires and the property can be removed from the program. In addition, we would need evidence that the rental assistance will continue in order to include it in our underwriting.
Q14: What documentation do you require that a property is on the Federal Historic Register to receive points for criterion #16?
A14: There is an online database (https://www.nps.gov/subjects/nationalregister/database-research.htm) of all the places listed on the National Register of Historic Places. If the property is on there, a print out (or screenshot) of its listing on the website would suffice to prove it is included.
Q15: Regarding the "20 year requirement" what evidence do you require for proof if the building is a federal Historic building and it was built over 90 years ago?
A15: If the building is on the National Register of Historic Places, there will be documentation of the submission to the National Register. This is held on within the National Archives. This documentation may be in the form of dated photographs or other evidence of age and history.
Q16: Our tax credit investor has been underwriting on a 60% average income for an Urban Area project. We do however need points from the "income level of tenants" category. Am I reading this correctly - if we come in at say 59% on average, do we not score any points there?
A16: For any project located in an Urban Area that proposes to use the Average Income election, the Average Income must be 56% or lower to receive the minimum 12 points in the Income Level of Tenants scoring category.
Q17: Since the application deadline is 30 days sooner this year will you be allowing item #16h -the non-profit reviewed or audited financial statements to be from 2019 in order to meet scoring criterion #1?
A17: For the Non-Profit Scoring Criterion, we are looking for the most recent audited financials to substantiate net worth/assets.
Q18: Are resumes for enrichment service providers required at time of initial application for a senior project?
A18: No, resumes, while welcome at the initial application stage, are not required. By the Placed-in-Service and 8609 application, resumes are required.
Q19: Is the definition of an adjoining kitchen for a senior project a kitchen area that includes a stove, frig, sink, dishwasher, and cabinets? Can I substitute a microwave for a stove and not provide a dishwasher?
A19: A full kitchen is required for the common space kitchen area, but if there are extenuating circumstances or reasons for a modified kitchen, we will entertain design waiver requests at application.
Q20: What are the minimum qualifications that a qualified instructor must have to provide the gardening enrichment service for a senior project?
A20: There are no minimum qualifications set, however their resume should substantiate experience teaching gardening in some capacity.
Q21: Can covered open-air breezeway, stair, & terrace areas be included in the total building gross square footage for Efficient Use of Tax Credits scoring purposes?
A21: Potentially. If the space requires building a deck, then that floor space can be counted as part of the building’s Gross Square Footage. If there is a second level above, then the second level floor space can be counted. So terraces, which are on a second level could be counted. However, if the patio is not formally surfaced, uncovered, not dedicated to a specific unit, and didn’t require additional structural building, that floor space cannot be counted in the Building’s Gross Square Footage calculation. Similarly, breezeways that required some sort of structural construction to be able to stand on would be considered in the Building’s Gross Square Footage, but if it is basically a sidewalk with a cover, that would not count. If there is countable Gross Square Footage above the “sidewalk” the above, second level, square footage can be counted, but not the first level square footage. Exterior stairs can be counted, because there is required structural building.
Q22: For scoring criterion #2 what alternative forms of transportation that are not on tribal land may be acceptable to MFA and what sufficient documentation is to be provided that establishes the alternate form of transportation is acceptable to MFA?
A22: We are unaware of the different types of formal services that may be available throughout the state, but wanted to allow for the potential. We would be willing to consider as public a service that provides low/no cost, on-call organized, reliable transportation so that users, regardless of their residency in the Project, have access to services and employment. The documentation may vary by provider, but would include evidence of the stated objectives.
Q23: Would MFA consider privately provided rental subsidy to 20% of all project units for 5 pts? If yes, what documentation would you require and for how long?
A23: No, under the Sustaining Affordability scoring criterion, the points available are not available for private subsidies.
Q24: For scattered site projects that are selecting criterion #10 Households with Children Housing Priority, are applicants required to meet the New Construction and Rehabilitation Site Design and Development 2021 Mandatory Design Standards for each scattered site even if one of the sites contains 1 unit and another contains 4 units? Specifically, are the site that has a single family house and the site that has 4-units of new construction both required to have play areas for each age group 0-5/5-12/+12, community space, and a business center?
A24: The design requirements for the Households with Children Housing Priority selection criteria apply to the total unit count of the project, and per the QAP:
For Projects that combine rehabilitation and new construction:
• All newly constructed two and three or more bedroom Units must have two bathrooms, one of which must contain four pieces (bathtub, shower (or bathtub/shower combo), sink, and toilet) and the other must contain at least three pieces (sink, toilet and bathtub or shower)
• Two and three or more bedroom Units must be added until the percentages required for new construction Projects are met for the Project overall.
The entire project must meet the 2021 Mandatory Design Standards. The QAP addresses scattered site projects:
Generally, each site of a scattered-site Project must have a community space adequate for the provision of services and services must be delivered at each site in order for the Project to be eligible for points for Projects in which Units are reserved for Households with Special Housing Needs, Projects Reserved for Senior Housing or Projects in which 25% of all Units are reserved for Households with Children. However, if one of the project sites proposed for rehabilitation does not have adequate community space for the provision of services, services may be provided for residents at another project site so long as the following conditions are met: 1) the project sites are located within a quarter of a mile of each other and connected by an ADA compliant route, 2) the Application demonstrates, to the sole satisfaction of MFA, how the needs of persons with disabilities who do not have access to on-site services will be met and 3) sufficient community space for the provision of services is available for all residents of the Project.
Beyond that, waivers may be requested during the application process for design elements that are required, but not feasible or reasonable given circumstances.
The below FAQs are from prior years, but may answer questions still pertinent to the current QAP.
Q1: On the "Other Scoring Points Worksheet" criteria #1 states "...for which no federal assistance is existing." However, the Other Scoring Points Available scoring criterion in the QAP states, ..."for which no federal assistance is existing or anticipated." Two questions: (1) Which language governs? (2) If the latter, please define "anticipated."
A1: The QAP governs, and if the assistance is anticipated, the documentation we would be looking for would be that which is required for the scoring Criteria 4: Sustaining Affordability. In other words, “anticipated” assistance would mean that there may not be a contract in place, but vouchers need to have been awarded to the project.
From the QAP: Anticipated federal rental subsidies (CoC, RD, NAHASDA etc.) must be similarly documented as fully secured to the project itself, including the number of project-based vouchers allocated to the project, in order to score under this criterion.
For example, anticipated federal rental assistance contracts from housing authorities must show they are adequately secured through the presentation of specific items:
- A copy of the PHA administrative plan which describes the selection procedures for owner submission of PBV and for PHA selection of PBV proposals
- A copy of the published public notice of the PBV proposal selected
- If the proposal selected is for PHA-owned units, a copy of the HUD field office or HUD-approved independent entity’s determination that the PHA-owned units were appropriately selected
(If the proposal is selected based on a previous competitive award, MFA would require documentation that the proposal meets the criteria for selection without additional competition.)
Q2: Can you please confirm if the gross square footage amount in the denominator(sum of each buildings gross square feet) includes the gross square footage of the adaptive reuse space (numerator) in the formula for calculating the percentage of the adaptive reuse space? I am assuming it does not.
A2: The “sum of each building’s gross square feet” (denominator) would be inclusive of the area that is being adapted. The “building’s gross square feet adapted” would be the amount of the overall gross square feet that will be adapted (numerator). This would give the “percentage of the building’s gross square footage that is being adapted/rehabilitated”.
For example, if there are 4 buildings a project, and the “sum of each building’s gross square feet” is 10,000, but only 1 of the buildings is being adapted for reuse and the others are new construction, then only 2,500 of the total gross square feet will be adapted, and therefore only 25% of the building’s gross square footage is adapted/rehabilitated.
For scoring under Criteria 21: Adaptive Reuse, at least 20% of the “building’s gross square footage” must be adapted.
Q3: The QAP states governmental contributions and third party contributions must be evidenced by formal resolutions by the state, local governmental entity, or local tribal governmental entity or tribal council, or third party's Board of Directors or controlling entity. I cannot find any place where the QAP, or the application checklist, indicates that formal resolutions are required for deferred developer fees or other General Partner contributions. Can you confirm that formal resolutions are not required for leveraging points for deferred developer fees or other General Partner contributions?
A3: That is correct. For deferred developer fees or other GP contributions, we are looking for financing commitments documenting the amount deferred or contributed and any terms around that contribution. This should be included in the Application.
Q4: The appraised value of an acquisition property is $1M, exclusive of $200,000 of reserves that will be conveyed with the property. We are paying the seller the $1M appraised value for the property and no further remuneration. If the $200,000 of reserves (which exceeds the appraised value and is not included in the sale price) is contributed to the new project as a capital source, can this source be included in the point-scoring leveraging calculation?
A4: There are two ways that this could potentially be counted as “Leverage” per the scoring criteria.
MFA would require the following:
- An attorney opinion documenting that the reserves are not required to stay with the property and that they can be withdrawn by the seller prior to a sale;
- The accurate value of the reserve account in the form of a balance sheet; and
- An LOI between the buyer and the seller that the reserves will be transferred to the new partnership (documentation of the transfer would be required at Carryover).
OR The reserves could be fully disbursed to the partnership, and then a GP contribution could be made. In that case MFA would just need an LOI for the GP contribution at the application stage, with further documentation of the contribution required at Carryover.
Q5: Which MFA gap funding sources can be used for leverage? Previously, the National Housing Trust Fund (NHTF) grant was allowed to be counted as leverage. Can projects continue to count NHFT and can projects also count soft debt such as HOME funds as well?
A5: The National Housing Trust Fund is the only MFA managed source that can be counted as leverage. New Mexico’s HOME funds are fully amortizing, require a monthly payment, and while they can have 0% interest, they are still a hard debt source.
Q6: Can a housing department provide service coordination for their sponsored special needs project and meet threshold as an experienced service provider by committing to hiring a coordinator with at least three years of case management experience? Or do they have to partner with a social service agency to meet the requirement for an experiences service provider?
A6: If the question is referring to a service coordinator, the project (or housing department) may hire a separate individual to perform service coordination, but not service delivery. If this is the case, that individual must be hired at least 30 days prior to the first lease-up. Documentation to MFA must be provided to prove the hire took place 30 days ahead of lease-up and a resume showing experience must also be provided. Case Management services may only be provided by an experienced service provider, and an MOU would still be required between the project and the service delivery provider at application.
Q7: Will NAHASDA funding committed for operating through a HAP contract meet threshold for the following special needs requirement: 20 percent of total units reserved for households with special housing needs (see definition in Glossary). To be eligible for points under this option, at least 10 percent of the total units in the Project must be rent restricted at 30 percent of Area Median Income (AMI) or have permanent rental subsidy support with a project-based federal rental assistance contract that ensures residents do not pay rent in excess of 30 percent of their adjusted income.
A7: Yes. If the project commits 20% of the total units to households with special needs and the NAHASDA funding is in place for at least 10% of the total units, ensuring that residents did not pay more than 30% of their adjusted income in rent, that would satisfy Option A, and points would be eligible.
Q8: If a municipality does not typically issue statements determining blight, what alternative documentation will be acceptable for the Blighted Buildings and Brownfield Site Reuse criteria?
A8: The application must include a letter from the Local Government Building Division stating the proposed site meets the requirements of the QAP for blight. In the event that the Local Government will not issue a determination of blight, the Applicant must provide a letter from the Local Government stating the Local Government’s policy, a third party report indicating that the site meets the QAP’s definition of blight, and the Applicant must provide documentary support such as notices of violation of: (1) Local Government’s codes or regulations or, (2) the recorded covenants, conditions and restrictions for the property or, (3) a condemnation notice from public record. The application must also include photos of the blighted structure, neighborhood, or area. MFA reserves the right to determine whether or not the site meets these requirements.
Q9: Can a project receive the 3 points under “Other Scoring Points Available” for being “located in a town or municipality with a population less than 16,000 people pursuant to data published by the 2016 US Census Bureau, and the MFA-ordered Market Study supports need for the project,” if the town is an unincorporated Census Designated Place (CDP), with their own zip code?
A9: Yes, a Census Designated Place (CDP) may be considered in the Small Town scoring criteria, if the edge of the CDP is separated by at least five straight miles from the border of the next town or CDP.
Q10: A requirement criterion 1 is that net worth/net assets of the nonprofit must be substantiated by reviewed or audited financial statements. The nonprofit was established recently, and while they currently have the asset requirements of the QAP, they will not have the audited financials by the submission deadline. The financials have been reviewed by a CPA and all returns per IRS requirements have been filed.
A10: If a CPA has reviewed the nonprofit financials, that would suffice. As stated above, the requirement is to have the assets of the nonprofit substantiated by reviewed or audited financial statements. In this case they would be substantiated by a CPA review.
Q11: I am curious if there is any guidance on what the resolution (from government partner) should include under the leverage section. Is there an example of a resolution or can it be general as long as it names the specific contribution and the receiving entity?
A11: The resolution must state terms, specific contribution being made, and clearly indicates the receiving entity. If you would like to see a past, approved resolution, please feel free to make a public records request.
Q12: We would like to provide semi-annual CPR training as one of our enrichment services for a project prioritizing seniors. Would this approved as an MFA enrichment service and if so, for how many points? We did notice that this is a listed service for Households with Children Housing Priority.
A12: The semi-annual CPR training as described for a senior project is eligible for 1 point.
Q13: Our proposed 2019 9% LIHTC project, which is in a 2019 QCT and in an area of very low income, is considering incorporating a community service facility as defined by Internal Revenue Code §42(d)(4)(C). This facility would be on the same site as the housing units. Is the square footage of a community service facility included in the efficient use of tax credits calculation in the LIHTC 9% application?
A13: The amount of credit for the community service facility cannot be more than 25% of the eligible basis up to $15,000,000 plus 10% of the remaining eligible basis of the project. In addition to the eligible basis limitations, to be included in project basis:
- Project must be located in a QCT;
- A facility must be designed to serve primarily individuals with an income no higher than 60% of AMI;
- A comprehensive market study of the housing needs of low-income residents in the area must have been conducted prior to the awarding of the credits, and the need for the services should have been noted in the market study;
- The facility must be used to provide services that will improve the quality of life for community residents;
- The facility must be located on the same tract of land as one of the buildings of the qualified LIHTC project;
- Any fees charged for services must be affordable to individuals at or below the 60% income level.
- The square footage of any space meeting the above criteria is eligible to be included in the efficient use of tax credit calculation as long as there is no rent charged, which would designate the space as commercial.
Q14: For Leveraging points, the QAP says that construction permit fee waivers may count as a contribution provided applicant submits a signed letter from the local governmental entity confirming the legal basis for imposing the permit fee(s) and the amount of the permit fee(s) to be waived. Who exactly does this signed letter need to be from? Is it the jurisdiction's planning/building department, the City/County Manager or Elected Officials?
A14: The letter needs to be from the entity imposing (or forgiving) the fee.
Q15: Please clarify the process for PBV that are applied to the project through a Housing Authority utilizing the LIHTC process as a allowable competitive process per 24 CFR Part 983.51 (d) as public notice and sustaining affordability points.
A15: In order to be eligible for the Sustaining Affordability points, the application submission must include a copy of the Federal Rental Assistance Contract (if applicable) and a copy of Federally Approved Rent Schedule indicating Approved Rents and Utility Allowances documenting that the project will have a federal rental assistance contract covering at least 75% of the units. In absence of the RAC and rent schedule, we will consider equal documentation from the issuing agency to confirm that the vouchers have already been allocated to the project.
Q16: Our proposed project is in the unincorporated area of a county adjacent to a city which has had recent LIHTC awards. Although it is geographically near the City, it is not in its legal borders. Our unincorporated area has not had an active LIHTC award since 1996, and it was a 4% project. Scoring item #22 of the 2019 QAP says: (iv) The Project is to be located in a town or municipality with no "active: LIHTC Project. "Active" is defined as a town or municipality for which a LIHTC award was made in the last five (5) calendar years an the MFA-ordered Market Study supports need for the project (3 points): Is it correct to conclude that our project would be eligible to receive points under this category?
A16: The intent of the scoring criterion described under Section III.E.22.iv of the QAP was to provide new affordable housing opportunities in areas where those opportunities do not exist. “Municipalities” include cities, towns and villages. Although counties are not mentioned in the criterion, if a county, including both incorporated and unincorporated areas, does not have an “active” project, then a proposed project could be eligible for points. However, the project described above is within a county that has many “active” projects, and thus does not meet the intent of the scoring criterion of offering new affordable housing opportunities in areas where those opportunities do not exist and would not be eligible for points under scoring criterion III.E.22.iv.
Q17: The leverage requirement states that "the commitment from a private third party, federal government, state, local government entity or tribal council may be made in the form of cash, land and/or buildings. If our project is receiving a commitment of project-based vouchers (cash over time) can we monetize this financial commitment and have it count towards our leverage requirement? It appears to fit this broad definition.
A17: Neither vouchers nor tax abatements can be counted in the leverage category, since the category requires contributions toward the total development cost and these contributions reduce operating expense.
Q18: We would like to apply for National Housing Trust Fund money for permanent funding only (not to be used during construction). Will you verify that National Housing Trust Fund will qualify for leverage points, if only used as a permanent funding source.
A18: When using debt for leverage points, only soft debt contributions are eligible. Dependent on the structure of the National Housing Trust Fund dollars, they could count towards leverage as long as they remain part of the permanent financing of the project.
Q19: Must General Partner contributions be part of the construction funding or just as part of the permanent funding to be counted as contributions for leverage points?
A19: Contributions counted at leverage points must be part of permanent funding, those funds do not have to enter into the project during the construction period, but they may.
Q20: In reference to Scoring Criterion 11) Leveraging Resources, for purposes in calculating the percentage of deferred developer fee as a contribution, please confirm what can be included in the total development costs. For example, are developer fees and reserves to be included in total development costs and if so what portion of the total developer fee is allowed to be included paid or deferred or both?
A20: Reserves and the total approved developer fee are included in the Total Development Costs (as are all costs listed on Schedule A). However, the only portion of the developer fee that can be counted as leverage is the portion that is deferred and will be repaid within 15 years.
Q21: The General Partner in our project is a housing authority that does not meet the 1 million dollar asset test for maximum points under the nonprofit entity category. Can this housing authority, who is partnering with their local county on their project, use the County's balance sheet to meet the 1 million dollar asset test? Secondly, could this County government also provide guarantees for the project? If yes, what kind of documentation would MFA need to see for evidence of this arrangement?
A21: Balance sheets from the non-profit partners holding ownership interest are the only ones able to be utilized in the calculation of assets. If the county held ownership interest in the project, their balance sheet would be able to be utilized in the calculation. We would accept a guaranty from a county government if the County has an ownership interest in the project. At application, we would need CPA-reviewed or audited financial statements for the County’s most recent two fiscal years. Prior to closing, we would need evidence of the County’s ownership interest in the project, and at closing, an authorized signatory for the County would need to execute the guaranty document.
Q22: An eligible party is interested in donating land and building to qualify for "leveraging points". The value of the land and building has been established with a MAI appraisal. The full value of the asset is not needed for maximum leveraging points. Can a discounted sale price of the property be included in project Uses and the discounted value of the building included in eligible basis; and can the amount of the discount qualify as leveraging?
A22: Leverage points are awarded based on the value of the donation to the project. In the case of land and buildings, the maximum amount of value applicable towards leverage is the appraisal amount. Regarding eligible basis, includable costs are those outlined in IRS Section 42, Part III, Chapter 8 (Eligible Basis: Includable Costs), which excludes land costs, but includes building costs. All building costs includable in Eligible Basis must be proven as incurred or paid costs.
Q23: With respect to the Special Needs Housing Priority, does on demand curb to curb shuttle service (provided by the regional transit system), costing $1 each way, and on a fixed schedule Monday - Friday meet the free transportation services to support medical & social service needs 5 point category?
A23: No, the QAP states that bus passes are not sufficient to satisfy this scoring item. As the regional transit system charges a fee, and operates on a schedule, it would be considered a bus.
Q24: Tribal projects create unique underwriting requirements for the investor. One of those items is that the majority of Tribal projects are required (by statute) to charge no more than 30% of a tenant’s income for rent. The Tribally Designated Housing Entity (TDHE) covers the difference with the HAP contract. It does cover rental assistance (in that all tenants pay rents based on their incomes), but it does so by recognizing that the tenant rental collection will not likely be enough to cover expenses, so the TDHE will be covering those expenses. The investor prefers this method, because they underwrite the project at essentially breakeven operation every year. Will this type of HAP contract be acceptable to receive points under Sustaining Affordability?
A24: In the above scenario, a TDHE-issued HAP contract as described and required by statute would suffice to meet the criteria for Sustaining Affordability.
Q25: For Criterion 1, where a local non-profit’s net worth/net assets are below $250,000 (or below $1M), does the partnering entity with the net worth/net assets in excess of (or a combined net worth) $250k (or $1M) also have to be a nonprofit entity to qualify as a partnering entity to receive points?
A25: Nonprofits, NMHAs and TDHEs with net worth/net assets below $1,000,000 (or below $250,000) may partner with another entity to increase the General Partner’s combined net worth above this threshold. A for-profit partner entity’s reviewed financial statements may be used to achieve the net worth/net assets thresholds.
Q26: Projects which include the remediation and reuse of a brownfield site are eligible for points. Using the checklist, to qualify for these points, the applicant must provide a Phase II Environmental Site Assessment and a remediation budget. How recent must the Phase II Environmental Site Assessment be? Is a report that is several years old sufficient?
A26: The Phase II Environmental Site Assessment should be dated within 6 months of the application date.
Q27: In order for a project to be considered for the nonprofit set aside and points, the nonprofit must materially participate in the development and operation of the project throughout the compliance period. Which compliance period does this refer to? The IRS required compliance period or that which the applicant commits to as shown on the application? If the IRS required compliance period, is it 15 or 30 years?
A27: If a project is designated as part of the nonprofit set aside, the nonprofit must materially participate in the development and operation of the project throughout the Compliance Period as that term is defined in Section 42 of the IRS Code and the Qualified Allocation Plan (QAP). With regard to the scoring criterion, the QAP states that the Qualified Nonprofit Organization, NMHA, or TDHE must own at least 51% of the General Partner interest and be receiving a minimum of 10 percent of the developer fee as identified in the Project Application. The QAP does not provide for an expiration requirement that the Qualified Nonprofit Organization, NMHA, or TDHE own at least 51% of the General Partner interest.
Q28: If a nonprofit has audited financials for their fiscal year-end, will they be required to obtain accountant reviews of their calendar year-end financial statements?
A28: Fiscal year-end audited financials are sufficient.
Q29: If the nonprofit shows assets in excess of $1,000,000 do the other general partners have to provide audited or accountant-reviewed calendar year-end financials?
A29: No, if the fiscal year-end audited financials for the nonprofit show net assets in excess of $1,000,000, the for-profit GP does not need to provide reviewed financials.
Q30: In determining the gross square footage for a project we want to make sure that we are correctly calculating the areas. We have heated space, mechanical and storage space, and exterior decks that are enclosed by railing and “covered” by the deck above. Are all of these areas calculated as part of the Gross building square footage? Decks require construction activity to create the space for use. We have typically used the BOMA calculation method from the outside of the wall in.
A30: The exterior decks should not be included in the calculation.
Q31: When calculating the efficient use of credits, low income square footage means the sum of each Building’s Gross Square Feet, so if a project has structured parking (on a subterranean level) that is part of the project’s eligible basis, would this square footage be included in this calculation? It seems as though this should be treated the same as garages and should be included, although this definition in the QAP is silent as to parking.
A31: For the purpose of calculating efficient use of credits, garages and structured parking will be treated the same as surface parking. It should not be included in the Building’s Gross Square Feet when calculating efficient use of credits. In mixed use or mixed income projects, the cost of the parking should be included in eligible basis proportional to the space specifically designated for low income resident use and provided to residents at no charge.
Q32: The Efficient Use of Tax Credits scoring criterion has tax credits per low income unit and tax credits per low income square foot benchmarks. Must the tax credits requested be below these benchmarks to be eligible for points or can it be equal to and be eligible points?
A32: For Efficient Use of Tax Credits scoring the tax credits per low income unit and tax credits per low income square foot must be less than the benchmarks to be eligible for the points.
Q33: Can an applicant request less tax credits than the project is otherwise eligible for in order to meet the benchmarks and obtain points for Efficient Use of Tax Credits?
A33: Yes, an applicant can request less tax credits than the project is otherwise eligible for in order to meet the benchmarks and obtain points for Efficient Use of Tax Credits. As stated in the QAP, however, all projects will be underwritten to ensure financial feasibility and applications which fail to demonstrated financial feasibility may be rejected. Also, projects awarded points for Efficient Use of Credits may not apply for additional credits if projects cost increase or if other anticipated funding sources are not obtained.
Q34: Should commercial space square footage be included in the sum of each Building’s Gross Square Feet for the purpose of calculating the Efficient Use of Credits?
A34: As indicated on the Efficient Use of Credits Worksheet, commercial space should be excluded from the sum of each Building’s Gross Square Feet for the purpose of calculating the Efficient Use of Credits.
Q35: When a city is contributing property and waiving permit/utility connection fees how should this be reflected on schedule A and schedule A-1?
A35: If the property, for example, is worth $300k and the fee waivers are worth $20k, the cost of the building of $300k and the cost of the fees of $20k should be shown on the Schedule A and then the same amounts on the schedule A-1 as a source of funds with the city listed as the contributor.
Q36: Can the cost of donated property or waived fees be included in eligible basis?
A36: Since the property is donated and the fees are waived they do not represent actual costs to the project and cannot be included in eligible basis.
Q37: When calculating the maximum allowable developer fee should applicants use the total development cost including donated property and waived fees?
A37: No, since the donated property and waived fees are not actual costs, they will not be included in total development cost when calculating the maximum allowable developer fee.
Q38: We would like to request that Community Gardens be included as an additional Social Service scoring criteria for the Families with Children set aside. 12 to 15 8'x8' raised garden beds will be provided with instructional classes being provided during the growing season by a qualified educational entity.
A38: The delivery of at least four monthly gardening classes per year during the growing season by a qualified instructor is eligible for one point as an additional enrichment service for Families with Children or Seniors. In addition to the standard requirement of all enrichment services of being delivered on-site, at no charge to all residents, and actively linked to the Project, to be eligible for the additional point for this activity the Project must include gardening space of at least three square feet per unit for at least 50 percent of the units in the Project.
Q39: Regarding Projects Receiving a Local Contribution, what type of documentation is required if the resolution from the municipality does not state financing terms?
A39: If the resolution from the municipality does not state financing terms a copy of an executed development agreement or similar document must be included with the application.
Q40: The application checklist indicates that applications must include a “Municipality’s certification to MFA, or a copy thereof, that the project and contribution has been analyzed by the Governmental Entity and the contribution meets the requirements of the Affordable Housing Act and Rules Section 5.4.” How do we determine if this certification has been provided to MFA and is there a template for this certification?
A40: There is no template for this certification. Each certification will be unique and correspond to requirements enumerated in the specific municipality’s Affordable Housing Plan and Affordable Housing Ordinance. Please contact the MFA Community Liaison (505.843.6880) for questions regarding a municipality’s certification to MFA.
Q41: Would a finding of asbestos in an existing building make the project eligible for points under the Blighted Buildings and Brownfield Site Reuse criterion as a Brownfield site?
A41: A finding of asbestos, or lead-based paint, in an existing building would not make the project eligible for points under the Blighted Buildings and Brownfield Site Reuse criterion as a Brownfield site. The hazardous substance, pollutant, or contaminant must be attributable to the site (e.g. land) in order for the property to be considered a Brownfield site by MFA.
Q42: One of the buildings in the project we are working on contains a foot-print of 4,200 gross square feet. Because of its height, the building will accommodate 2 floors of 4,200 square feet. Can we count the 8,400 square feet as adapted space for the 20% adaptive reuse calculation.
A42: As long as you do not have to modify the building envelope to accommodate the 2nd floor, you can count the gross square footage of each floor.
Q43: PH PBRA commitments. Can you elaborate on requirements in the checklist for TDHEs? In the case of new construction projects, what evidence is acceptable that then Project is eligible to receive a HAP request or otherwise will have a HAP in place at the appropriate time (and where the LP is not formed at application)? Secondly, beyond having a Plan that spells out how the funds would be used for PBRA consistent with NAHASDA, there is no requirement for public notice or HUD review and determination that the TDHE owned units are selected.
A43: TDHE must provide two items to evidence the commitment to provide project based rental assistance contract: 1) a copy of the TDHE’s administrative plan indicating their intent to use their NAHASDA funding to provide project-based vouchers, and 2) a resolution from the tribal council or the TDHE indicating their intent to use their NAHASDA funding to provide project-based vouchers to the proposed project.
Q44: For the Leveraging Resources scoring criteria, are contributions in the form of cash which comprise 5% of the TCD, and therefore 5 points in scoring, would be eligible to be added to the 5 points for contributions of Native American Trust Land, for a total of 10 points. Is that correct?
A44: That is correct. A donation of Native American Trust Land automatically receives 5 points for the Leveraging Resources scoring criteria. Cash contributions made in addition to the donation of land are eligible for additional points. So, a project that receives a donation of Native American Trust Land and a cash contribution of 4.75% of total development cost would be eligible for 9 points (5 points for the donation of land plus 4 points for the cash contribution).
Q45: Can you please clarify the types of documentation that will satisfy the requirement to demonstrate exempt purpose to foster the production of affordable housing?
A45: The Articles of Incorporation should reference the production of affordable housing as one of the purposes of the organization.
Q46: Is there a template available for the certification that the nonprofit is not affiliated with, or controlled by a for-profit? If not can you please clarify the minimum required information, signatories and whether it needs to be notarized?
A46: The certification can be as simple as the following statement signed by an authorized representative: “I hereby certify that [your organizations name] is not affiliated with, or controlled by a for-profit entity.” The certification does not need to be notarized.
Q47: Is there a template for the certification that the nonprofit owns 51% of the General Partnership? If not can you please clarify the minimum required information to be contained in that certification, signatories and whether it needs to be notarized?
A47: The certification can be as simple as the following statement signed by an authorized representative of each General Partner: “I hereby certify that [the name of the nonprofit] will own not less than 51% of the General Partnership.” The certification does not need to be notarized.
Q48: I have several different plans for our community and I am unsure as to how to label them. One is a housing plan and one is a long term community plan. I am having a hard time deciphering the specific definition of a concerted community revitalization plan. Could you clarify what this means?
A48: “Concerted Community Revitalization Plan” means a Metropolitan Redevelopment Plan as defined in NMSA 1978 Section 3-60A-4 prepared and enacted by a local, county or tribal government at least six months prior to the application deadline. For Projects located on sovereign tribal lands, “Concerted Community Revitalization Plan” means a written plan similar in content and affect to a Metropolitan Redevelopment Plan as defined in NMSA 1978 Section 3-60A-4, prepared and enacted by a tribal government at least six months prior to the application deadline, which identifies barriers to community vitality and promotes specific concerted revitalization activities within an area having distinct geographic boundaries.
Q49: Are manager's units included in total units for the purposes of determining 20% set aside and other applicable set asides based on total units?
A49: Units set aside for fulltime Project employees (property managers, maintenance staff, etc) require MFA approval as “exempt units” and are removed from the applicable fraction but remain in eligible basis. Once the unit has been approved as a “reasonably required unit” for the project, the unit will be considered exempt and will not be included for any of the project set aside requirements.
Q50: Should requests for approval of additional enrichment services be requested in writing through the portal or via letter to MFA or both?
A50: Either method of submitting a request for approval of alternate services will be accepted. Often the description of proposed services can be lengthy and it is appropriate to send request for approval via email. If, however, the description if fairly short it is appropriate to send the request via the portal.
Q51: For sustaining affordability points, please confirm that "a copy of the public notice of the PBV proposal selected" only applies to projects which are allocated PBVs through an RFP process administered by a Housing Authority. Said another way, if a project is awarded a competitive source of financing from a federal, state or local source and subsequently the local Housing Authority commits PBVs to the project, a public notice of the PBV proposal selected is not applicable.
A51: 24 CFR Part 983.51(d) requires public notice of the PBV proposal selected regardless of the selection process used. Please see PIH Notice 2017-21 (HA) – a HUD approval letter is required for utilizing PBVs in sustaining affordability points.
Q52: We are working on a project within a jurisdiction that has a Downtown Master Plan. The project site is within 1/2 mile of the designated Main Street district as identified in the plan, however, the district is not listed as a designated New Mexico MainStreet area. Can we provide a copy of the plan and radius map to qualify for the points under criterion 17?
A52: In order for a proposed project to be eligible for points for being in proximity to a designated New Mexico MainStreet area, the area must be designated as either a Certified New Mexico MainStreet Program or a Start-Up New Mexico MainStreet Program by New Mexico MainStreet.
Q53: The municipality that we are working with intends to make a contribution to our project as an economic development activity pursuant to the Local Economic Development Act [5-10-1 to 5-10-13 NMSA1978] (LEDA). What items are required for the project to be eligible points under project selection criteria “Project Receiving a Local Contributions” for this contribution?
A53: The application must include all of the items on the checklist for the scoring criterion with one exception. In lieu of the municipality's certification to MFA that the project and contribution has been analyzed by the Governmental Entity and the contribution meets the requirements of the Affordable Housing Act and Rules Section 5.4., the application will need to include a certification from the state of New Mexico Economic Development Department stating that the contributions proposed by the municipality are lawful under LEDA.
Q1: Are market studies required for those projects that are re-syndicating with a 100% occupancy?
A1: Yes, market studies are required for any project submitting an application for tax credits, whether re-syndications or new allocations.
Q2: Is DocuSign allowed due to the current pandemic, in place of blue ink in-person signing?
A2: Unfortunately, for the 2021 applications, we still require original (blue ink) signatures on documents as indicated in the application materials. We are working on DocuSign capabilities for future applications. However, for non-MFA generated documents (e.g. zoning letters, etc.) DocuSigned or scanned signatures are acceptable.
Q3: Can you give the names of some companies that can do the Market Study?
A3: We cannot give names of eligible market study companies, however any firm that is able to meet the requirements for the Market Study, as described in the Market Study Parameters and sign the Professional Certification document would be eligible to produce the Market Study. MFA reserves the right to commission an additional Market Study (at the applicant’s expense) if the one provided with the application does not meet the parameters to our satisfaction.
Q4: Given the travel restrictions in place for New Mexico due to the COVID-19 pandemic, is there still a requirement for the market study to perform a site visit?
A4: No, MFA will waive the requirement for a site visit to be performed (a current requirement within the Market Study Parameters), until it is safe to travel to, and within, the state.
Q5: Item 16k requires: “If 501(c)3; 2015 NM Charitable Organization Registration Statement (Local non-profits only). To the best of my knowledge, this hasn’t been required in New Mexico for a number of years now. Will you please take a look at this and let me know what, exactly, we should be providing and where we should get it.
A5: Every non-profit operating in NM has to register with the State. This can be done through https://secure.nmag.gov/coros/. We are looking for proof of this registration status. The “2015” in the checklist item is a typo.
Q6: Given restrictions due to the COVID-19 pandemic, might there be some latitude (a couple of days if needed) on application hard copy being received by MFA by the January 15, 2021 deadline? Electronic copy would still be received by MFA by January 15, 2021.
A6: MFA recognizes the current conditions related to mail and delivery delays, so as long as the hard copy is sent prior to the deadline of January 15th, and a receipt is uploaded with the electronic copy showing that it was sent via USPS, FedEx, UPS, or other carrier service ahead of the January 15th deadline and showing a requested delivery date no later than January 15th, we will accept the hard copy if it physically arrives late. There will be no leeway for hand deliveries to the MFA office or the electronic submissions, which must be fully uploaded to our file sharing site: https://mfa.internal.housingnm.org/FileTransferHD by 4 pm on January 15th, 2021, as stated in the QAP.
Q7: If we are doing a combined rehab and new construction project, we know we will have to choose a track (rehab or new construction based on the higher number of units), but for schedule A, should we put all the new construction and rehab costs together?
A7: No, if the project is a combined rehab and new construction project, we would like to see the rehab costs and new construction costs broken out on a single Schedule A, with the total development costs encompassing all costs. A new Excel file with an extra column for this purpose has been added to the application package.
Q8: Will you accept the Intent to Submit submission electronically?
A8: The submission of the Intent to Submit prompts us to set up an electronic file on our File Sharing site for the project. Until we have that system set up, we have no formal way to accept electronic submissions. For that reason, we require the Intent to Submit to be submitted as a hard copy to MFA.
Q9: The evidence of site control for our project will be a written governmental agreement providing for phased residential and commercial development of 12 acres, including a senior LIHTC submission for this round that will be on approx. 2.5 acres of the 12. Will this agreement suffice for purposes of meeting MFA's site control requirement? Does the 2.5 acres have to be fully platted at time of initial application? Will a title search of the entire 12 acres be acceptable? Should we provide a legal description for the 12 or 2.5 acres?
A9: As long as the agreement describes the 2.5 acres dedicated to that project, and it is clear that this project is the only project eligible for that 2.5 acres, that should suffice for site control. The full 12 acres title search is fine, and it does not need to be platted yet. We would want the 2.5 acres legal description to be used.
Q10: Can we receive a waiver to allow a delay of the title report requirement due to COVID-19 preventing title companies from timely reporting?
A10: If there is documented evidence that attempts have been made to obtain the item, and that due to COVID there is a delay or current issue obtaining the application item, we will be able to grant an extension to the receipt of the application item to Carryover, in the event of an award. This extension will only be granted if there is documentation of attempt and a narrative requesting the extension of the requirement.
Q11: The evidence of site control for our project is a written governmental Purchase, Sale and Development Agreement providing for 6 phases of residential and commercial development. Exhibit B of the agreement shows a development timeline and a map with the location of each phase. Phase 3 on the map is the senior housing component for which we are submitting the LIHTC application this round. The Purchase, Sale and Development Agreement refers to Exhibit B for the required developments on the larger site but doesn’t identify specifically in the body of the agreement that Phase 3 is restricted to senior housing. Will this map showing the location of the senior housing be sufficient evidence for site control purposes since it shows the approximate area dedicated to our project? We will have a legal description for the project based upon the architect's site plan included in the lender's design package submitted in the LIHTC app.
A11: It is difficult to provide a definitive answer without reviewing the full Governmental Development Agreement, but because this is a government-owned parcel, as long as the Governmental Development Agreement identifies a 2.5 acre parcel being available for the Project, the map shows the location of the parcel, and the Agreement clearly identifies the transfer of the parcel to the project, we would accept the Agreement as proof of site control.
Q12: Compliance Affidavits for Individuals that are employees of Non-Profit organizations – Unless an individual has a separate interest in a federally subsidized housing project, the Schedules H and Compliance Affidavits for each entity involved in the development cover all possible non-compliance issues and an individual Schedule H for non-profit staff is unnecessary. The Compliance Affidavits are designed to address For Profit organizations. As a not-for-profit organization, individual employees or executive staff do not benefit from any gain realized by development activities. Therefore, we do not believe board members, executive staff, or other principals in the organization should be required to sign and have notarized compliance affidavits as individuals. Can we provide a statement to this effect (member of a non-profit and no interest in federally subsidized project) in lieu of a Schedule H and Affidavit for our executive director?
A12: We understand that the non-profit general partner will be completing Schedule H and the Compliance Affidavit and both will be signed by a person authorized to sign on the general partner’s behalf. We do not require that non-profit board members or executive staff submit separate Schedule H’s or Compliance Affidavits, unless they have separate interest in a Low Income Housing Tax Credit or other federally financed multifamily housing project in the United States.
Q13: Our team works in other states with LIHTC programs and is grateful that the state housing agencies made numerous modifications to their application processes to address safety issues during COVID-19. Our team is requesting that the MFA team consider some of the modifications below due to the severe nature of the pandemic and the current travel restrictions from Governor Lujan Grisham.
Here are suggested modifications:
1) Not requiring a notary for any of the application forms
2) Considering e-signatures for application documents
3) Considering an electronic submission versus a hard copy submission of the full application.
We know this is challenging for staff but we also think it is dangerous for LIHTC applicants to be moving around New Mexico engaging numerous people in-person in order to submit under the current requirements.
A13: Due to COVID-19, MFA will accept electronic signatures completed through a third party verified e-signature process (e.g. DocuSign, Adobe Sign, etc.) on any of the required documents, however if the document requires notarization, that will still be required. NM does not currently allow digital notaries, but there is an option for a notary to witness a signature virtually via audio-video technology. For further guidance, please see the Executive Order of the Governor of the State of New Mexico at https://www.governor.state.nm.us/wp-content/uploads/2020/06/Executive-Order-2020-039.pdf and instructions from the New Mexico Secretary of State at https://www.sos.state.nm.us/notary-and-apostille/notary-commissions/. Please be sure to adhere to the regulations applicable to the state the signatory is physically in when they sign the document (for example, if the signatory is in Colorado, the rules and allowances regarding virtual and electronic notaries in Colorado apply, and MFA will recognize whatever that state’s position on notaries may be). Again, if the document is signed in New Mexico, the notary page will still have to have a hard copy signature, but the signatory may utilize an e-signature.
We will still be requiring hard copy applications, so the documents with e-signatures must be printed and submitted in the hard copy application. If for any reason the e-signature does not satisfy MFA’s documentation requirements, there will be a 5-day correction period to submit a hard signature. As we mentioned in a previous FAQ, MFA recognizes the current conditions related to mail and delivery delays, so as long as the hard copy is sent prior to the deadline of January 15th, and a receipt is uploaded with the electronic copy showing that it was sent via USPS, FedEx, UPS, or other carrier service ahead of the January 15th deadline and showing a requested delivery date no later than January 15th, we will accept the hard copy if it physically arrives late. There will be no leeway for hand deliveries to the MFA office or the electronic submissions, which must be fully uploaded to our file sharing site: https://mfa.internal.housingnm.org/FileTransferHD by 4 pm on January 15th, 2021, as stated in the QAP.
The below FAQs are from prior years, but may answer questions still pertinent to the current QAP.
Q1: Is a CNA required at application for adaptive reuse projects?
A1: From the QAP, “for rehabilitation and adaptive reuse Projects, a CNA will be required subsequent to the initial Application (prior to the issuance of the letter of determination for tax-exempt bond finance Projects and at carryover application for all other Projects) and this assessment will be reviewed by MFA for completeness, consistency with the Application and compliance with the Design Standards.”
Q2: In order to meet Scoring Criterion 12, can you please clarify which signatures in the application need to be originals as the QAP is not entirely clear when it states that "All Application documents that require signatures must be included and bear the original signatures in blue ink from all general partners." Are original signatures needed just for the General Partners or are all original signatures required from all parties even though they are not General Partners? For example, in prior years, I have lost points for this criteria when the Architect's Certification was not an original signature?
A2: All signatures on MFA application documents should be original, inclusive of signatures from architects, contractors, management agents, etc. As a rule of thumb, if the document came from the MFA application package and requires a signature, the signature should be original and in blue ink. The Architect’s Certification is an MFA form, so it should have an original signature.
Q3: In regards to the Related Party Affidavit, does the Architect have to complete this form also or do just the general partners complete the form and state if any identity of interests exist with any members of the development team?
A3: Per the 2021 QAP, Section III. C. 4., “All members of the development team (i.e. Developer, Project Owner, architect, general contractor, etc.) are required to sign an affidavit affirming they have no related party relationships; or, that all related party relationships have been properly disclosed. The form of this affidavit can be found on MFA’s website. Additionally, a visual diagram of the relationship of the related parties must be submitted, if applicable.”
Q4: We received our letter from the local zoning official but it is not signed in blue ink. Per the QAP instructions under complete application, all signatures from general partners or on forms are required to be in blue ink. Will a letter from an outside source not signed in blue ink be acceptable?
A4: As the local zoning official letter is not an MFA form or document, black ink is acceptable.
Q5: Will you confirm a previous FAQ which said that only federal financing needs to be listed on Schedule H? Also, would you confirm that Board members need to sign compliance affidavits, but they do not need to sign a Schedule H unless they have interests in restricted properties that do not appear on the nonprofit’s Schedule H. Assuming board members do not have interests in restricted properties other than nonprofit’s, only the executive director needs to sign schedule H on behalf of the organization. The executive director also needs to sign Schedule H.
A5: Schedule H only applies to federally financed projects. If a board member does not have interest in a restricted property other than the nonprofit’s, they do not need to fill out a separate schedule H. Only the executive director needs to sign the nonprofit’s schedule H.
Q6: The application checklist requires location and linkages map in addition to color photos of the project site. What is a linkages map? What photos are needed? Overhead or Ground level?
A6: Please see “Site Information” items 3 through 5 under Part B: MFA 2021 Submission Instructions for Preliminary Architectural Documentation for Multifamily Housing of the 2021 Design Standards. This section goes into detail as to the expectations for the linkages map and photos.
Q7: If one of our partners who is providing financial guarantees does not want their financials to be available to the public can they send them to MFA under separate cover? Or is there another way to handle this partner providing financial statements while protecting this information from the public?
A7: There are very few instances where personal financial statements would be required, in the event of a personal guarantee of an MFA loan, or in the case where the general partner or managing member was an individual, and not an entity. Documents will be subject to the New Mexico Inspection of Public Records Act (IPRA). Every effort will be made by MFA to maintain the confidentiality of the above information, however; if a Request for Public Records is received MFA must comply.
Q8: This question is in regards to the Related Party Affidavit. In a project where the same entity is serving as a Developer and Managing General Partner of the Owner entity (but neither the Developer nor Owner has any relationship with the builder/general contractor, design professionals, or subcontractors) would this relationship between the Developer and Owner be considered an Identity of Interest that needs to be disclosed on the form? Also please confirm that in the scenario described above, the normal 6% cap on builder profit is applicable.
A8: If there is no relationship between the Developer or Owner and the other team members, MFA would not require an Identity of Interest disclosure. In this scenario, there also would not be a change to the builder profit cap.
Q9: Can you confirm that when a project has 100% owner-paid utilities, no utility allowance documentation is required?
A9: If there are no utilities to be paid by the tenant, no utility allowance documentation would be required.
Q10: For the threshold site control requirement, will it be sufficient for a non-profit sponsor/applicant that owns the proposed LIHTC project thru an LLC subsidiary to provide the deed under the LLC name and LLC organizational docs showing that the non-profit is the sole member to satisfy this requirement?
A10: Yes, proof that the nonprofit is the sole member of the LLC that is listed on the deed to the project would be sufficient to prove threshold site control. However, if awarded, the project or project owner must submit evidence that they have taken ownership of the land or depreciable real property or has executed a lease for the land (and buildings if applicable) with a term extending at least three years beyond that of any agreed upon Affordability Period. Generally, site control must be in the name of the Project Owner, if formed, or the General Partner or a managing member of the General Partner. The QAP anticipates that in many cases the legal entity that will ultimately be the Project Owner (the Limited Partnership) will not have been formed at the time that the Initial Application is submitted. The QAP, therefore, allows for site control in the name of a General Partner or managing member of a General Partner.
Q11: Does an Identity of Interest exist and will the developer fee be decreased when a non-profit owner/sponsor/developer of the property to be submitted for the LIHTC round holds ownership thru an LLC subsidiary, of which they are the sole member?
A11: The above scenario does present an Identity of Interest, and must be reported, however that designation does not automatically result in a decreased developer fee unless another relationship exists. For example when an identity of interest exists between the developer and the owner, or between the seller and purchaser in an acquisition, a reduction in developer fee may apply. In these types of cases, the Identity of Interest relationship will be evaluated on a case-by-case basis as noted in the QAP.
Q12: a) For Schedule H and Compliance Affidavit submittals, is it correct that only the President or CEO of the General Partner (s) is required to submit two Schedule Hs/Affidavits? One as General Partner, CEO or President and one as an individual. This is assuming that the CEO and President is also not a Principal in another entity with other federally financing. 2) Is Types of Financing to be listed on Schedule H federal financing only?
A12: a) The President or CEO of the General Partner(s) is no longer automatically required to submit two Schedule Hs/Affidavits. Only one Schedule H is required for an entity providing that none of the Principals of that entity have any interests in federally subsidized Projects other than those listed on Schedule H. If any Principal has an interest in a federally subsidized Project, they must complete a Schedule H disclosing those interests. All Principal must provide a Compliance Affidavit. b) Only federal financing needs to be listed on Schedule H.
Q13: If the LLLP has already been established, should the initial tax credit application be under the LLLP or non-profit GP of the LLLP?
A13: The initial tax credit application should be under the LLLP if the LLLP has already been established.
Q14: How long are zoning letters good for?
A14: Zoning letters should be dated within 6 months of the Application Deadline so your zoning letter should be acceptable provided it meets the requirements listed in the QAP.
Q15: On a project that consists of SRO, efficiency, 1-2-3 bedroom units with more than one income/rent tier, do the income/rent tiers have to be distributed throughout, including the SRO units? Can we maintain all the SRO units at the 30% AMI?
A15: Income/rent tiers must be distributed throughout all unit types proportionally. Projects may not maintain all SRO units at the 30% AMI tier.
Q16: I see from the application checklist that the contractor resume does not have to be submitted until carryover. Schedule D requires a contractor signature. Do I need to have a contractor signature on Schedule D at the time of application even though the resume is not required?
A16: If a contractor has not been selected, then the resume is not required and schedule D does not need to be signed by a contractor for the initial application.
Q17: If the LLLP has not been established what entity should be listed as the legal name of the project owner on Schedule J?
A17: The legal name should be listed as TBD if the LLLP has not been established and the signatories should sign as General Partner(s).
Q18: Can you clarify if non-profit board members need to sign a compliance affidavit and complete a schedule H and also that only executive director needs to complete a compliance affidavit and schedule H on behalf of the non-profit?
A18: Board members need to sign compliance affidavits but they do not need to sign a Schedule H unless they have interests in restricted properties that do not appear on the non-profit’s Schedule H. Assuming board members do not have interests in restricted properties other than non-profit’s, only the executive director needs to sign schedule H on behalf of the organization. The executive director also needs to sign Schedule H.
Q19: Schedule I has an information requirement of "On-site Manager". What is MFA's definition of "On-site Manager"? Does that mean a manager that resides on the premises, or does it mean the manager has an office on the premises? Please clarify...
A19: For Schedule I, on-site manager means a manager that resides at the property.
Q20: Can you please direct me to the drawing package submittal requirements for the standard LIHTC application submittals?
A20: Please see Part B: MFA Submission Instructions for Preliminary Architectural Documentation for Multifamily Housing Applications within the Mandatory Design Standards for Multifamily Housing (Item 16 of the Application.)
Q21: Can the site plan and landscaping plan be combined on one sheet?
A21: The site plan and landscaping plan may be combined on one sheet provided you can get all of the information on one sheet and still have it clearly legible.
Q22: What alternate document would be acceptable to show lack of encumbrances on Native American Trust Land?
A22: Lack on encumbrances on Native American Trust Land should be shown with a certified or uncertified Title Status Report from the Bureau of Indian Affairs.
Q23: For the purpose of the Compliance Affidavit, are Principals considered all board members and executive staff?
A23: For the purpose of the Compliance Affidavit, Principals are considered all board members and executive staff of a General Partner as well as any person or entity receiving a portion of the developer fee. Each of these individuals should complete and provide a Compliance Affidavit. Please see the definition of Principal in the glossary section of the QAP for more clarification.
Q24: Square foot calculations: The Gross Square Feet (as defined in the QAP) is used for the calculation of the Efficient Use of Tax Credits. a) How should schedule B and F be reconciled with the Application Page 3 and the Efficient Use of Tax Credits EUC, if schedule B and F are interior dimensions? b) Relatedly, how is schedule B reconciled with other Schedule F and the application if dimensions are interior dimensions of units (heated sq ft in floor plan) and not exterior and not inclusive of common hallways, etc.
A24: Schedule F is based on Gross Square Feet of the Units. Schedule F should reconcile with square feet of Low Income Units and Market Rate Units listed on page 3 of the application. The sum of Each Building's Gross Square Feet listed on the Efficient Use of Credits Worksheet must reconcile with the total square feet (minus commercial space) indicated on page 3 of the application form. Since Schedule B is the only form that uses net square feet (interior dimensions) it will not reconcile with the other forms.
Q25: You've clarified that Board members that do not have interests in other restricted properties do not have to submit separate Schedule H's. Are you referring to personal interests in other restricted properties? Would Board members sitting on multiple Boards be required to submit Schedule H's for properties owned by the secondary entity?
A25: A Board member that serves on multiple Boards has an interest in the properties owned by each of the organizations, so the Schedule H for that Board member should list all of the properties owned by each of the organizations.
Q26: Does or can MFA cc the Letter to the local government official to that official's administrator or deputy staff if that information is provided in the application?
A26: MFA will only provide notice to the local government official.