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LIHTC Applications FAQ

This LIHTC Applications FAQ page is the method for submitting questions related to application requirements and scoring criteria for the current 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. The deadline to submit a question is listed on the calendar for the current round.

Question 1:

Section III.E.2 – Access to Public Transportation

Are non-tribal projects served by an “on call” (e.g. “dial-a-ride”) transportation service generally eligible to receive the 2 points awarded for projects located within a 0.5-mile walk distance of commuter bus or commuter rail stops?

MFA Response:

No.  Projects served by an “on call” transportation service are not generally eligible to receive points for “public transportation”.  “Dial-a-ride” is a paratransit service limited to qualified individuals.  2022 QAP Section III.E.2 states that “Public Transportation must be established and provided on a fixed route with scheduled service”.  An exception to this is the “on-call” service found in some Tribal and Rural communities, where the entire community (with no exceptions) have access to the service.  Applicants who wish to find out whether a specific alternative form of transportation is acceptable to MFA, should submit an FAQ describing the location of the project (e.g. town or census designated place) and the transportation that is that town’s only “public transportation” for consideration.

Question 2:

Section III.E.4 – Sustaining Affordability

Would 811 units awarded through MFA count for points?

MFA’s Response:

In order to qualify for points, a federal rental assistance contract must be fully secured to the Project itself. MFA anticipates but has not yet received a Cooperative Agreement with HUD.  If MFA enters into a Cooperative Agreement with HUD and the Project proposed in the Application qualifies for 811 units (i.e. meets all of the requirements in the Cooperative Agreement) and MFA still has sufficient 811 units to award (i.e. higher scoring projects have not exhausted the available 811 vouchers) the Project could qualify for six points for “Projects that have or will have a federal rental assistance contract covering at least 20% of all Units”.

Question 3:

Section III.E.14 – QCT/Concerted Community Revitalization Plan

Are points awarded only for Metropolitan Redevelopment Area Plans (“MRA Plan”) enacted through the Metropolitan Redevelopment Code program established in Article 60A, or are points awarded for all plans that meet the definition of a “metropolitan redevelopment plan” as established in Article 60A?

MFA’s Response:

The 2022 QAP defines a Concerted Community Revitalization Plan (“CCRP”) as a “metropolitan redevelopment plan as defined in NMSA 1978 Section 3-60A-4 prepared and enacted by a local, county or tribal government prior to the Application Deadline”.  The definition is part of the Metropolitan Redevelopment Code NMSA 1978 Section 3-60A, which describes the provisions of the Redevelopment Law that must be complied with before a local government may prepare a metropolitan redevelopment plan. Thus, for Projects not located on sovereign tribal lands, the plan submitted must be enacted in accordance with the Metropolitan Redevelopment Code established in Article 60A. 

Since projects located on sovereign tribal lands are not subject to New Mexico Statutes, the 2022 QAP permits them to submit “a written plan similar in content and affect to a metropolitan redevelopment plan as defined in NMSA 1978 Section 3-60A-4”.

In either case, the development of the proposed Project must contribute to the CCRP by engaging in a housing activity promoted in the CCRP.

Question 4:

Section III.E.21(vi) – Women and/or Minority participation

Would Service-Disabled Veteran status count for points?

MFA’s Response:

No, a service-disabled veteran who is not a woman or a member of a minority would not qualify for points under 2022 QAP Section III.E.21.vi, which is for participation of “women and/or minorities”. 

For purposes of scoring item 21(vi), a minority is a racial or ethnic group, members of which have been subjected to prejudice or cultural bias by virtue of belonging to the group, without regard to individual qualities.  Such groups include, but are not limited to:

  1. African Americans.  Persons having origins in any of the African racial groups of Africa.
  2. Hispanic Americans.  All persons of Mexican, Puerto Rican, Cuban, South or Central American, Caribbean and other Spanish or Portuguese culture or origin.
  3. Native Americans.  Persons having origins in any of the original peoples of North America or the Hawaiian Islands, in particular, American Indians, Eskimos, Aleuts and Native Hawaiians.
  4. Asian-Pacific Americans.  Persons having origins in Japan, China, the Philippines, Vietnam, Korea, Samoa, Guam, the U.S. Trust Territories of the Pacific, Northern Marianas, Laos, Cambodia, Taiwan and India.

The minority or female individual(s) must serve as either:

  1. The General Partner, manager or managing member of the Ownership Entity or Responsible Owner, must have at least a 50% ownership interest in the Ownership Entity or Responsible Owner or
  2. Must have at least 50% ownership interest in the participating business to qualify for the points. These businesses include any members of the development team (i.e. contractor, management company, consultant(s), architect, attorney and accountant, etc.)

Question 5:

What documentation is required in in the MFA application to verify the property is a Brownfield?

MFA Response:

The 2022 QAP defines a Brownfield as “land where the development, redevelopment or reuse may be complicated by presence of hazardous substance, pollutant or contaminant including petroleum.  Brownfield sites require a remediation plan based on a Phase II Environmental Site Assessment.”

The Attachments Checklist in Tab 1a of the Application sets forth the following documents to be submitted for projects claiming points for a Brownfield site:

  • Color Photos of the Site and Existing Buildings (both exterior and interior) if applicable
  • Phase II Environmental Site Assessment
  • Remediation Budget and Plan detailing proposed work

Question 6:

Pertaining to 'Federal Assistance' term within 21. Other Scoring Points Available (i) a. Deep Affordability: An existing development has PBV's for all its units, are the PBV's considered 'Federal Assistance'?

MFA Response:

Yes. Project Based Vouchers (“PBV”) are a form of federal assistance.

Question 7:

If a nonprofit serves as the General Partner, manager or managing member of the Ownership Entity or Responsible Owner, and has a board with more than 50% minority or women, will they receive points in this section?

MFA Response:

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 MFA would be focused on. This would have to be documented on the appropriate form in the Application Package.

Question 1:

In reading through the market study requirements, we are unclear on how you want to see demand calculated. Can you send me a sample of a demand section from another study?

Also, in terms of demand under “additional market rate requirements”, part of this reads as if it follows HUD NET demand qualifications, but not all. Also, one bullet says not to consider income targets, while another says to consider 80-120%. Can you clarify or send an example?

Is there specific state you modeled your guidelines after? Much of it reads like Michigan’s guidelines, but they have a very odd demand calculation process.

Any insight you can offer would be helpful.

MFA’s Response:

MFA does not have a required template for the market analyst to calculate demand. The specific calculation is left to the market analyst based upon the requirements listed in the Market Study Parameters.  Section I of the 2022 Market Study Parameters directs the market analyst to NCHMA’s Demand and Capture Rate Methodology and provide links to NHCMA’s white papers Recommended Practices for Determining Demand and Demand and Capture Rate Methodologies. 

The “additional market rate requirements” section provides requirements for projects proposing market rate units, similar to those that the “additional senior requirements” provides for projects proposing senior housing. This section provides a list of factors the market analyst should consider when determining demand for market rate units. The last bullet in the “additional market rate requirements” section directs the market analyst to determine a “reasonable target market” for the market rate units at the project. It is up to the analyst to determine what target market is reasonable but does not dictate the income levels of the target market, which may vary depending upon the specific location of the project.

Each state prepares its own guidelines, so it would not be helpful to apply guidelines from another state to MFA’s Market Study Parameters. Additionally, we would not be able to supply information from a previously submitted Market Study without a formal Request for Public Information made through the Inspection of Public Records page of our website.  Please name the project and the document you are requesting in your request for faster processing.

Question 2:

Last year MFA waived the inspection requirement for market studies, is this still the case or are inspections required?

MFA’s Response:

Due to the pandemic, MFA will extend the waiver of the inspection requirement for market studies for the 2022 QAP.

Question 3:

Section III.E – “In order to avoid a concentration of tax credit awards in a particular year in any municipality, county or market area, MFA reserves the right, in its sole discretion and as part of its subsequent processing, to eliminate a lower scoring Project which is located in the same municipality, county or market area as a higher scoring Project provided the lower scoring Project is ‘similar’ in terms of construction type and/or resident population served.”

When applying this criterion, does MFA strictly adhere to municipal boundaries (e.g. city limits)?  Or is it better for us to think of this rule in terms of the Primary Market Area (“PMA”) as defined in the market study?  For example, could two similar projects be awarded within Albuquerque city limit so long as they’re not capturing tenants from the same PMA?

MFA Response:

2022 QAP Section III.E should not be interpreted to mean that MFA will never award two projects in the same municipality in the same year.  For example, in 2020 two acquisition/rehabilitation and two new construction projects were awarded in Albuquerque.  MFA will use its reasonable discretion to avoid oversaturation of a market in a given year based upon the location of the projects and type of projects proposed.  While MFA would review the PMA defined in the market study, its discretion is not limited to the PMA boundaries in the market study.

Question 4:

I was reading over the 2022 QAP and was hoping to get some clarification on the applicable threshold requirements for serving a targeted population, specifically Households with Children.

Page 37 of the QAP discusses Households with Children Housing Priority and it outlines the requirements for a service coordinator as well as the enrichment services. Is a service coordinator and are the enrichment services a requirement for 4% projects or are these specific to 9% projects only?

MFA Response:

Page 22 of the 2022 QAP requires the following as a mandatory criterion for 4% non-competitive tax credits:

“Serve a targeted population (Households with Special Housing Needs, Households with Children, or Projects Reserved for Seniors) and meet the applicable threshold requirements OR meet the requirements for the Underserved Populations set-aside, as described in Section III.D.”

The Households with Children Housing Priority found beginning on page 37 includes both threshold requirements and point requirements.  4% projects must meet all threshold requirements. 

Threshold requirements include:

  1. 25% of all Units must be reserved for Households with Children
  2. Project must meet MFA’s Mandatory Design Standards and:
    • In addition to meeting MFA’s Mandatory Design Standards, for new construction Projects, at least:
      • 10% of the total Units must have three or more bedrooms with at least 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)
      • and a further 15% of the total Units must have two bedrooms with at least 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).
    • For rehabilitation Projects, at least:
      • 30% of the total Units must have at least two bedrooms.
    • 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.

3.   All Projects must include adequate common space for the provision of the proposed enrichment services. The Applicant must provide a description of the Project’s specific design elements that serve the needs of Households with Children.

Regarding your question about whether a service coordinator is required, the 2022 QAP states: “to receive points under this housing priority, the Project Owner must certify that a service coordinator will be on-site a minimum of two days per week…”  Since the service coordinator is required to receive points, this is not a threshold requirement.

Question 5

Will there be a 2022 Universal Rental Development Application for the current competitive LIHTC round? If so, when will it be posted?

MFA Response:

The 2022 MFA Universal Rental Development Application was originally posted to MFA’s website on October 25, 2022.  The most recent version is dated December 7, 2021.  You can find it here with all other materials that are pertinent to the 2022 Tax Credit Round. https://housingnm.org/developers/lihtc/current-and-prior-tax-credit-rounds  This document includes all forms associated with the tax credit application.  For additional materials required for other MFA financing sources that are referenced in the Application Checklist found at Tab 1a, please contact the program manager for that particular financing source for further guidance.

HOME and National Housing Trust Fund:  Jacobo Martinez at jmartinez1@housingnm.org

NM Housing Trust Fund and HUD 542(c) risk share loans:  Tim Martinez at tmartinez@housingnm.org

Primero Loan Fund: Sharlynn Rosales at srosales@housingnm.org

Question 6:

Are you requiring the Intent to Submit a Tax Credit Application & Development Synopsis form for the 2022 LIHTC round?  If so, when is it due and how do you want it submitted (uploaded to MFA portal, email, mail)?

MFA Response:

2022 QAP Section III.C.7 on page 19 of the 2022 QAP describes Pre-Application Requirements. Applicants must submit an Intent to Submit a Tax Credit Application and Development Synopsis on or before December 20, 2021. This submission is a mandatory requirement for the 2022 competitive LIHTC Application round. 

The 2022 Development Synopsis & Intent to Submit Tax Credit Application is posted on MFA’s website at  https://housingnm.org/developers/lihtc/current-and-prior-tax-credit-rounds.  These documents must be submitted either via email to jredondo@housingnm.org or in hard copy format to:

Jeanne Redondo

New Mexico Mortgage Finance Authority

344 Fourth Street SW

Albuquerque, NM  87102

Once the Development Synopsis and Intent to Submit are received, MFA will create an account in its portal for the applicant to upload the full application between January 14, 2022 and January 28, 2022 at 4:00 p.m. Mountain Standard Time.

Question 7:

With respect to attending the Mandatory QAP Training presentation, what is the standard for participating and receiving a completion certificate from MFA?  Is it attending the presentation via Webex from start to finish or a percentage (60%,70%, 80%...)  or the period with the questions?  In addition, in the past developers that were not able to attend the mandatory presentation were allowed to meet this application requirement by attending an MFA approved tax credit course offered by a recognized training agency (such a Novogradac for instance).  Is this still possible?

MFA Response:

“A representative of the development team (Board member, officer, director, commissioner or staff) must have attended the most recent MFA QAP training prior to submitting the Application.  If the development team includes a qualified, nonprofit organization, NMHA, TDHE or THA, a member of that organization must have attended as well in order to claim points under Project Selection Criteria 1.” (See  2022 QAP Section III.D.7.c on page 20.)

To document their attendance at the webinar, attendees were required to register and log on to the webinar.  The notification regarding the webinar also clarified that “attendance will be recorded, so attendees must plan on attending the entirety of the training.”

MFA has never allowed applicants in the 9% round to attend an alternative training in lieu of the Qualified Allocation Plan Training.  However, “Projects financed with tax-exempt bonds may attend an alternative MFA-approved tax credit training, for which a fee may apply. This approved training must have been completed within the six months prior to submittal of the Application.” (See  2022 QAP Section III.D.7.c on page 20.)

Question 8:

Is there an estimate on the amount of tax credits available for 2022? When I pencil it out, after the 12.5% increase ends 12/31/2021, the forward funding from May 2022 and the covid increased funding, I ended up with a little under $1.6M as available for 2022.  Has MFA estimated yet if they will forward fund from 2023 and if so, how much?

MFA Response:

MFA does not have a definitive answer regarding the credits that will be available in the 2022 LIHTC round.  Once carryover allocations and binding commitments are signed, the list of awards on MFA’s website will be updated and re-posted.  Based upon the information currently available (as of 12/7/2021), MFA estimates that approximately $3.2 million of projected 2022 credit authority remains. While the MFA Board of Directors have authorized forward allocations in the past, there is no guarantee that significant forward allocations will be approved in the future.  MFA will determine the amount of any 2023 forward allocations, if any, to recommend to the Allocation Review Committee and the MFA Board of Directors during its review of applications submitted in January 2022.

Question 9:

Do we still fill out tab 1b LIHTC Project Selection Criteria Scoring Worksheet since tax-exempt bond financed Projects will no longer be required to meet a minimum score?

MFA Response:

Tab 1b LIHTC Project Selection Criteria Scoring Worksheet is not required for tax-exempt bond financed projects. However, exhibits pertaining to the requirements found on page 22 of the QAP must be included in the Application.  Examples include locational efficiency exhibits at Tab 17, applicable targeted population exhibits found in tabs 20 – 22, and the Non-Smoking Property Certification Selection Form at Tab 30.

Question 10:

Does MFA have any more guidance on what it is looking for in terms of adequate site control for tribal trust land projects? We typically see resolutions and agreements to lease. The MFA checklist lists a title binder search. Can MFA confirm this would not be applicable to tribal projects?

MFA Response:

The site control documents you typically see for tribal projects – resolutions and agreements to lease from the tribe – are examples of the “Evidence of Site Control” required at Tab 10a.  See 2022 QAP Section III.C.1 for more information.

Tab 10b stipulates that a title binder or title search showing encumbrances on the property be added as well.  This document supports the site control documents submitted in Tab 10a.  A copy of the most current BIA Title Status Report (TSR) would meet this requirement for tribal projects, if the tribe has sent a land assignment to the BIA Land, Titles, and Records Office (LTRO) and a TSR is available.  If a TSR is not available, a copy of the tribal land assignment documentation with an attorney opinion that opines that

  1. the land assignment is a valid conveyance of a property interest from the tribe to the tribally designated housing entity (TDHE), that the land remains assigned to the TDHE ,
  2. there are no leases or rights of way on the land that would prevent the development of the project, and
  3. the TDHE may obtain a lease to the project site and sublease the project site to the Tax Credit Project’s owner entity.

If the tribe does not have a TSR and the tribe does not issue tribal land assignments, submit an attorney opinion describing the process used by the tribe for land development (e.g. tribal resolution, master lease to TDHE, which then leases the land to the project owner entity) and assurance that there are no known conditions impeding development of the project on the project site. 

Question 11:

Are signatures just required on the PDF bookmarked version of the LIHTC initial application submission?

MFA Response:

All Application documents that require signatures must bear scanned blue ink or third-party verified digital signatures.  Signed pdf versions alongside unsigned excel versions are sufficient where an excel and pdf version are both submitted.  Alternatively, if an Applicant is able provide a third-party verified digital signature in the excel version of the exhibit requiring a signature, it is not required to also provide a pdf version of that document.

Question 12:

On the rent schedule – we have several unit types with different square footages.  In the past we’ve entered multiple 1 BR units across for the various SF numbers, but the current model only allows O, 1, 2, etc…  we can’t enter another 1BR in the column adjacent (if this is making any sense).  Do you have a work around or should we average the SF of all the units and use that number so the bottom line is correct?

MFA Response:

The Rent Summary at Tab 4a does not allow Applicants to enter the same bedroom type across a row.  Each unit type is in one column.  Applicants with multiple unit sizes for the same unit type (i.e. 1 BR) can include the different sized unit in a row below it so all the units of the same type are in the same column.  For example:

Tab 4a - Example

Question 1:

Can the developer fee on any LIHTC project (related party or not) be increased above the amount approved by MFA as long as it is kept out of eligible basis and there is a source to pay for it?

MFA Response:

The 2022 QAP says Developer Fees “shall not exceed” the stipulated amount, therefore the Developer Fee in the development budget is not permitted to exceed the amount provided in the QAP, regardless of the source of payment.

MFA-Funded Developments