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

Illinois Housing Development Authority's (IHDA) 2018-2019 Qualified Allocation Plan (QAP) includes points for rehabilitation of existing buildings. 

Section 42(m) of the Code requires the Authority to give preference in allocating Tax Credits to:

  • Projects serving the lowest income tenants
  • Projects obligated to serve qualified tenants for the longest periods
  • Projects which are located in qualified census tracts and the development of which contribute to a Revitalization Plan

All acquisition/rehabilitation Projects that have existing federal project-based rental assistance contract on 50% or more of the units are NOT eligible to apply for 9% Tax Credits unless a Waiver of 4% Feasibility is obtained. Requests for a Waiver of 4% Feasibility must be made 30 days prior to Application due date.

 

Set Asides

The Illinois Housing Development Authority (IHDA) 2018-19 Qualified Allocation Plan (QAP) includes points for rehabilitation of existing buildings and geographic set-asides. 

Geographic set-asides consist of allocation goals for different sections of the State represented by percentages of the total allocated 9% Tax Credits.

Set-Aside                  Allocation Goal        

City of Chicago          12%     

Chicago Metro           37%     

Other Metro               15%     

Non-Metro                  20%     

Statewide                   16%     

Upon evaluating all Projects and determining the most effective use of available Tax Credits, the Authority may choose to modify any of these allocation goals including, but not limited to, limiting the number of Projects or amount of Tax Credits allocated in any set-aside, regardless of the Project's score and how its score relates to all other Projects.

a) The City of Chicago set-aside consists of the City of Chicago.

b) The Chicago Metro set-aside consists of the areas within the counties of Lake, DuPage, Kane, McHenry, Will, and Cook excluding the City of Chicago.

c) The Other Metro set-aside consists of areas identified as Other Metro. For a list of the areas identified as Other Metro, see “Other Metro Municipalities” on the Website.

d) The Non-Metro set-aside consists of all other areas of the state not included in the City of Chicago, Chicago Metro, or Other Metro set-asides.

Statewide Set-Asides can be allocated to projects fulfilling certain housing policy goals as determined by the Authority, or projects in geographic set-asides where the total amount of Tax Credits available is less than the total amount of Tax Credits requested.

 

Thresholds

In addition, all projects in consideration of 9% Tax Credits must include the following minimum budget of $25,000 per unit, and include the following minimum project scope:

  • Replacement of all unit and common area kitchen and bathroom cabinets and counter tops.
  • Replacement of all plumbing fixtures within the entire project with fixtures meeting with the fixture criteria identified in the Standards for Architectural Planning and Construction document available on the Website.
  • Replacement of all flooring throughout the project.
  • Repair/Replacement of one additional major system (furnaces, water heaters, central boilers, air conditioning equipment, elevator, windows, roofing, tuck-pointing of exterior masonry, etc.) throughout the entire building.

The Application must include a detailed explanation of any and all construction cost variances existing between the development budget and PNA. In addition, any deviation from rehabilitation scope noted above will require a detailed explanation.

The Authority reserves the right to modify the construction scope based on a review of the explanation.

 

Point Incentives

Projects that involve the rehabilitation of existing buildings can earn up to seven (7) points. The rehabilitation must contain at least a minimum budget of $25,000 per unit, and include the following minimum Project scope:

  • Replacement of all unit and common area kitchen and bathroom cabinets and counter tops
  • Replacement of all plumbing fixtures within the entire project with fixtures meeting with the fixture criteria identified in the Standards for Architectural Planning and Construction document available on the website
  • Replacement of all electrical fixtures with Energy Star fixtures
  • Replacement of all flooring throughout the project
  • Repair/Replacement of one additional major system (furnaces, water heaters, central boilers, air conditioning equipment, elevator, windows, roofing, tuck-pointing of exterior masonry, etc.) throughout the entire building
  • The Authority may waive any of the above items based on the Property Needs Assessment.

Points

Percentage of Hard Residential Construction Costs Attributable to Rehabilitation:

3

25.0% to 49.99%

5

50.0% to 74.99%

7

75.0% or more


Projects providing units with rents restricted to the 30% Area Median Income (AMI) Housing limit and occupancy, restricted to households with incomes at or below 30% of AMI, evidenced through submission of the Scoring – 30% AMI Housing Certification, available on the Website, can earn up to six (6) points as follows:

Points

30% AMI units as a % of the total Project units

1

5.00%-9.99%

3

10.0%-19.99%

6

20.0% or more

Projects with existing unit based (rather than tenant based) State, federal, or local rental assistance, as evidenced through submission of an executed rental assistance contract for the existing property can cumulatively earn up to five (5) points as listed below.

 

Existing Federal, State, and Local Rental Assistance

Length of Remaining Assistance (years)

% of total units assisted

 

<9

10 or more

5.00% - 25.00%

2

3

25.01% or more

3

5

Projects with new unit based (rather than tenant based) rental assistance ensuring tenants pay no more than thirty (30%) of their income towards rent and utility expenses combined, evidenced through submission of a rental assistance commitment can cumulatively earn up to ten (10) points as listed below. Renewal of an existing rental assistance contract to the property is not considered new rental assistance under this category.

Contributed By: 
National Housing Trust

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