State of Utah 2021 Federal and State Housing Credit Program Allocation Plan Approved By UHC Trustees June 25, 2020 Approved By Governor Gary R. Herbert July 3, 2020 Table of Contents INTRODUCTION .......................................................................................................................................................... 7 CONDITIONS AND DISCLAIMERS ........................................................................................................................... 8 APPLICATION TRAINING ........................................................................................................................................ 11 APPLICATION PROCESS .......................................................................................................................................... 11 NOTICE TO APPLICANTS: ............................................................................................................................................... 11 A. Applicant Disqualification ............................................................................................................................ 11 B. Market Saturation Ineligibility ...................................................................................................................... 12 C. Ineligible Project Types ................................................................................................................................ 12 COMMON APPLICATION AND SHARING OF INFORMATION WITH OTHER FINANCIAL SOURCES ......... 12 DOCUMENTATION REQUIREMENTS .................................................................................................................... 13 MARKET STUDY ....................................................................................................................................................... 14 SCORING DISCREPANCIES ..................................................................................................................................... 14 APPEALS PROCESS ................................................................................................................................................... 14 PROHIBITED ACTIVITIES ........................................................................................................................................ 15 UHC FEES .................................................................................................................................................................... 16 A. Application Fee ............................................................................................................................................. 16 B. Reservation Fee ............................................................................................................................................. 16 C. Additional Credit Reservation ....................................................................................................................... 16 D. Carryover Allocation Fee(s) ......................................................................................................................... 16 E. Allocation Fee ............................................................................................................................................... 17 F. Initial Compliance Monitoring Fee ............................................................................................................... 17 G. Subsidy Layering Review Fee ....................................................................................................................... 17 H. Subordination Fee ......................................................................................................................................... 17 I. Documentation Revision Fee ........................................................................................................................ 18 J. Annual Compliance Monitoring Fees and Non-Compliance Monitoring Fees ............................................. 18 HOUSING CREDIT SET-ASIDE POOLS ................................................................................................................... 20 A. Government and Non-Profit Homeownership Set-Aside 5%........................................................................ 20 B. Non-Metro Areas and Small Project Set-Asides 10% .................................................................................. 20 C. Permanent Supportive Housing Set-Aside 30% ........................................................................................... 20 D. Non-Profit Organization Set-Aside 10% ...................................................................................................... 20 E. Acquisition/Rehab of Affordable Unrestricted Units Set-Aside 10% ........................................................... 21 F. General Pool 35% ........................................................................................................................................ 21 PROCESS FOR SELECTING WHICH POOL A PROJECT WILL COMPETE IN FOR HOUSING CREDITS ........ 21 A. Government and Nonprofit Homeownership Pool Selection (5%) ................................................................ 22 B. Non-Metro Areas and Small Project Pool Selection (10%) .......................................................................... 22 C. Permanent Supportive Housing (30%) .......................................................................................................... 22 D. Nonprofit Pool Selection (10%) .................................................................................................................... 23 E. Acquisition/Rehab of Affordable Unrestricted Units Set-Aside (10%) ......................................................... 23 F. General Pool Selection (35%) ....................................................................................................................... 23 REMAINING OR REVERTED HOUSING CREDITS ................................................................................................ 24 PROJECT SELECTION PROCESS ............................................................................................................................. 26 A. Introduction ................................................................................................................................................... 26 B. Financial Feasibility ..................................................................................................................................... 26 C. Proximity to Existing Tax Credit Developments ........................................................................................... 27 D. General Project Underwriting and Threshold Requirements ....................................................................... 27 E. Additional Requirements for Rehabilitation Projects ................................................................................... 28 F. Housing Credit Program Training ................................................................................................................ 29 DEVELOPER, CONTRACTOR AND GENERAL REQUIREMENT FEE LIMITS ................................................... 29 A. Developer Fee/Owner Equity ........................................................................................................................ 30 B. Contractor Fee (Builder Fee) ....................................................................................................................... 30 C. General Requirements ................................................................................................................................... 31 MAXIMUM HOUSING CREDIT ALLOCATION ...................................................................................................... 32 A. Allocation Limit ............................................................................................................................................. 32 B. Final Determination of Reservation of Housing Credits............................................................................... 33 RESERVATION OF HOUSING CREDITS ................................................................................................................. 35 PERFORMANCE BOND REQUIREMENT FOR PROJECTS WITH CONDITIONAL USE PERMITS .................. 35 PROJECT DEVELOPMENT SCHEDULE REPORTING ........................................................................................... 36 LAND USE RESTRICTION AGREEMENT (LURA) ................................................................................................. 36 CARRYOVER OF HOUSING CREDITS .................................................................................................................... 36 PRE-CLOSING REVIEW ............................................................................................................................................ 37 10% COST CERTIFICATION ..................................................................................................................................... 37 FINAL COST CERTIFICATION & ISSUANCE OF LOW-INCOME HOUSING CREDIT ALLOCATION AND CERTIFICATION FORMS ........................................................................................................................ 38 A. Final Cost Certification and Equity Price Changes ...................................................................................... 38