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109.04.1-I. Development of the Plan.

AR ADC 109.04.1-IArkansas Administrative Code

West's Arkansas Administrative Code
Title 109. Development Finance Authority
Division 04. Multi-Family Housing
Rule 1. Housing Credit Program Qualified Allocation Plan
Ark. Admin. Code 109.04.1-I
109.04.1-I. Development of the Plan.
The Arkansas Development Finance Authority (“ADFA” or the “Authority”) is charged with the responsibility of administering federal low-income housing tax credits (“Housing Credits”) for the State of Arkansas (the “State”). ADFA is also charged with the responsibility of promulgating rules and regulations concerning the allocation of the Arkansas low-income housing tax credit (the “State Housing Credits”) pursuant to ARK. CODE ANN. § 26-51-1701 et seq. The Tax Reform Act of 1986 created the Housing Credit to encourage the private sector to invest in the construction and rehabilitation of rental housing for low and moderate-income individuals and families (IRC Section 42). The Revenue Reconciliation Act of 1989 amended IRC Section 42(m) that requires allocating agencies to allocate low income housing tax credits pursuant to a Qualified allocation Plan (“QAP”). Low-income housing tax credits shall be allocated in accordance with this plan and any amendments thereto and are set forth below.
(1) (A) QUALIFIED ALLOCATION PLAN
For purposes of this paragraph, the term ‘qualified allocation plan’ means any plan--
(i) which sets forth selection criteria to be used to determine housing priorities of the housing credit agency which are appropriate to local conditions,
(ii) which also gives preference in allocating housing credit dollar amounts among, selected projects to-
(I) projects serving the lowest income tenants,
(II) projects obligated to serve qualified tenants for the longest periods, and
(III) projects which are located in qualified census tracts (as defined in subsection (d)(5)(C) (IRC Section 42)) and the development of which contributes to a concerted community revitalization plan, and
(iii) which provides a procedure that the agency (or an agent or other private contractor of such agency) will follow in monitoring for noncompliance with the provision of this section and in notifying the Internal Revenue Service of such noncompliance which such agency becomes aware of and in monitoring for noncompliance with habitability standards through regular site visits.
(B) CERTAIN SELECTION CRITERIA MUST BE USED
The selection criteria set forth in a qualified allocation plan must include--
(i) project location,
(ii) housing needs characteristics,
(iii) project characteristics, including whether the project includes the use of existing housing as part of a community revitalization plan,
(iv) sponsor characteristics,
(v) tenant populations with special housing needs,
(vi) public housing waiting lists,
(vii) tenant populations of individuals with children,
(viii) projects intended for eventual tenant ownership,
(ix) the energy efficiency of the project, and
(x) the historic nature of the project.
(C) APPLICATION TO BOND FINANCED PROJECTS
Subsection (h)(4) (IRC Section 42) shall not apply to any project unless the project satisfies the requirements for allocation of a housing credit dollar amount under the qualified allocation plan applicable to the area in which the project is located.
(2) Credit allocated to building not to exceed amount necessary to assure project feasibility--
(A) In general, the housing credit dollar amount allocated to a project shall not exceed the amount the housing credit agency determines is necessary for the financial feasibility of the project and its viability as a qualified low-income housing project throughout the credit period.
(B) Agency evaluation--In making the determination under subparagraph (A), the housing credit agency shall consider--
(i) the sources and uses of funds and the total financing planned for the project,
(ii) any proceeds or receipts expected to be generated by reason of tax benefits,
(iii) the percentage of the housing credit dollar amount used for project costs other than the cost of intermediaries, and
(iv) the reasonableness of the developmental and operational costs of the project.
Clause (iii) shall not be applied so as to impede the development of projects in hard-to-develop areas. Such a determination shall not be construed to be a representation or warranty as to the feasibility or viability of the project.
(C) Determination made when credit amount applied for and when building placed service--
(i) In general, a determination under subparagraph (A) shall be made as of each of the following times:
(I) The application for the housing credit dollar amount.
(II) The allocation of the housing credit dollar amount.
(III) The date the building is placed in service.
(ii) Certification as to amount of other subsidies--Prior to each determination under clause (i), the taxpayer shall certify to the housing credit agency the full extent of all Federal, State, and local subsidies which apply (or which the taxpayer expects to apply) with respect to the building.
(D) Application to bond financed projects--
Subsection (h)(4) (IRC Section 42) shall not apply to any project unless the governmental unit which issued the bonds (or on behalf of which the bonds were issued) makes a determination under rules similar to the rules of subparagraphs (A) and (B).

Credits

Amended Oct. 23, 2009; Nov. 5, 2010; Nov. 23, 2011; Nov. 21, 2012; Oct. 25, 2013; Dec. 19, 2014.
Current with amendments received through December 15, 2023. Some sections may be more current, see credit for details.
Ark. Admin. Code 109.04.1-I, AR ADC 109.04.1-I
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