LIHTC Feasibility Checklist: What to Verify Before You Commit to a Site

1. Define the project you are testing

Start with one dated base case. Record the parcel, proposed use, approximate unit count, bedroom mix, affordability mix, construction approach, and intended application cycle. Identify whether each input is verified, estimated, or unresolved.

A rough assumption can be useful if everyone knows it is rough. The dangerous assumption is the one that looks verified because it came from last month’s spreadsheet.

Create a short evidence register:

2. Separate site eligibility from competitive scoring

An attractive point total cannot resolve an ineligible site. Review zoning, access, utilities, environmental constraints, title issues, and site-control requirements before relying on a competitive score.

Then assess the applicable QAP’s scoring categories and required evidence. Label points as documented, potentially achievable, or dependent on a third party. Do not turn a nearby amenity into a confirmed score until its qualifying definition and documentation are checked.

For the state-specific process, start with the QAP scoring guides and the relevant housing agency’s current documents. California readers can locate adopted regulations through CTCAC’s official regulations page.

3. Build a rent roll that can be traced to its inputs

Keep unit count, bedroom size, affordability level, gross rent limit, utility allowance, and underwritten tenant rent in separate fields. Document any rental assistance assumption separately, including its status and term.

HUD publishes MTSP income limits for tax-credit and qualifying tax-exempt bond projects. Confirm the applicable geography and project circumstances before selecting a table. An annual update is a reason to review the model, not a reason to apply the same rent increase to every project.

Also test whether the underwritten rents are supportable in the local market. A regulatory ceiling and achievable rent answer different questions.

4. Price the whole development plan

Organize land, hard costs, soft costs, financing costs, reserves, contingencies, and fees as identifiable uses. Track which items are backed by quotes and which remain allowances.

Record exclusions in plain language. A construction estimate that excludes utility connections or a financing budget that assumes an earlier closing can look complete while leaving a material cost outside the model.

Treat calendar assumptions as cost assumptions. Extending site control, delaying closing, or carrying construction longer can change the capital required even when the building design stays the same.

5. Distinguish available financing from hoped-for financing

For every proposed source, record amount, status, conditions, expected funding date, and the person responsible for securing it. Keep an application under consideration separate from an executed commitment.

Reconcile sources and uses, then ask whether the timing works. A source available at permanent conversion may not pay a construction invoice when it comes due. A deferred fee may help balance a model while creating a repayment question that still needs analysis.

The sources and uses primer explains the categories. This checklist adds the decision discipline: identify what is committed, what is conditional, and what fills the gap if an assumption fails.

6. Test the assumptions that could reverse the decision

Run a base case, an adverse case, and a case that changes only one major input. Examples include a higher construction estimate, lower supportable rents, reduced equity proceeds, or a later closing. These are scenarios to investigate, not predictions.

Record the result in terms the team can act on: additional funding required, reduced debt capacity, a lower supportable land price, or a schedule that misses an application milestone.

7. Write a one-page go/no-go memo

The memo should state the proposed decision, the three largest unresolved risks, the next evidence to obtain, and the maximum additional diligence spending authorized before another review.

Keep the model and memo on the same version. If a material input changes, the decision needs a fresh review too.

Bring a site to the next discussion. Book an EZFeasi demo to walk through a feasibility model and see how its assumptions connect to the decision.