"DSHA wants one hard-bound original with wet signatures, one USB copy, roughly 55 numbered exhibits, and a score of at least 100 points -- what actually has to already be true about my site, my team, and my financing before I even get to the scoring sheet?"
Two tracks under one QAP: the competitive 9% round and the rolling 4% bond track
| 9% competitive | 4% tax-exempt bond, no DSHA funding | 4% tax-exempt bond, with DSHA funding | |
|---|---|---|---|
| Submission window | Single annual deadline (April 30, 2026 for 2026) | Rolling, February 15 – December 15 of each year | Must compete in the annual round; unsubscribed set-aside funds then rolling through December 15 |
| Competition | Ranked against other applications within its pool (Nonprofit, Preservation/Rehabilitation, New Housing Creation) | Not ranked competitively -- must independently meet threshold and score minimum | Same annual competitive ranking as 9% applications for the DSHA funding portion |
| Minimum score | 100 points | 95 points | 95 points |
| Bond issuer | N/A | DSHA only | DSHA only |
| Aggregate-basis bond financing | N/A | At least 30%, no more than 55%, of aggregate basis | Same 30–55% band |
4% applications submitted between December 16 and the next annual competitive deadline are not accepted if they are requesting DSHA funding; non-DSHA-funded 4% applications continue on the February 15–December 15 rolling cycle regardless.
The threshold items that actually disqualify an applicant, not just cost points
The QAP lists 28 numbered threshold requirements, and most of them are documentation gates (market study, environmental review, design standards, VAWA lease language, and similar) rather than eligibility bars. A smaller subset functions as a hard stop. Active Development Limits bars an applicant if the Developer and/or Development Consultant, or an Identity-of-Interest/Related Entity, "has not closed their first DSHA LIHTC 9% allocation (regardless of the allocation year)" or "has four active Delaware LIHTC allocations" -- and regardless of those two conditions, no Developer or Development Consultant may have more than two active 9% allocations at any point, where "active" means not yet through final Contractor and Mortgagor Cost Certification approval. No waiver is permitted on this item.
Development Team eligibility carries its own list of eight disqualifying conditions (Threshold Requirements, item 15): a general partner, voting member, developer, or affiliated entity that owned a controlling interest in an LIHTC development foreclosed on or surrendered by deed in lieu within the past seven years; a party who failed to utilize credits within program time guidelines, causing recapture; a general partner removed or withdrawn under threat of removal from a tax credit development; an unapproved change in general partners/managing members on a post-2000 award within the last five years; ownership interest in a development delinquent on certifications or LIHTC fees; failure to fulfill obligations from a prior application (including exceeding proposed cost per unit or failing to implement waivers); an unresolved IRS Form 8823 noncompliance filing from a prior year; or noncompliance with an existing Declaration of Restrictive Covenant or DSHA Regulatory Agreement. No waiver is permitted in this section either.
Site Control must be demonstrated at application by recorded deed, recorded long-term lease, a municipal or county disposition and development agreement, an option, or a purchase contract, and it "must remain valid for a minimum of six months subsequent to the tax credit application deadline" -- DSHA can deem an application ineligible outright if site control documentation is amended after submission, even if the amendment would otherwise seem to strengthen the deal.
Financial Feasibility, by contrast, is deliberately lighter at the application stage: "written letters of interest or letters of intent" from lenders (naming amount, interest rate, term, and lender eligibility confirmation) are sufficient for construction and permanent financing at application -- full commitment letters are not required yet. Those same documents double as the evidentiary basis for the Leveraging and Readiness scoring categories. If a project's anticipated public or private subsidy has not actually been secured by the time DSHA releases rankings, DSHA conditions that project's ranking on receipt of the subsidy by a specific deadline, after which an unmet condition triggers re-ranking or disqualification -- meaning the letter-of-interest stage is not the end of financing scrutiny, just its beginning.
The Market Study threshold requires a study from a DSHA-pre-approved analyst, completed within six months of the application deadline, with assumptions that "precisely reflect the information provided in the application" -- a mismatch between the market study's own assumptions and the application's numbers is itself a threshold failure basis, independent of what the study concludes about demand.
General Application Limits cap any single development at 50% of the state's annual credit authority, and cap any single development entity (including consultants with any ownership interest, however structured) at 50% of total annual credit authority as well -- DSHA may eliminate a development entity's next-ranked project outright if accepting it would exceed that 50% ceiling, though DSHA may instead allow the entity to voluntarily reduce its request to avoid elimination.
What actually has to be assembled: three core forms and roughly 55 numbered exhibits
Every application consists of three DSHA forms -- Part I (General Application), Part II (Pro Forma), and Part III (Applicant Self-Scoring Worksheet) -- plus the exhibits the Application Detailed Checklist requires. The 2025-2026 checklist runs to 55 numbered exhibits (a few, like items 21-49, are themselves multi-part scoring exhibits), organized roughly into Applicant Ownership, Development Team, Site/Environmental/Zoning, Community/Market/Neighborhood, Costs and Financing, and Preservation/Rehabilitation-specific categories.
| Category | Representative exhibits | Notable requirement |
|---|---|---|
| Applicant / Ownership | Organization documents, nonprofit resolution | 501(c)(3)/(4) documentation required to compete in the Nonprofit Pool |
| Development Team | Developer experience schedule, audited financials, litigation disclosure, management agent qualifications | Net liquid assets ≥ 3% of proposed and not-yet-placed-in-service permanent mortgage loans, or equity provider sign-off in lieu |
| Site / Environmental / Zoning | Site control, plot plan, flood/wetlands verification, Phase I Environmental Site Assessment, zoning documentation | Phase I citation in the current checklist is to ASTM E1527-13, an older standard designation -- confirm with DSHA's current Environmental Review Checklist whether a newer ASTM edition is now expected before ordering the report |
| Community / Market / Neighborhood | Independent market study, community compatibility, access to transit, resiliency assessment | Market study preparer must be pre-approved by DSHA from its published list |
| Costs and Financing | Appraisal/opinion of value, equity financing detail, debt financing detail, leveraging detail, cost balance | Debt and equity detail requires only letters of interest/intent at this stage, per Threshold Requirement 20 |
| Preservation / Rehabilitation-specific | Capital Needs Assessment, relocation plan, preservation funding-source proof, historic preservation eligibility letter | CNA must be completed by a licensed architect and include a certified energy rater's audit |
The application must be submitted as one hard-bound paper original with a table of contents and indexed tabs, plus one complete electronic copy on a USB flash drive; all paper signatures must be original (wet) signatures, and each exhibit must be labeled with its exhibit number and title on both the paper tabs and the electronic file names.
A Letter of Interest for any DSHA funding (construction and/or permanent) is a separate, earlier submission -- due three weeks before the LIHTC application deadline, in writing, on the applicant's letterhead, addressed to DSHA's Director of Housing Development, and naming the requested amount, interest rate, and loan term for both construction and permanent DSHA financing, plus other lenders' and the equity provider's contact information. The Funding Supplement is explicit that "applicants may not specify a DSHA funding source as part of their funding request" -- an applicant asks for terms, not for HDF versus HOME versus NHTF by name.
The 48-hour cure period, and what does not qualify for it
DSHA "retains the absolute right to determine that an application is substantially incomplete and ineligible for further review," but may instead allow correction of minor or immaterial defects. If DSHA allows a cure, the applicant has 48 hours (excluding weekends and legal holidays) from DSHA's notification -- by phone and, simultaneously, by email -- to submit the correction; anything the applicant later provides must reflect facts that were already true as of the original application deadline, not facts that became true afterward. Curable examples the QAP names: a missing document that already existed and was legally effective on the deadline date; a contradiction between application items that can be resolved by information accurate as of the deadline; or a missing signature. DSHA's decision to allow a cure "does not constitute approval or acceptance of the application" on further review, and a non-response or non-responsive response within the 48-hour window draws "a negative conclusion," resulting in denial of points in the relevant category or a finding that the application no longer meets threshold.
After the application deadline, the QAP also shuts down informal advocacy: "telephone calls or other oral or written communications on behalf of a tax credit applicant... other than information submitted pursuant to the above shall not be accepted or considered before preliminary reservation awards have been announced" -- a quiet-period rule that applies to a project's development team as much as to elected officials contacting DSHA on an applicant's behalf.
Waivers: capped at three per development, and never for threshold or accessibility items
A waiver from the QAP or its supplementary guidelines costs $1,000 per item requested and must be submitted no later than 30 days before the application deadline (as opposed to the standard 15-day window for ordinary clarification questions). DSHA commits to a binding response within 15 business days of receipt, and every approved waiver is made public. "No more than three (3) waivers total may be requested for the same development starting at application and continuing through the entire compliance and extended use period" -- a lifetime cap on the development, not a per-application-cycle reset -- and where a waiver falls inside a scored category, DSHA subtracts points from that category as the cost of the waiver. "No waiver requests will be considered for any accessibility requirements or threshold requirements" under any circumstance, though DSHA retains sole discretion to grant an unforeseeable-and-unavoidable-circumstance waiver outside the three-waiver limit.
Fees due before an applicant knows the outcome
| Fee | Amount | Due |
|---|---|---|
| 9%/4% Tax Credit Application Fee | $1,500, non-refundable | With submission (all applications, including volume-cap credit) |
| DSHA Financing Application Fee | $2,000, non-refundable | With submission, for any application requesting DSHA funding |
| Waiver Request Fee | $1,000 per item | With the waiver request (30 days pre-deadline) |
| Tax Credit LIHTC Allocation Fee | 1.50% of carryover/allocation amount × 10 years | No later than carryover/construction closing |
| Compliance Monitoring Fee | $750 per unit ($1,000/unit for Income Averaging elections) | Before allocation of credits, IRS Form 8609, or the Carryover Agreement -- whichever is issued first |
All fees under this schedule are stated as non-refundable regardless of whether the application is ultimately funded.
Where this goes wrong
- Treating the 4% tax-exempt bond track's February 15–December 15 rolling window as a way to access DSHA funding year-round. DSHA funding for 4% deals is only available inside the annual competitive round, or afterward on a rolling basis solely if the funding set-aside remains unsubscribed and only through December 15 -- DSHA-funded 4% applications are not accepted between December 16 and the next annual deadline.
- Assuming full financing commitments are required at application. Threshold Requirement 20 (Financial Feasibility) requires only letters of interest or letters of intent at submission -- but DSHA conditions an award's ranking on a firm-financing deadline afterward, so the letter-of-interest stage is not the end of financing scrutiny.
- Treating the Sponsor Capacity scoring category (0-10 points, based on a developer's LIHTC track record) as a threshold eligibility gate. It is a scoring lever only; the actual hard eligibility gate on developer capacity is Active Development Limits (no more than two active 9% allocations at any point) and the eight-item Development Team disqualification list, neither of which is waivable.
- Assuming a Phase I Environmental Site Assessment ordered to whatever ASTM standard is currently common practice will satisfy DSHA. The current (2025-2026) checklist itself still cites ASTM E1527-13, an older standard designation -- confirm with DSHA's Environmental Review Checklist which edition it currently expects rather than assuming the newest ASTM standard applies automatically.
- Believing a curable defect means the application is safe. DSHA's cure allowance explicitly "does not constitute approval or acceptance," applies only to minor/immaterial defects (not substantial incompleteness), and requires a response within 48 hours excluding weekends and holidays -- a missed or non-responsive reply draws a negative conclusion and denial of points or threshold failure.
- Assuming any QAP requirement can be waived for the right fee. Accessibility requirements and threshold requirements can never be waived under any circumstance, and every development is limited to three total waivers across its entire compliance and extended use period -- not three per application cycle.
- Assuming a 100-point (9%) or 95-point (4% bond) score guarantees an award. Meeting the minimum score is necessary but not sufficient for a 9% competitive award -- applications still rank against each other within their pool (Nonprofit, Preservation/Rehabilitation, New Housing Creation), and only the highest-ranked application(s) in each pool receive a Preliminary Reservation.
- Contacting DSHA, legislators, or local officials on an applicant's behalf after the deadline to advocate for a pending application. The QAP bars consideration of any such communication until after preliminary reservation awards are announced.
- Assuming the 50% single-entity credit cap only counts direct ownership. The QAP extends it to "any consultants that have or will have an interest in the ownership of the development whatsoever," including general, limited general, limited partner, or special limited partner relationships, co-developers, or joint ventures sharing in developer fee.
- Assuming a Nonprofit Pool application that loses in that pool is out of the competition entirely. The QAP states such applications remain eligible to compete in their respective (non-nonprofit) pools as well.
- HUD
- LIHTC
- State QAPs
- IRS § 42
- Housing Finance Agencies