"KHC's Guidelines walk through a Development Team Capacity Application, then a mandatory pre-application, then the full Universal Funding Application — am I actually being scored at the pre-app stage, is there a minimum score I need to hit, and what turns a paperwork problem into outright disqualification?"
Before the application even opens: capacity and pre-application
Every member of the development team — developer, co-developer, consultant, and management company — must hold a current KHC capacity approval certification before a funding application can be submitted. A member without one must submit a Development Team Capacity Application at least 60 days before the funding application deadline (Capacity Application Fee: $500 nonprofit, $1,250 for-profit); approved certifications are valid for one to five years at KHC's discretion, and KHC may modify or rescind one at any time if it learns of a material change.
Separately, and before the full application, every developer must complete a pre-application. This is not optional paperwork: "No funding application will be considered for entities that did not first submit a pre-application." The pre-application exists to run KHC's blind-ranking scoring criteria — for new construction, that means the PolicyMap data categories only, per KHC's own 2027 Q&A — so developers can see where their project ranks before deciding whether a full application is worth the cost. KHC's Q&A is explicit that a project's site cannot be changed after the pre-application is submitted, because doing so would undermine the ranking exercise; site control documentation itself is not required until the full application.
The fee ladder
| Fee | Amount |
|---|---|
| Capacity Application Fee | $500 nonprofit / $1,250 for-profit |
| Pre-Application Fee | $500 |
| Application Fee — Housing Credit applicants | $3,000 nonprofit / $4,000 for-profit |
| Application Fee — Tax-Exempt Bond applicants | $4,000 per property + $1,000 per project portfolio transaction fee, if applicable |
| Application Fee — non-credit applicants only | $500 nonprofit / $750 for-profit |
| Initial Inspection/Site Review — rehab/adaptive reuse | $1,250 per property |
| Initial Inspection/Site Review — new construction | $750 per site |
| Initial Inspection/Site Review — non-credit only | $400 per property |
| Market Analysis Review Fee | $1,200 per Housing Credit application/property |
| Housing Credit Reservation Fee | 10% of credits reserved |
All fees are non-refundable in whole or in part, must be paid electronically through the UFA system, and cannot be pre-paid before the application is submitted or paid using KHC funds.
Threshold requirements — the ones with no waiver
"All applications must meet the applicable thresholds regardless of funding source; applicants may not request a waiver to any threshold." If KHC finds a threshold unmet, the applicant gets 48 hours from notification to appeal — but "no changes or additions to the original submission can be made to cure threshold deficiencies," and a denied appeal makes the application ineligible outright. Key thresholds that apply regardless of funding source include: a current capacity approval certification for every development team member; a management company with a KHC Asset Management risk score of "pass," "pass/watch," or "special mention" (C or above) on 70% or more of its properties (requested by email no earlier than 60 days before the deadline); a complete application meeting every QAP and Guidelines checklist item; no additional-funds requests from previously-funded projects; no single-family detached homes; a Notification of Application for Funding sent to the correct current elected officials; identification of at least one fair-housing impediment the project will address; and a waiver of qualified-contract rights, which is automatic simply by applying.
Errors and omissions have a hard numeric ceiling: "Applications that contain six (6) or more errors and/or omissions will be disqualified from consideration." Five or fewer get a 48-hour cure window — but any error the applicant itself typed into the online application is treated as "incurable" (the application can't be amended after submission) even though it still only counts toward, rather than automatically busting, the five-error ceiling. Applicants may submit only one application and one underwriting model per project — "applicants cannot present different scenarios of a project's development budget in the same application submission."
Financing documentation has its own bar: firm commitment letters for non-KHC funding (debt to be assumed and equity alike) must be on the funder's letterhead, name the specific project, state the amount/rate/terms, and be dated within three months of the application deadline; equity commitments must additionally state credit pricing, the annual credit amount, total equity investment, the pay-in schedule, and required reserve amounts. KHC allows softer "conditional commitment" letters in place of firm ones only for FHLB, USDA Rural Development, CDBG, HOME, and other HUD sources, or where the applicant shows it has applied and guarantees to self-fund the gap if the application is denied.
Market study requirements
Every project (or every property inside a portfolio) must submit a market study from a firm or individual on KHC's Approved Market Analyst List, demonstrating sufficient demand based on location, design, unit mix, targeted population, and proposed rents. The study is only valid for six months from its date. For new supply projects in a county where a previously-approved KHC project is under development and not yet placed in service (targeting the same population), the study must show the proposed project's distance, by radius, from that pipeline project — backed by a Google Maps printout — and must analyze the impact of those under-construction units on marketability. KHC may waive the market study requirement entirely for projects of four units or fewer if other support, such as a waiting list, is submitted instead.
Scoring: relative ranking, not a fixed point total
Kentucky's QAP does not publish a fixed numeric point scale or a minimum competitive score anywhere in its text. Existing Supply awards (about 10% of 9% credits) are made on unscored selection criteria — greatest rehabilitation need as ranked by KHC's own Design and Construction staff, share of project-based rental assistance units, and a preference against acquisition credits in preservation deals. New Supply awards are scored on relative criteria — share of affordable units in the county, PolicyMap data (renter cost burden, median household income, and either employment density or road network density depending on set-aside), Permanent Below-Market Sources (see Phase 7), community revitalization plans (urban only), and population type (family/senior/supportive) — with KHC ranking applications against each other on each criterion and awarding points on that relative basis rather than against a published fixed table.
Applicants self-score using KHC's own Excel Scoring Workbook, submitted with the application; KHC then verifies. After preliminary scores go out, an applicant with an ownership interest in the project has 48 hours to request reconsideration in writing, identifying specific grounds — no new documents or revisions are accepted, and it's the applicant's burden to show KHC's error. "All funding decisions will be final and not subject to further appeal" once KHC issues its final scores, and applicants are expressly barred from contacting KHC's executive management team about a reconsideration request during that window — a violation can disqualify the application and suspend the entire development team from the next funding cycle, regardless of which team member made contact.
Two set-aside adjustments sit outside the scored ranking: KHC will shift awards as needed to ensure at least 10% of 9% credits go to applications involving a qualifying nonprofit (≥51% GP/managing-member interest, material participation, Kentucky-registered, not for-profit-controlled), and to ensure at least one 9% New Supply award goes to an application with an FAC-certified Minority Business Enterprise developer earning at least 25% of the developer fee. If multiple applications tie, tiebreakers run in order: most LIHTC units, most innovative characteristics, eligibility for historic rehabilitation credit, and intent for eventual tenant ownership.
Where this goes wrong
- Assuming the QAP or Guidelines publish fixed calendar application dates the way some other states' QAPs do. Kentucky announces each round's UFA opening and closing dates through KHC's eGram service; they are not printed in the QAP or Multifamily Guidelines text.
- Submitting a full application without first completing the mandatory pre-application — "No funding application will be considered for entities that did not first submit a pre-application."
- Assuming a project site can change between pre-application and full application. KHC's 2027 Q&A says explicitly no, because it would undermine the blind-ranking exercise.
- Believing a threshold deficiency can be waived. "Applicants may not request a waiver to any threshold," and the only recourse — a 48-hour appeal — cannot add or change documents.
- Confusing the five-or-fewer-errors cure window (48 hours to fix) with the six-or-more rule, which disqualifies the application outright with no cure available.
- Requesting the management company's KHC Asset Management risk score too late. It must be requested by email no earlier than 60 days before the application deadline, and requires a "pass," "pass/watch," or "special mention" (C or above) score on 70% or more of the company's portfolio.
- Assuming a published minimum competitive score exists for Kentucky's New Supply or Existing Supply criteria. Both are relative rankings against the applicant pool on each criterion — there is no fixed point total or cutoff score stated anywhere in the QAP.
- Submitting more than one underwriting model or development scenario for the same project. Only one application and one underwriting model may be submitted per project.
- Assuming firm commitment or equity letters older than three months before the application deadline will be accepted.
- Contacting KHC's executive management team about a reconsideration request during the response window. This is expressly prohibited and can disqualify the application and suspend the entire development team from the next cycle.
- Assuming "negligible land cost" scoring points survive a transfer routed through a development-team-member intermediary. Per KHC's 2027 Q&A, the below-$5,000 transfer must run directly from the current/original owner to the project-level entity.
- HUD
- LIHTC
- State QAPs
- IRS § 42
- Housing Finance Agencies