PRHFA's own money, PRDOH's money, and a $1.4 billion program the QAP barely names — Puerto Rico

PRHFA's own soft money: HOME and the Housing Trust Fund

The QAP's Foreword states plainly that the Authority will make the 2025-QAP \"a component of the forthcoming 2025 Notice of Funding Availability (NOFA-2025)\" and that NOFA-2025 \"intends to leverage other funds managed by the Authority, such as\" the CDBG-MIT-funded LIHTC-MIT program, \"HOME Investment Partnerships Program (HOME) and Housing Trust Fund (HTF), under joint underwriting criteria compatible with the 2025-QAP.\" The Foreword's own funding table lists the amounts available for the cycle: HOME Investment Partnerships Program, $10,492,002; Housing Trust Fund, $619,615 — both funds PRHFA manages itself, not a separate territorial housing agency. That distinguishes Puerto Rico from a structure where HOME and the National Housing Trust Fund sit with one agency and 9% credits sit with another.

The environmental-review section confirms the same division of labor from the compliance side: \"PRDOH is the Responsible Entity (RE) for ER and compliance for all projects that receive CDBG-MIT funds; whereas the Authority is the RE for all other federal funds, such as HOME and HTF\" (Section 5.5.5). PRHFA alone handles Section 106/SHPO submittals for HOME- and HTF-funded projects, while PRDOH handles that submittal for CDBG-MIT-funded projects (Section 5.1.4.8).

One hard limit applies to all three of PRHFA's own gap sources: \"HOME/HTF or CDBG-MIT funds cannot be used to fund project's reserves\" (Section 5.2.3.5) — rent-up, operating, and replacement reserves have to come from Tax Credit equity, hard debt, deferred developer fee, or some other source entirely.

CDBG-MIT and PRDOH: the $83.8 million actually on the table this cycle

Per Federal Register Notice 85 FR 4676, \"HUD allocated $8.285 billion in CDBG-MIT funds to Puerto Rico for mitigation activities, the largest allocation of CDBG-MIT funds distributed between a total of eighteen (18) HUD grantees\" (Section 3.2). That $8.285 billion headline covers every category of mitigation activity in PRDOH's CDBG-MIT Action Plan — infrastructure, energy, drainage, and more — not just rental housing, and it is not the number a LIHTC applicant should underwrite to.

The QAP's own Foreword gives the actually-relevant figure: \"On June 6, 2025, the Authority and the Puerto Rico Department of Housing (PRDOH) entered into a Subrecipient Agreement to set-aside an allocation of CDBG-MIT funds for the redevelopment, conversion, rehabilitation, and/or reuse of industrial and commercial properties into low- and moderate-income housing projects,\" and states that \"PRHFA expects to allocate $83,797,630 under the [CDBG-MIT] program LIHTC-MIT\" for this cycle. That $83,797,630 — dated to a specific, named subrecipient agreement, not a program-wide headline — is the number to treat as this cycle's actually-earmarked CDBG-MIT gap money.

CDBG-MIT funds are requested \"under a NOFA (see Annex P)\" separate from the Tax Credit application itself, and every applicant for CDBG-MIT dollars must disclose all federal funds received since the date of the relevant disaster and undergo a Duplication of Benefits (DOB) review before any award: \"Any assistance determined to be duplicative assistance must be deducted from the program's calculation of the Applicant's total need prior to awarding federal assistance,\" and federal fund agreements carry repayment/recapture provisions if a duplication surfaces later (Section 5.2.1).

The CDBG-DR \"Gap to LIHTC\" program the QAP's scoring formula never names

PRDOH's own disaster-recovery site (recuperacion.pr.gov, the successor domain to the QAP's cited cdbg-dr.pr.gov links) describes a distinct \"CDBG-DR Gap to Low-Income Housing Tax Credits Program,\" administered by PRHFA under PRDOH's supervision as the CDBG-DR grant recipient, with an original allocation described on that site as $1,423,000,000, and a stated Phase 2 that \"contemplated using $1.8 billion of CDBG-DR funds\" combined with LIHTC and other sources. Per that same page, selection for this money runs through PRHFA's ordinary QAP process — threshold review, point ranking, technical feasibility, cost evaluation, underwriting, subsidy layering review, and PRDOH environmental review.

This research could not confirm what portion of that $1.423 billion (or the $1.8 billion Phase 2 figure) remains unobligated as of today — both numbers, as published, read as the program's original or total allocation, not a live remaining-balance figure, and no public dashboard tracking current CDBG-DR Gap-to-LIHTC balances was located. Treat both figures as historical program size, not current availability, and confirm the live number directly with PRHFA/PRDOH before underwriting to it.

A separate wrinkle: the QAP's own Gap Financing Efficiency scoring criterion (Section 5.4.2, II.6) names its qualifying gap sources as \"HOME, HTF, CDBG-MIT, RD, FHLB-NY, among others\" — CDBG-DR is not named in that specific list, even though a whole program by that name exists on PRDOH's own site and is explicitly routed through the QAP's threshold/ranking process. Whether CDBG-DR gap funding counts toward that scoring formula's \"Gap Financing Requested\" denominator the same way HOME/HTF/CDBG-MIT do is not resolved by the QAP's own text — confirm directly with PRHFA rather than assuming either way.

Property tax and income tax relief: a real statute, and a construction-start deadline that already closed

The QAP itself only requires disclosure, not documentation of terms: an applicant claiming or not claiming a tax exemption must submit “written evidence for projects claiming and/or receiving (or not) tax exemptions (e.g., property tax waivers, rental income exemptions)” (Section 5.1.5.13), and the same phrase recurs in the underwriting-assumptions section (5.2.1). The QAP never itself names the statute or defines the mechanism — that lives entirely outside PRHFA's document, in Puerto Rico's own housing-incentive law.

That statute is Act No. 47 of June 26, 1987, as amended (“Ley de Copartícipación del Sector Público y Privado para la Nueva Operación de Vivienda” — “Public-Private Co-Participation Act for the New Housing Operation,” this English rendering is EZFeasi's own translation, not an official one), codified at 17 L.P.R.A. §§ 891 et seq. Article 5 (17 L.P.R.A. § 895) grants an income-tax exemption, up to a 10% return on invested capital, on income received by the owner of a “proyecto multifamiliar de interés social dedicado al alquiler” (social-interest multifamily rental project) whose rent is paid by low- or moderate-income families and whose units receive no direct rental subsidy from the Puerto Rico or U.S. government. Article 6 (17 L.P.R.A. § 896) separately exempts those same units from property tax outright: “Estarán exentos de pago de la contribución sobre la propiedad las unidades de vivienda de proyectos multifamiliares que se alquilen a familias de ingresos bajos o moderados” (“The housing units of multifamily projects rented to low- or moderate-income families shall be exempt from payment of property tax” — EZFeasi translation), conditioned on passing the tax savings through: “El canon de arrendamiento de cada unidad de vivienda refleje una reducción igual al monto total de la contribución sobre la propiedad que estaría obligado a pagar el dueño, de no aplicar la exención contributiva aquí provista” (“The rent of each housing unit must reflect a reduction equal to the full amount of the property tax the owner would otherwise be obligated to pay, absent this exemption” — EZFeasi translation). Both exemptions run up to 15 years, and Article 7 (17 L.P.R.A. § 897) routes the application through the Secretary of Housing (PRDOH), who must act within 60 days, with the Secretary of Housing certifying tenant income-eligibility annually to the Secretary of the Treasury (Hacienda).

There is a real, verified problem for a project applying under the current 2025-QAP: both Article 5's income-tax exemption and Article 6's property-tax exemption are conditioned — Article 6 cross-references Article 5(e) directly — on construction or rehabilitation having begun “después de la aprobación de esta Ley y antes de 31 de diciembre de 2018” (“after this Law's approval and before December 31, 2018” — EZFeasi translation). Act 47-1987 has been amended as recently as Ley Núm. 100 of August 1, 2025, and that December 31, 2018 construction-start cutoff was not extended in any amendment through that date, per the compiled text's own amendment history. Read literally, that means a project breaking ground today under the 2025-QAP cycle would not qualify for Article 5 or Article 6 relief — this pathway looks aimed at housing stock that already exists or broke ground years ago, not new LIHTC production starting now. This research did not find a later amendment reopening that window; if PRHFA or PRDOH is still routing current-cycle LIHTC deals to Article 6 property-tax relief in practice, that would mean either an unfound subsequent amendment or an administrative extension this research could not locate — confirm directly with PRHFA/PRDOH and PR tax counsel before assuming Act 47-1987 is available to a project starting construction today.

A separate, general (not low-income-specific) residential rental income tax exemption exists under Act 132-2010 (“Ley de Estímulo al Mercado de Propiedades Inmuebles,” 13 L.P.R.A. § 10692), open to any “eligible landlord,” not just social-interest housing. As published, that exemption was set to expire December 31, 2025; the Puerto Rico Senate passed a bill (PS 19, approved by the Senate in March 2025) to extend it 30 additional years, but this research could not confirm whether that bill was signed into law by today's date. A third, distinct mechanism — a Puerto Rico Treasury (Hacienda) regulation implementing a “Ley de Créditos Contributivos por Inversión en la Nueva Construcción y Rehabilitación de Vivienda para Alquiler a Familias de Ingresos Bajos o Moderados” (Hacienda Regulation No. 8380, effective September 1, 2013) — appears to be a separate investment tax credit rather than the Act 47-1987 exemption described above, but its specific percentage, cap, and current status could not be confirmed from public sources located in this research.

CRIM (Centro de Recaudación de Ingresos Municipales) is Puerto Rico's single, centralized agency that collects property tax on behalf of all 78 municipios, rather than each municipality billing separately — a genuinely distinctive feature of PR's property tax system relative to the mainland, and the agency that would administer any Article 6 exemption once granted by the Secretary of Housing. No separate CRIM-specific PILOT program beyond Act 47-1987's own mechanism was confirmed in the sources reviewed for this research.

Historic rehabilitation: scoring points, not a tax credit

The QAP itself offers no historic rehabilitation tax credit. What it offers is scoring: a flat 3 points (Section 5.4.2, II.2) for \"substantial rehabilitation of a state designated historic property, federally designated historic place, or a contributing resource to a federally designated Historic District,\" and a separate flat 3 points (II.3) for adaptive reuse of an existing industrial/commercial structure into residential use (not available if the existing structure is demolished). Either path also requires Section 106/36 CFR Part 800 review and a State Historic Preservation Office (SHPO) technical-assistance letter (Section 5.1.4.8) as a Basic Threshold item, regardless of whether the scoring points are pursued.

Secondary sources researching Puerto Rico's Act 60-2019 Incentives Code reference a \"Historic Zones Tax Exemption\" tied to Section 8 of Act No. 7 of March 4, 1955, but this research could not independently verify that provision's current, full text or confirm it functions as anything comparable to the federal 20% historic rehabilitation tax credit. Do not assume a PR historic tax credit parallel exists for LIHTC stacking purposes without separately verifying it.