One agency, four soft-money programs, and two property-tax tools it doesn't run — South Dakota

One combined application, four programs, and a QAP that only really describes one of them

SDHDA is South Dakota's designated administering agency for all four of the major soft-money programs a developer is likely to layer onto a South Dakota Housing Tax Credit deal: HOME, the (federal) Housing Trust Fund, the state-created Housing Opportunity Fund, and the tax credit itself. All of them are requested on one combined form -- the "HOME/Housing Tax Credit Application" -- plus program-specific supplemental applications and cost-allocation tools listed in the QAP's own Application Checklist: a HOME Cost Allocation Tool, an HTF Supplemental Application and Cost Allocation Tool, a CHDO Supplemental Application, and an HOF Supplemental Application (Exhibit 8, items 34-39).

The QAP's own substantive treatment of HOME and HTF is a single sentence: "Applications that also request HOME and HTFs must comply with federal regulations for those programs" (§ II.G). Unlike some states' QAPs, which spell out DCA- or HFA-originated loan terms (interest rate floors, amortization, recourse, draw schedules) directly in the allocation plan, South Dakota's QAP does not state any HOME or HTF loan terms at all -- those live in the separate supplemental applications and cost-allocation tools this research could not fully obtain, and in SDHDA's own program pages summarized in the table below. Applicants should treat the QAP itself as silent on HOME/HTF loan mechanics and confirm current terms directly against those separate forms rather than assume the QAP's scoring and underwriting sections apply to them.

The Housing Trust Fund is the federal National Housing Trust Fund, not a South Dakota invention

SDHDA's own program page states plainly: "The HTF was created under the Housing and Economic Recovery Act of 2008 with funding coming from Fannie Mae and Freddie Mac." That is the federal National Housing Trust Fund (NHTF) -- a HUD-administered formula grant that Congress funded through a small set-aside on Fannie Mae and Freddie Mac's business volume, with each state designating its own administering agency. South Dakota designated SDHDA. It is a genuinely different program, with a different legal origin, from the state-created Housing Opportunity Fund (SDCL Chapter 11-13, created by 2013 Senate Bill 235) -- the two happen to be administered by the same office and often layered on the same deal, but should not be treated as two names for the same money.

Property tax relief: two real, verified tools -- neither one a PILOT, and neither one run by SDHDA

This research found no PILOT (payment-in-lieu-of-taxes) program in South Dakota comparable to what other states document -- nothing in the QAP references one, and nothing on SDHDA's own program pages describes one. That is a negative finding, not proof that no local housing authority could ever negotiate something similar under its own general powers; it means no documented, SDHDA-administered, or QAP-referenced PILOT program was found in this research.

Two other property-tax mechanisms are real and verified. First, SDCL 10-6-137, the "discretionary formula for reduced taxation," lets a county commission -- at its own discretion, county by county -- apply a phased-in assessment for "any new affordable housing structure containing four or more units, with a monthly rental rate of the units at or below the annually calculated rent for the state's sixty percent area median income being used by the South Dakota Housing Development Authority for a minimum of ten years following the date of first occupancy," provided the structure's full and true value is at least $30,000. The reduced assessment runs for five tax years following construction, the assessed value floor cannot drop below the prior year's assessed value, and the benefit is unavailable inside a tax-increment-finance district. This is not a statewide entitlement -- it exists only where a county commission has adopted it.

The QAP's own underwriting standard assumes this kind of tool will be used: the Debt Coverage Ratio requirement in § III.K sets a 1.20 minimum DCR "in the first year that full expenses are in effect (i.e., after tax abatements have expired) and annually thereafter for the first 15 years or the term of the first mortgage financing, whichever is greater." SDHDA is not describing a hypothetical -- its own pro forma standard is written around a deal that starts with reduced property taxes and later pays full freight.

Second, SDCL 1-19A-20 through 1-19A-24 provide an 8-year moratorium on the increase in assessed value attributable to certified restoration or rehabilitation of a property listed on the National or State Register of Historic Places, following the Secretary of the Interior's Standards for Rehabilitation. This is administered entirely by the South Dakota State Historical Society (the State Historic Preservation Office), not SDHDA, and its board of trustees approves applications. Secondary program materials from the State Historical Society describe an annual application deadline of November 1; this research could not independently confirm that specific deadline within the statutory text of SDCL 1-19A itself, so it should be verified directly with the State Historical Society before being relied on for a filing date. The moratorium freezes only the value increase caused by the certified work -- it does not exempt the property's pre-existing assessed value, and it is available to any qualifying historic property, not just LIHTC-financed housing.

No South Dakota state historic tax credit -- only the federal 20% credit, recognized through a basis boost

This research found no state historic rehabilitation income tax credit in South Dakota. The only historic-rehabilitation tax credit available to a South Dakota project is the federal 20% Historic Rehabilitation Tax Credit, jointly administered by the National Park Service, the IRS, and the State Historic Preservation Office. The QAP recognizes it in two places: as one of four categories eligible for the discretionary 130% basis boost -- "Rehabilitation projects that qualify for the National Historic Preservation Act of 1966 (NHPA) as amended (16 U.S.C. 470) and utilize Historic Housing Tax Credits" (§ I.H) -- and as a Construction Type scoring category worth 20 of a possible 60 points for "Rehabilitation or Reconstruction with Historic Nature" (§ V.A.3, Exhibit 7). Both references presuppose the federal credit, since no state-level credit exists to be "utilized" instead.

Tribal gap financing: a real set-aside inside this QAP, and a wholly separate federal track outside it

The QAP names an explicit Rural/Tribal Set-Aside: "SDHDA will set aside up to 20% of the total annual tax credits available for the highest scoring project located in a rural community with a population of less than 5,000 or on tribal land, either held in trust or fee-simple, and within the exterior boundaries of an Indian Reservation" (§ I.D.2). On the 2026 pool that is up to $840,000, reverting to the general pool if unused. The Housing Trust Fund carries its own separate $600,000 set-aside for Indian Reservation and Service Enriched projects -- a different pot inside a different program, not the same money counted twice.

A secondary source found during this research -- an NCSHA-hosted document on LIHTC in Indian areas -- describes South Dakota as awarding "more points" to reservation projects "but does not have a set-aside." That directly contradicts the current QAP's own text, which names an explicit set-aside, not just a scoring bonus. This research treats the QAP's own language as controlling and flags the secondary source as either outdated or simply wrong on this point.

For a project on tribally leased land, the QAP's own Reservation Requirements substitute a BIA Title Status Report for the standard title commitment or recorded warranty deed (§ VI.B, Reservation Requirements Phase 2, item 5) -- confirming SDHDA's own process is built to underwrite trust-land deals directly, not merely to accommodate them as an exception.

Separately, and entirely outside SDHDA's process, the Native American Housing Assistance and Self-Determination Act (NAHASDA) funds the Indian Housing Block Grant (IHBG), a formula grant administered by HUD's Office of Native American Programs that flows directly to each reservation's own Tribally Designated Housing Entity -- not through SDHDA, not through this QAP, and not through the combined HOME/HTC application. A developer partnering with a tribal housing authority on a South Dakota reservation should expect to coordinate IHBG or other NAHASDA funding directly with that tribe's housing entity as an independent capital-stack workstream. This research could not confirm current-year IHBG dollar allocations for specific South Dakota tribes and does not state a figure here rather than guess.

Financial Support: SDHDA's one, source-agnostic scoring line for gap money

Where some states run an elaborate multi-category, source-specific point table for gap financing, South Dakota scores it with one simple, source-agnostic line: "Financial Support" (§ V.A.5), worth up to 20 points based purely on dollars per unit -- $1,000 to $5,000/unit earns 10 points, $5,001 to $10,000/unit earns 15, and $10,001 or more earns 20. The QAP does not distinguish HOME dollars from HTF dollars, HOF dollars, foundation grants, or tribal contributions for scoring purposes; a dollar is a dollar regardless of source.