"Virginia Housing's own scoring criteria give me up to 60 points for stacking soft money into my deal, but the QAP never mentions HOME, the National Housing Trust Fund, or a state tax credit by name — so which of DHCD's programs, Virginia Housing's own state credit, and Virginia's property-tax statutes can I actually count on, and does any of it touch my score the way I'd expect?"
Two agencies, two calendars: DHCD's gap money versus Virginia Housing's credit
Virginia Housing (legally still the Virginia Housing Development Authority — its 1995-era enabling documents and its own Qualified Allocation Plan both refer to it only as "the Authority," with "Virginia Housing" used as the public-facing name throughout its current Manual and website) administers the federal 9% and 4% Low-Income Housing Tax Credit and, separately, Virginia's own state housing tax credit. It does not administer HOME, the National Housing Trust Fund (NHTF), or the state's own Virginia Housing Trust Fund (VHTF). Those three sources are combined by a different state agency — the Department of Housing and Community Development (DHCD) — into a single Affordable and Special Needs Housing (ASNH) Competitive Loan Pool, which DHCD's own program page describes as opening for applications twice a year, in the fall and spring, for both rental and homeownership projects. Rental projects must generally comprise at least five units and remain affordable for 30 years.
The Virginia Housing Trust Fund itself is a state-created fund, not a federal pass-through: it is codified at Virginia Code §§ 36-141 through 36-150 (Chapter 9 of Title 36) and was established through Item 108 G of the 2012 Appropriations Act, with an initial $8 million allocation becoming available in FY 2014. DHCD's current VHTF Competitive Loan Pool caps individual loans at $750,000 and describes "low-interest loans" with repayment terms "tailored to each project's needs" — this research did not find a published interest-rate table or standard amortization schedule for the pool, so specific loan pricing should be confirmed directly with DHCD rather than assumed. None of this — HOME, NHTF, or VHTF — is coordinated on Virginia Housing's own Housing Credit calendar; a developer stacking DHCD gap financing into a Housing Credit deal is managing two entirely separate agencies' timelines, not one combined process.
A separate DHCD-administered credit is worth naming only to rule out: the Neighborhood Assistance Program (NAP) tax credit is a real, statutory Virginia donation incentive — a credit of up to 65% of a cash or in-kind donation's value to an approved 501(c)(3), with roughly $17 million authorized per year (about $8 million for human-services organizations, $9 million for education), non-refundable, and carried forward up to five years. It is not, however, a Housing Credit capital-stack tool: it is allocated in small annual amounts to individual approved nonprofits to attract donations toward their own operating and services budgets, it never appears in Virginia Housing's QAP, and it is not sized or structured to fund multifamily rental development costs the way HOME, NHTF, or VHTF dollars are.
A 60-point formula for soft money, not an enumerated list
Where Georgia's QAP names eleven specific "Qualifying Sources" for its Favorable Financing scoring category, Virginia's approach (13VAC10-180-60, subsection E.2.e, part of the QAP's broader "Housing needs characteristics" scoring item rather than a dedicated financing category) is deliberately generic: it scores "any funding source, as evidenced by a binding commitment or letter of intent, that is used to reduce the credit request," any commitment to donate land, buildings, or waive local fees, or any donation of land (including a below-market-rate land lease) from a party that is not a principal in the applicant. The dollar value of that funding, local support, or donated land is divided by total development cost, and the applicant earns two points for every percentage point of total development cost covered, up to a maximum of 60 points — a formula, not a fixed list of eligible program names, meaning HOME, NHTF, VHTF, a city grant, or a foundation loan could all qualify on identical terms as long as they meet the item's own tests.
| Item | What it scores | Points |
|---|---|---|
| e. | Funding source, donated land/buildings, or local fee waiver used to reduce the credit request, as a percentage of total development cost | 2 points per percentage point, up to 60 |
| f. | New project-based subsidy from HUD or Rural Development, per voucher, competing only in the New Construction or Northern Virginia pool | 5 points per voucher up to 40 (offsets item e.'s cap in equal measure) |
| g. | Real estate tax abatement on the increase in the value of the development | 5 |
| h. | Existing HUD Section 8/Section 236 or Rural Development 515 subsidy at time of application (applicant must waive acquisition developer fee) | 20 |
These four items sit inside the same numbered "Housing needs characteristics" scoring subdivision as unrelated items like qualified-census-tract location and opportunity-zone siting — Virginia's QAP does not group financing-related scoring into its own separate category the way some other states do.
The eligibility test for item e. has real teeth: to count, a loan must be below-market or cash-flow-only, and financing from Virginia Housing itself, or market-rate permanent financing, is explicitly excluded from qualifying — a developer cannot double-count a Virginia Housing first mortgage as "soft money." The benchmark for "below-market" is itself changing. The current QAP (amended effective December 17, 2025) still defines it as the one-year London Interbank Offered Rate (LIBOR) at the time of commitment; Virginia Housing's Final Draft 2027 QAP — posted June 9, 2026 and stating it is amended effective January 1, 2027, though this research could not confirm from the agency's own website whether the Board of Commissioners had formally adopted it as of this writing (September 2026) beyond scheduling a public hearing on August 31, 2026 and Board consideration on September 16, 2026 — replaces LIBOR with the Applicable Federal Rate (AFR) published under IRC § 1274(d), and separately closes a related-party gap by also excluding financing from any entity in which a principal of the applicant holds an ownership interest, not just financing from the Authority itself.
The 2027 draft also appears to reduce the project-based-voucher item (f.) materially — the draft text, extracted from a tracked-changes PDF, is difficult to parse cleanly, but it suggests a drop from 5 points per voucher (40-point maximum) to something closer to 1 point per voucher with a much lower cap. Because the exact revised point values could not be confirmed with confidence from the draft document's own text, any tool built against this item should verify the final adopted number directly against Virginia Housing's officially adopted 2027 QAP rather than relying on this draft language.
Virginia's own state tax credit rides alongside the federal one, outside the QAP's own text
Virginia does have a state low-income housing tax credit — the Virginia housing opportunity tax credit (VHOTC), created by the General Assembly in 2021 and codified in the Virginia Housing Opportunity Tax Credit Act, Va. Code §§ 58.1-439.29 and 58.1-439.30. Notably, it never appears anywhere in either the current QAP's regulatory text (13VAC10-180) or the Final Draft 2027 QAP (13VAC10-181) — both documents are entirely silent about it, even though Virginia Housing's own 2026 Housing Tax Credit Manual defines "Credits" in its glossary to mean either the federal credit or "Virginia housing opportunity tax credits issued pursuant to the Virginia Housing Opportunity Tax Credit Act." The state credit is administered by Virginia Housing ("the Authority" in the statute's own terms) through a separate eligibility-certificate process rather than through the QAP's competitive scoring: an eligibility certificate is issued only "upon the Authority's approval of a final cost certification," the same milestone that produces a federal Form 8609.
The set-aside structure changed for the current allocation period in a way easy to miss if working from an older secondary source: for calendar years 2022 through 2025, $20 million of the $60 million annual cap was reserved for qualified projects in localities with a population no greater than 35,000. For calendar years 2026 through 2030, that same $20 million set-aside is redefined by statute to instead cover "qualified projects located in a geographic area within the Balance of State Pool" — the same Balance of State Pool the current QAP defines as 14.15% of total credit authority (13VAC10-180, Part I) — with Virginia Housing required to notify the Virginia Housing Commission of any change to that pool's boundaries.
The credit is allocated within a project's existing ownership structure, not sold on an open market. The statute lets a qualified taxpayer's interest — including the housing opportunity tax credit itself — be assigned among partners, members, or shareholders in a pass-through entity on whatever terms those parties agree to, regardless of whether the recipient holds a matching share of the federal credit. But a materially different, fully transferable version does not yet exist: subsection J of § 58.1-439.30 only directs Virginia Housing to report to the General Assembly's money committees on "the potential structure and cost of a separately authorized certificated" program that would let a project sell all or part of its state credits to unrelated taxpayers. Until and unless that separate program is enacted, the VHOTC cannot be sold to a stranger to the deal the way some other states' certificated credits can.
Property tax relief is a locality's choice, and the QAP is about to narrow which kind counts
Virginia has no statewide, LIHTC-specific property tax exemption. What it has instead are several general, locality-optional tools under Title 58.1 of the Virginia Code, and one statewide assessment methodology that is not an exemption at all.
| Provision | What it does | Locality-optional? | Duration |
|---|---|---|---|
| § 58.1-3295 | Requires the local assessor to value affordable rental housing using an income approach (contract rent, rent restrictions, actual operating expenses) rather than standard fair-market comparables, once a locality's ordinance defines "affordable rental housing" and an owner applies; excludes federal/state tax credits from being treated as real property or income | Depends on locality adopting a defining ordinance/resolution; not an exemption | No stated end date — an ongoing assessment methodology, not a term-limited exemption |
| § 58.1-3220 | Locality-optional partial exemption for residential structures (15+ years old) substantially rehabilitated, renovated, or replaced — explicitly extends to multifamily units substantially rehabilitated by replacement | Yes, by local ordinance | Up to 15 years, based on the increase in assessed value or up to 50% of rehabilitation cost |
| § 58.1-3219.4 | Locality-optional partial exemption for new structures or other improvements located in a designated redevelopment or conservation area or rehabilitation district | Yes, by local ordinance | Up to 30 years |
| § 58.1-3221 | Locality-optional partial exemption for rehabilitated/renovated/replacement structures — commercial or industrial use only | Yes, by local ordinance | Up to 15 years — not applicable to residential LIHTC property at all |
None of these four provisions was written with LIHTC in mind; all four predate or sit outside the Housing Credit program and apply to any qualifying property a locality chooses to cover.
Richmond's Affordable Housing Partial Tax Exemption Program (AHTEP) is a documented, real local implementation of this kind of tool: a 15-year, annually renewable partial exemption equal to the increase in assessed value from rehabilitation, available where at least 30% of units serve households at or below 80% AMI, rents are capped at 30% of household income, the property is at least 20 years old, and the rehabilitation meets minimum renovation thresholds (20% of base value for single-family, 40% for multifamily). Richmond's own program page does not cite which Code of Virginia section authorizes it, so this guide cannot confirm with certainty that it operates under § 58.1-3220 specifically rather than a locally chartered variant — but its structure (rehab-triggered, assessed-value-increase-based, 15-year term) closely tracks that statute. This is a single city's program, not a statewide Virginia Housing product, and this research did not confirm how many other Virginia localities currently offer an equivalent ordinance.
The QAP's own item g. (5 points for "a real estate tax abatement on the increase in the value of the development") does not name which of these mechanisms qualifies under the currently effective plan — and the Final Draft 2027 QAP resolves that ambiguity by narrowing the item, not broadening it. The draft rewrites item g. to require "a commitment from a local governmental entity to reduce, rebate, or otherwise offset real estate taxes owed on the increase in the assessed value of the development pursuant to a negotiated agreement or program," and then adds an express carve-out: "excluding any reduction in assessed value obtained pursuant to § 58.1-3295 of the Code of Virginia." In plain terms, once the 2027 QAP takes effect, simply benefiting from § 58.1-3295's income-approach assessment methodology will not earn this scoring point on its own — a project will need an actual negotiated local abatement, rebate, or exemption agreement (the kind § 58.1-3220 or § 58.1-3219.4 make possible) instead.
Where this goes wrong
- Assuming Virginia Housing administers HOME or the National Housing Trust Fund. Both are run by the Department of Housing and Community Development (DHCD), combined with the state's own Virginia Housing Trust Fund into DHCD's Affordable and Special Needs Housing (ASNH) Competitive Loan Pool — a program on its own spring/fall cycle, unconnected to Virginia Housing's Housing Credit calendar.
- Assuming Virginia has no state low-income housing tax credit. It does — the Virginia housing opportunity tax credit (Va. Code §§ 58.1-439.29–.30) — but neither the current nor the pending 2027 QAP's regulatory text mentions it anywhere; it is administered by Virginia Housing entirely outside the QAP's competitive scoring process.
- Treating the Virginia housing opportunity tax credit as sellable or transferable to an unrelated taxpayer the way some other states' certificated credits work. Current law only allows it to be allocated among partners or members already inside the qualified project's own ownership structure; a separately authorized, sellable/certificated version has only been the subject of a legislatively directed study, not enacted law.
- Using $60 million as today's Virginia housing opportunity tax credit annual cap. That figure governed 2022–2025 only; the cap for calendar years 2026–2030 is $64 million, and the $20 million set-aside shifted from small-population localities to the QAP's own Balance of State Pool.
- Confusing the Neighborhood Assistance Program tax credit with a Housing Credit capital-stack tool. NAP is a real, DHCD-administered 65%-of-donation credit, but it is a small, per-nonprofit annual allocation aimed at donations for services and education, it never appears in the QAP, and it is not sized for multifamily development capital.
- Assuming the QAP's up-to-60-point soft-money item accepts any subordinate loan a project can find. It excludes financing from Virginia Housing itself — and, under the pending 2027 QAP, financing from any entity in which an applicant's principal holds an ownership interest — as well as market-rate permanent financing; qualifying loans must be below-market-rate or cash-flow-only.
- Relying on the one-year LIBOR rate as the current below-market-loan benchmark going forward. The QAP in effect today (amended December 17, 2025) still uses LIBOR; the Final Draft 2027 QAP replaces it with the IRC § 1274(d) Applicable Federal Rate.
- Assuming any reduction in a LIHTC property's real estate taxes earns the QAP's 5-point tax-abatement scoring item. The Final Draft 2027 QAP expressly excludes relief obtained solely through § 58.1-3295's income-approach assessment methodology — only a negotiated local abatement, rebate, or exemption agreement is proposed to qualify.
- Confusing § 58.1-3220 (residential rehabilitation exemption, which explicitly reaches substantially-rehabilitated multifamily units) with § 58.1-3221 (the parallel provision for commercial or industrial structures only). A LIHTC residential rehab deal needs the former; the latter does not apply to residential property at all.
- Treating Richmond's Affordable Housing Partial Tax Exemption Program as a statewide Virginia Housing product available anywhere in the Commonwealth. It is one city's own locally chartered implementation of a locality-optional tool, its own program materials do not cite the enabling Code of Virginia section, and this research did not confirm how many other Virginia localities offer an equivalent ordinance.
- HUD
- LIHTC
- State QAPs
- IRS § 42
- Housing Finance Agencies