One soft-money pipeline runs through the QAP; the state's own fund doesn't reach a typical LP — West Virginia

Two soft-money systems under one roof

The financing WVHDF actually lends into a LIHTCP deal — HOME, the National Housing Trust Fund, and a state-created ERA2 Housing Fund — is processed as part of the same LIHTCP application, on the same WVHDF Form 1040, by the same underwriting staff. West Virginia's separate, statutory Affordable Housing Fund is a different program entirely, created outside the LIHTCP framework, with its own eligibility rules that do not track LIHTCP's Ownership Entity structure.

The practical read: a typical for-profit-sponsored LIHTC deal has a real, WVHDF-administered soft-debt path through HOME/HTF/ERA2, but the state's own Affordable Housing Fund is not that path unless the Ownership Entity's general partner is itself a local government, housing authority, or 501(c)(3) — a structure some, but not most, WV LIHTCP deals use.

What it costs to take WVHDF's own soft debt

The Fund is explicit about why this money exists: HOME, HTF, and ERA2 financing are "utilized to fill financing gaps on properties that, due to inadequate cash flow, have an inability to amortize all hard debt at standard mortgage interest rates required to fund property costs." If a portion can be amortized, "the interest rate is typically zero percent, but generally no higher than one percent"; anything deferred carries a zero rate.

Scoring under the Type of Financing criterion requires this financing — combined with any other RD, HUD, or other government financing or guarantee/insurance — to equal or exceed 50% of Total Permanent Financing, with only two exceptions: properties awarded points for a Maturing Mortgage with Expiring Project-Based Rental Assistance, and cases where post-selection underwriting pushes the percentage below 50% through no fault of the Applicant. During underwriting, WVHDF also reserves the right to cut the requested HOME/HTF/ERA2 amount if it determines the property can support more hard debt at standard rates.

Taking HOME, HTF, or ERA2 money comes with a mandatory 20% deferred developer fee requirement, and the Fund requires that any deferred portion of its own financing be preserved by using favorable financing terms elsewhere in the stack — either other Fund financing or outside financing at terms that meet or exceed the Fund's own.

For properties using HOME or HTF financing, the required general contractor cost estimate must also address Build America, Buy America Act (BABA) compliance costs, and new-construction properties using HOME or HTF must additionally build in the energy efficiency standards from HUD/USDA's April 26, 2024 Federal Register determination — both are Reservation Request and Carryover documentation requirements, not just closing conditions.

The state-designated basis boost as a stack lever

Separate from HOME/HTF/ERA2 debt, WVHDF can award a state-designated basis boost of up to 30% under Section 42(d)(5)(B)(v) of the Code to any building it determines needs the boost to be financially feasible — available statewide except where a property already qualifies for a basis boost under Section 42(d)(5)(B)(ii) or (iii). This isn't automatic: the Manual frames it as a judgment call weighed against per-credit equity price, total property costs, the affordability band for 60% units, a vacancy assumption of 5%-7%, other income, operating expenses, replacement reserves, permanent-financing terms, cash flow, and a Debt Service Coverage Ratio normally in the 1.25-1.30 range (lower for properties with 50%+ project-based rental subsidy).

Historic rehabilitation: mandatory once you start, and two different state credits

The Allocation Plan awards 20 scoring points (of the roughly 500-point threshold needed to survive Threshold) for rehabilitating a Certified Historic Structure, provided at least 50% of the property's residential rental units sit inside that structure. But the same section goes further than a scoring incentive: regardless of whether the Applicant even pursues those points, "if existing structures in a property are rehabilitated to historic standards, such property is required to pursue and obtain both federal and state historic tax credit equity." Certification runs through a National Park Service Historic Preservation Certification Application (Part 1 – Evaluation of Significance, currently Form 10-168), which the Plan treats as stale if dated more than six months before the Reservation Request due date.

Because Schedule RBIC can be claimed against WV Personal Income Tax as well as Corporation Net Income Tax, a partnership-owned LIHTC deal generating this credit has a mechanism to pass the benefit to individual partners' WV personal returns rather than needing a corporate taxpayer in the ownership chain — a structural detail worth confirming with WV tax counsel before assuming a particular investor can actually use the credit. Both federal Part 2 (Description of Rehabilitation) and Part 3 (Request for Certification of Completed Work) review, plus the state credit application itself, run through the State Historic Preservation Office's GOapply portal, separate from anything WVHDF touches.

Property tax relief: not confirmed to exist for a LIHTC owner

This research did not find a West Virginia statute granting a property-tax exemption or a payment-in-lieu-of-taxes (PILOT) arrangement specific to LIHTC-financed rental housing. The state's general property-tax exemption categories (tax.wv.gov) include religious property, educational institutions, government property, and property of 501(c)(3) charitable organizations — but that charitable exemption is expressly limited to property "not held or leased out for profit," language that appears to exclude a rent-restricted but for-profit-owned LIHTC building. WVHDF's own enabling statute (W. Va. Code Chapter 31, Article 18) was also checked and contains no property-tax provision reaching privately owned, Fund-financed developments. Do not assume a WV property-tax abatement exists when underwriting a deal; if a specific municipality or county offers a local abatement, that would be a local, not state, arrangement and should be confirmed directly with that jurisdiction.