Cost, construction type, and the labor package — Connecticut

Cost control: a dollar-per-square-foot baseline table by construction type

CHFA's 2026 Construction Guidelines: Construction Costs set baseline construction costs on a per-square-foot basis, organized by construction type and building configuration, against which an applicant's proposed costs are compared and adjusted for site-specific and material-specific conditions ("extraordinary adders" such as demolition, elevators, historic-restoration requirements, or prevailing wage/Davis-Bacon exposure).

This baseline feeds directly into the QAP's own scoring: an Applicant seeking the QAP's "Cost Effectiveness & Hard Costs" points (up to 4 of the 28 Financial Efficiency & Sustainability points) must submit "detailed per Square Foot calculations" tied to the architect's drawings, and "[p]oints will not be awarded if this detailed calculation is not provided... or if the GC has not yet been selected" (2026 Construction Guidelines: Construction Costs, Section VIII).

Contractor fee caps: three separate percentages, and a different structure for non-CHFA bond issuers

CHFA's standard is explicit that these are three separate line items, not one blended number: "Builders overhead and builder's profit-GMP fees are two different types of costs, and are usually stated as two separate numbers," with overhead capped at 2% and profit at 6% of total hard costs, general requirements separately capped at 6%, and the combined total "shall not exceed 14%" even where CHFA adjusts the individual percentages for a specific project type such as scattered sites. CHFA will verify at cost certification that the percentages actually used in the GC's contract match what was carried in the Application, and will "only recognize the lower percentages" if the Cost Certification shows the contractor charged more than the Application stated or more than the Procedures allow.

Construction contingency and developer fee

Construction contingency runs approximately 5% of total hard costs for new construction ("no more than 8%"), rising to 10% (with CHFA discretion to go higher) for historic adaptive reuse or rehabilitation involving environmental remediation, hazardous materials abatement, or structural work; up to 100% of the budgeted construction contingency may be included in eligible basis, supported by a Letter of Attestation.

The Developer Allowance/Fee (DAF) is capped, combined paid-plus-deferred, at 15% of Total Development Cost, calculated on a sliding scale that — as documented in the only versions of "CHFA Procedures" and the Connecticut State Bond Commission's underwriting guideline located in this research (dated January 2021 and August 2015, respectively, and consistent with each other) — runs 15% of the first $5 million of construction and soft costs, 12.5% of the next $5 million, 10% of the next $5 million, 7.5% of the next $5 million, 5% of the next $5 million, and 2.5% of any amount over $25 million. A separate formula applies to "the preservation of expiring use developments or recapitalization of existing affordable housing": 5% of the acquisition price (less reserves and seller financing) plus 10% of total construction and soft costs, capped at $2.5 million. The deferred portion may not exceed the lesser of 50% of the total paid DAF or the amount recoverable, without interest, from CHFA-approved distributions within the first 15 years of operations, and CHFA pays out the fee on a fixed milestone schedule (no more than 25% at initial closing/25% construction completion, up to 50% at 50% construction completion, up to 80% at 100% construction completion, 10% at Form 8609 issuance, and the final 10% at final closing).

Green building: a scored QAP category for new construction, not a mandatory certification gate

For the New Construction Classification, sustainable design runs entirely as a scored QAP item (up to 10 of the 28 Financial Efficiency & Sustainability points), not as a pass/fail Threshold requirement. CHFA's 2026 Construction Guidelines: Energy Conservation & Sustainability set the point criteria directly: Energy Conservation Tier 1 (average projected HERS Index ≤46, or ≥25% below the ENERGY STAR Target Index) earns 2 points and Tier 2 (HERS ≤42, ≥35% below Target, or Passive House certification) earns 3; Green Building Tier 1 (Enterprise Green Communities 2020, NGBS Gold, or LEED Gold) earns 2 points and Tier 2 (NGBS Emerald, LEED Platinum, or Living Building Challenge Core) earns 3; Solar earns 2 points, Digital Literacy & Connectivity 1 point, and Commissioning 1 point.

That same Guideline's Solar sub-section states that "[w]hile rooftop solar is a baseline expectation for new construction," the QAP's own points structure still lists Solar as a 2-point scored item rather than a separate Threshold requirement — language worth flagging as genuinely ambiguous rather than resolving one way or the other, since "baseline expectation" and "scored, not mandatory" sit somewhat in tension on the page. For the Preservation Classification (and any 4% Credit deal, per Basic Threshold Requirement #20), the standard is softer still: CHFA "expect[s] the proposal to contain" the items on Exhibit A-1 "to the extent appropriate and practical for the property" — an expectation, not a certification requirement, and distinct from both the New Construction scoring path and from a hard mandatory-certification Threshold of the kind some other states' QAPs impose.

Labor: a real, active state prevailing wage law, a high and often-misreported dollar threshold, and an unresolved trigger question

Connecticut has a real, currently enforced state prevailing wage statute, Conn. Gen. Stat. Section 31-53, which requires "[e]ach contract for the construction, remodeling, refinishing, refurbishing, rehabilitation, alteration or repair of any public works project by the state or any of its agents, or by any political subdivision of the state or any of its agents" to contain a prevailing-wage provision (subsection (a)). Subsection (h)(1) then exempts smaller projects: the statute "shall not apply where... the combined total cost or total bond authorization for all work to be performed by all contractors and subcontractors in connection with new construction of any public works project is less than one million dollars," or where the combined cost of remodeling, refinishing, refurbishing, rehabilitation, alteration, or repair work "is less than one hundred thousand dollars."

That $1,000,000 new-construction figure is worth stating carefully because it is frequently misreported: a 2013 Connecticut General Assembly Office of Legislative Research report and an undated Connecticut State Library summary of the statute both state a $400,000 new-construction threshold, reflecting the number that was current from 1991 until it was later raised by the General Assembly. The current statutory text — Conn. Gen. Stat. Section 31-53(h)(1)(A), as codified through Public Act 25-174 — sets the new-construction exemption threshold at "less than one million dollars," with the $100,000 remodeling/repair threshold unchanged. Confirm any secondary source's stated dollar threshold against the current statutory text directly rather than an older report or an undated summary.

Whether the statute reaches a privately owned LIHTC development financed by CHFA — a quasi-public state authority, not "the state" or "a political subdivision" itself — is a genuinely open question this research could not resolve from any primary Connecticut source. CHFA's own 2026 Construction Guidelines: Construction Costs put the burden squarely on the applicant rather than answering it: "Prevailing Wages and/or Davis-Bacon Wage Rates may be required. It is the responsibility of the applicant to determine if such requirements apply to their project. Please contact the necessary authorities to determine the applicability of prevailing wages and/or Davis-Bacon wage rates" (Section III). The LIHTC Program Guideline lists "[a]pplicability of Federal Davis Bacon or State prevailing wage rates" as a required discussion topic at the mandatory Pre-Application Conference (Section II.D.6) rather than resolving it in the QAP itself, and the Connecticut Department of Labor's own prevailing-wage webpage directs project sponsors to request an individualized "determination letter regarding prevailing wage coverage of your project" by email rather than publishing a categorical rule for state-agency-financed private housing.

None of that uncertainty affects federal Davis-Bacon exposure, which applies independently of the state-law question. Layering HOME or National Housing Trust Fund dollars into the capital stack triggers Davis-Bacon on its own terms: under 24 C.F.R. Section 92.354, any construction contract for housing with 12 or more HOME-assisted units must include Davis-Bacon prevailing-wage provisions, reaching the entire project's construction once triggered — not just the HOME-assisted units or HOME-funded cost lines — regardless of how the state-law question above is eventually resolved for a given deal.