"IHFA caps my contractor fee, my developer fee, and even my architect fee as a share of construction costs, reviews the highest-cost 20% of applications by hand, and scores cost-per-square-foot directly against the last three rounds' own data — but does any of that change because Idaho has no state prevailing wage law to plug into the budget?"
No Total Development Cost cap, but fee ceilings and a direct cost-per-square-foot score do the same job
The 2026 QAP does not publish a flat per-unit or aggregate Total Development Cost ceiling. Instead, cost containment runs through three separate mechanisms layered on top of each other: capped fees on every major cost category, a mandatory in-depth review of the highest-cost applications in each round, and a direct scoring formula tied to real per-square-foot cost data from recent rounds.
| Fee category | Cap | Basis |
|---|---|---|
| Contractor & Construction Management fees (total) | 14% of construction costs — 6% General Requirements + 2% General Overhead + 6% Contractor Profit | Section 7.3.8 |
| Architect & Engineering fees (total) | 8% of construction costs — 4% Architect + 4% Engineering; new construction strictly held to 8% | Section 7.3.9 |
| Developer fee — new construction, 1-60 units | 15% of total eligible basis (before 30% increase) | Section 7.3.5 |
| Developer fee — new construction, 61+ units | 12% of total eligible basis | Section 7.3.5 |
| Developer fee — all tax-exempt bond developments (regardless of unit count) | 15% of total eligible basis | Section 7.3.5 |
| Developer & Consultant fee — acquisition | 5% of total acquisition eligible basis | Section 7.3.5 |
| Developer & Consultant fee — rehabilitation | 15% of total rehabilitation eligible basis (before 30% increase) | Section 7.3.5 |
"Construction costs" for these caps means site work, new construction or rehabilitation, and construction contingency — it excludes contractor profit, overhead, general requirements, construction management, and (for the A&E cap) architect/engineering fees themselves.
Where an identity of interest exists — any principal of the Sponsor, Developer, or a consultant also a principal of the contractor — the contractor/construction management fee ceiling drops sharply: to 10% of construction costs for new construction with 60 or fewer units, acquisition/rehabilitation developments, and tax-exempt bond developments, or to 8% for new construction with 61 or more units (Section 7.3.10).
Separately, "in the application round, the Association will conduct an in-depth cost review for the top 20% of the highest per unit cost applications," which can require additional third-party documentation — an architect's statement on unusual design or material requirements, an MAI appraisal on land value, or census tract demographic data supporting an area-of-opportunity claim (Section 7.3.1; Exhibit E, "Cost Standard").
Cost containment scoring: real 2023-2025 application data, not a rule of thumb
| Cost as % of adjusted average | Hard construction cost points | All remaining development cost points |
|---|---|---|
| ≤80% | 4.0 | 4.0 |
| 80.1%-90.0% | 3.0 | 3.0 |
| 90.1%-100.0% | 2.0 | 2.0 |
| 100.1%-125.0% | 1.0 | 1.0 |
| ≥125.1% | 0.0 | 0.0 |
Adjusted average benchmarks (2023-2025 rounds, highest/lowest excluded, trended +7.5% for inflation): $265.99 per residential square foot for hard construction costs; $150.53 per residential square foot for all remaining development costs. Acquisition/rehabilitation-only developments are excluded from this calculation. Source: 2026 Combined Annual LIHTC Application Information.
Construction contingency and deferred developer fee mechanics
Construction contingency included in eligible basis must be at least 5%, and is capped at 10% of construction costs for new construction or 20% for rehabilitation (Section 7.3.11). A deferred developer fee is treated as a funding source provided repayment occurs within the timeframe required by the tax credit equity provider; absent that documentation, IHFA defaults to assuming a 12-year repayment period when sizing the deal (Exhibit E, "Deferred Developer Fee").
Green building: a mandatory threshold, not a scoring bonus — plus a separate baseline every project must meet
Green building in Idaho is an application threshold, not a scoring category: "To meet the Green Building Threshold, the proposed development design must incorporate one of the following 'green building' certifiable program standards into their design or incorporate a combination of individual green building components into their design whose total value is eight (8) points or more" (Section 4.9.4). The recognized certification programs are LEED for Homes, NW Energy Star, ICC 700 National Green Building Standard, Enterprise Green Communities, Indoor Air Plus, Passive House Institute US (PHIUS) or Passive House Institute (PHI), and the Department of Energy's Efficient New Homes Program. Alternatively, a Sponsor can assemble 8 or more points from an itemized menu of individual components (e.g., high-efficiency HVAC exceeding code = 2 points, a HERS score of 70 or less for new construction = 5 points, water-saving fixtures = 2 points). Failing the Green Building Threshold means the application is declined — it is not a missed scoring opportunity.
Separately, Section 9.1's "Additional Association Requirements" impose a baseline on every development regardless of which Green Building path is chosen: low- or no-VOC paints, primers, adhesives, and sealants; Energy Star-rated refrigerators and dishwashers (100% of units for new construction, replacements for rehabilitation); and 50% or more of total lighting as high-efficiency bulbs/lamps (CFL, LED). The same section also requires broadband infrastructure installation for all developments "unless the Association has determined that the cost places an undue financial burden on the development, or the development's location or structure makes installation infeasible" — a waivable requirement, not an absolute one.
| Unit type | Minimum gross square feet |
|---|---|
| Studio | 450 |
| 1 Bedroom | 600 |
| 2 Bedroom | 750 |
| 3 Bedroom | 1,000 |
| 4 Bedroom | 1,200 |
A waiver requires a detailed written explanation with third-party justification, submitted before the application round deadline.
Disaster mitigation language covers wildfire — but IHFA has no wildfire-specific construction standard of its own
Section 9.1's threshold architectural requirements state: "Where relevant, housing must be constructed to mitigate the impact of potential disasters (e.g., earthquakes, flooding, wildfires, etc.) in accordance with State and local codes, ordinances, or other State and local requirements." That is the entirety of the QAP's wildfire-related language. This research found no IHFA-specific wildland-urban-interface construction standard — no ignition-resistant materials list, defensible-space requirement, or WUI code reference comparable to what some wildfire-exposed states have adopted in their own building codes. The requirement is a general pass-through to whatever state and local codes already apply in the development's jurisdiction, not an IHFA-authored standard. Given Idaho's real wildland-urban-interface exposure, this is worth confirming directly with the local building department for any given site rather than assuming the QAP itself sets a wildfire construction bar.
Idaho has no state prevailing wage law, and the QAP never mentions wage rates — Davis-Bacon still reaches some deals sideways
Idaho repealed its own state prevailing wage law in 1985. The U.S. Department of Labor's own published list of states without prevailing wage laws identifies Idaho by name with that repeal date. Consistent with that, a direct search of the 2026 QAP's full text found zero mentions of "prevailing wage" or "Davis-Bacon" anywhere in the document — the LIHTC program itself imposes no state-level wage floor on construction labor in Idaho.
Federal Davis-Bacon labor standards can still reach an Idaho LIHTC deal, but only through a different funding source layered on top — and the two most common companion sources behave differently. HUD's own guidance on labor standards applicability ties the Davis-Bacon trigger under the HOME Investment Partnerships Program to construction contracts covering 12 or more HOME-assisted units; once triggered, the labor standards apply to the construction of the entire project, not just the HOME-assisted portion. The National Housing Trust Fund is a separate case: HUD Exchange's own guidance on the question confirms that Davis-Bacon labor standards do not apply to the Housing Trust Fund at all — the statute that created it did not extend Davis-Bacon coverage to NHTF-funded construction. A Sponsor layering IHFA's own HOME funds into a LIHTC deal (the QAP itself flags this pairing, requiring a pre-development meeting with the Association's HOME Program Department for concurrent HOME or Housing Trust Fund requests — Section 3.1) needs to watch the 12-unit HOME threshold specifically; assuming NHTF funding carries the same trigger would overstate the labor-cost basis.
Where this goes wrong
- Assuming Idaho publishes a flat Total Development Cost or per-unit cost cap — it doesn't; cost containment works through separate fee caps (contractor, A&E, developer), a direct cost-per-square-foot scoring formula, and an in-depth review of the highest-cost 20% of applications each round.
- Using the base 14% contractor/construction-management fee ceiling when an identity of interest exists between the Sponsor, Developer, or a consultant and the contractor — that ceiling drops to 8-10% in that case, a separate and tighter limit.
- Treating Idaho's Green Building Threshold as optional or scoring-only — it is a pass/fail application threshold (Section 4.9.4); failing it means the application is declined outright, on top of and separate from the mandatory baseline requirements (low-VOC finishes, Energy Star appliances, efficient lighting, broadband) that apply to every development regardless of which Green Building path is chosen.
- Reading the QAP's disaster-mitigation language ('wildfires, etc.') as a wildfire-specific construction standard — this research found no IHFA-specific wildland-urban-interface construction standard; the requirement is a general deferral to whatever state and local codes already apply.
- Assuming Idaho has a state prevailing wage law that sets a wage floor for LIHTC construction — Idaho repealed its state prevailing wage law in 1985, and the 2026 QAP's text never mentions prevailing wage or Davis-Bacon at all.
- Assuming the National Housing Trust Fund (NHTF) triggers Davis-Bacon labor standards the same way HOME does — HUD Exchange's own guidance confirms Davis-Bacon does not apply to the Housing Trust Fund; only HOME's 12-or-more-assisted-unit construction-contract trigger reaches an Idaho LIHTC deal, and only when HOME funds are actually layered in.
- Missing that a Davis-Bacon trigger, once tripped by HOME funding, applies to the construction of the entire project — not just the HOME-assisted units — which changes the labor cost basis for the whole development, not a carved-out subset.
- Assuming a deferred developer fee can run on whatever repayment schedule the pro forma shows — absent documentation of the equity provider's own required timeframe, IHFA defaults to a 12-year repayment assumption when sizing the deal.
- HUD
- LIHTC
- State QAPs
- IRS § 42
- Housing Finance Agencies