Cost, construction type and the labor package — Missouri

Sizing the credit: a sole-discretion test at four checkpoints, not a formula

MHDC's Underwriting Standards open with a direct disclaimer: "Meeting these standards does not constitute a representation regarding the feasibility or viability of the development and does not guarantee or imply an allocation will be made." There is no three-method sizing formula, no 50%-test, no published gap calculation in the 2027 QAP. Instead, the operative phrase — "necessary for the financial feasibility of the development" or a close variant — recurs verbatim across the 9% Credit, 4% Credit, and Tax Credit Amount provisions. The Code and the State Act require MHDC to allocate "no more than the Federal LIHTC and State LIHTC amounts, respectively, which MHDC determines necessary to ensure the financial feasibility of the development and its viability as a qualified low-income housing development throughout the compliance period," and MHDC "may reserve a lesser amount of LIHTC than the amount(s) requested, to reserve less LIHTC than would result by using an applicable fraction of one hundred percent (100%), and/or to deny approval of any LIHTC."

On the 9% side specifically, MHDC layers a headroom rule on top of the four checkpoints: the annual Federal and State 9% Credit awarded at Commission approval becomes the "Initial Approval Amount," and "the maximum amount of 9% Credit that can be allocated to any one development without further Commission approval is the Initial Approval Amount plus ten percent (10%)" — the "Maximum Credit Amount." A development can separately apply for Additional Credit if its eligible basis has increased, but only if it still meets the QAP as originally awarded, additional credit is actually available, MHDC is satisfied the increase is necessary for feasibility, and the total still does not exceed the Maximum Credit Amount. Nothing here converts the sole-discretion standard into a formula — the 10% figure only bounds how far MHDC can move within its own discretion before it needs the Commission's sign-off again.

Debt coverage: the QAP and the Developer's Guide still disagree

The 2027 QAP's Debt Coverage standard reads: "Development proposals must show stabilized debt service coverage (DSC) between 1.20 and 1.50 throughout the term of the permanent loan(s). MHDC may underwrite to the standard for MHDC debt regardless of the source. Developments will be ineligible if the DSC is below 1.00 at any point during the Compliance Period."

The practical effect: which band actually governs a given deal depends on the financing source doing the underwriting. MHDC's own text gives itself room to "underwrite to the standard for MHDC debt regardless of the source," which is exactly how a Fund Balance loan can end up held to a tighter band and a higher floor than the QAP's general 1.20–1.50/1.00 language would suggest on its own. A deal that only checks the QAP figure and skips the Developer's Guide risks modeling a coverage cushion that MHDC's own loan underwriting won't actually accept.

Developer, consultant, and contractor fee caps

"Developer Fee" is defined broadly in the 2027 QAP as "the sum of the developer fee and consultant fees including, but not limited to," development/credit, application, and historic consultants — costs a previous owner already paid are excluded even if folded into the purchase contract.

The 30% consultant sublimit is conditional, not automatic: "If the consultant is not providing development guarantees, whether to any lender or any other partner or member of the ownership entity, then the maximum allowable consultant fee cannot exceed thirty percent (30%) of the total developer fee." A consultant who is providing guarantees is not automatically subject to that 30% ceiling on the text as written — a distinction worth confirming with MHDC directly before assuming the sublimit always applies.

Contractor fees are capped in aggregate rather than fee-by-fee: "Contractor fees are limited for general requirements, overhead, and builder's profit and cannot exceed fourteen (14%) of the total construction costs less the sum of general requirements, overhead, builder's profit, bonding and permits." The 14% is built from three named sub-maximums — Builder's Profit up to 6%, Builder's Overhead up to 2%, and General Requirements up to 6% of construction costs — but the QAP caps their sum, not each piece independently at its own maximum simultaneously with headroom elsewhere. The limit must be written into the construction contract itself, and contractors must certify compliance with it.

Green building, the rehab energy audit, and the Sustainable Housing Fee

New construction must "utilize sustainable building techniques and materials to meet the current standards of one of the certification levels" of Enterprise Green Communities, any LEED rating system, or the National Green Building Standard (ICC 700-2020/NGBS) — but formal certification itself is never required: "The development is not required to receive formal certification. If not being formally certified, the development must document the pledged green building standards with pictures, provide a signed and complete scoring tool, and a brief narrative during the construction process." At least one development team member must also be a LEED AP, LEED Green Associate, or Certified Green Professional.

Rehabilitation is governed by a separate, narrower item that does not carry the same green-certification-system language at all. It requires only pre-development testing and an energy audit: "the minimum standard for energy audits is ASHRAE Level 1," prepared by an assessor certified through BPI, RESNET/HERS, or ENERGY STAR, and submitted with the initial application. The QAP does not describe rehab certification as "optional" under one of the three green rating systems — rehab's only mandatory green-adjacent obligation in the QAP is the energy audit.

The QAP's own nine-item Program Fees list — application fee, tax credit fee, appraisal fee, construction cost analysis fee, construction inspection fee, LURA recording fee, compliance monitoring fee, document revision fee, and plan review worksheet revision fee — does not include a Sustainable Housing Fee at all. The $20,000 (certified) / $7,500 (not certified) figures come from the MHDC 2027 Developer's Guide's own fee schedule, not from the QAP.

The Development Cost Minimum for rehab is fixed: "For rehabilitation developments seeking 9% or 4% Credits, the total construction costs must equal or exceed forty percent (40%) of the total replacement costs," with exceptions possible if requested at least 30 days before the application deadline. A full search of the adopted 2027 QAP found no companion "Development Cost Maximum" tied to HUD's 221(d)(3) methodology — that provision either sits in the separate Application Guide (not reviewed for this content) or has been dropped between QAP cycles, and should not be cited as current QAP text without checking the Application Guide directly.

What the QAP never says: prevailing wage

A full-text search of the adopted 2027 QAP turns up zero occurrences of "wage," "prevailing," "Davis-Bacon," or "labor standards" anywhere in the document. The federal Davis-Bacon triggers referenced here (12 or more HOME-assisted units, CHOICE Neighborhoods, Housing Choice Voucher construction/rehab, RAD, and CDBG/CDBG-DR-funded construction) come entirely from the MHDC 2027 Developer's Guide and the federal program rules it cross-references, not from the QAP itself.

Missouri's own state prevailing-wage law, RSMo Sections 290.210–290.340, defines "public works" as fixed works constructed for public use or benefit, "wholly or partially" funded by public money, and reaches contracts let "by or on behalf of" a public body (RSMo Section 290.210); the wage-rate mandate itself, including Sunday/holiday double-time, overtime past 10 hours/day or 40/week, and a $75,000 minor-project exemption, sits at RSMo Section 290.230. Both sections were last amended August 28, 2018 (H.B. 1729).

MHDC is itself a public instrumentality of the State of Missouri, but the LIHTC developments it finances are privately owned. Neither the 2027 QAP nor the Developer's Guide, nor any Missouri Department of Labor guidance located in this research, states whether MHDC financing of a privately-owned deal causes that deal to be constructed "by or on behalf of" a public body for Chapter 290 purposes. Treat this as genuinely unresolved, not as settled in either direction, until confirmed with MHDC or Missouri counsel on a specific deal structure.