Construction type, cost caps, and the wage package — North Carolina

The per-unit cost ceiling moves every year — the 2026 number isn't the 2025 number

The Maximum Project Development Costs category (Section IV(C)(1)) deducts 10 points from any application listing more than a fixed per-unit amount on Project Development Costs lines 5 and 6 — the lines covering the construction contract, ENERGY STAR and green-program certifications, and other non-unique costs. The 2026 QAP sets that ceiling at $135,000 per unit generally (Chart A), or $150,000 per unit (Chart B) for five specified project types: all-detached-single-family or duplex construction, housing serving persons with severe mobility impairments, projects facing development challenges from a central-business-district-adjacent site, public housing redevelopment, and buildings combining steel and concrete construction of at least four stories.

Those numbers were $130,000 and $145,000 under the 2025 QAP — both rose $5,000 for the 2026 cycle. That year-over-year move is the point: this threshold reindexes with every QAP, and a developer working off last year's number, or a number carried in an old memo, is underwriting to a ceiling that no longer exists. Always confirm the current-cycle QAP before locking a construction budget.

A separate, larger limit applies regardless of project type: Total Replacement Costs, excluding land, cannot exceed $350,000 per unit (Section IV(C)(1)(b)). Unlike the -10-point cost-containment penalty, this cap has a waiver path — a written request filed at least 30 days before the full application deadline, documenting the project-specific circumstances driving the higher cost. Historic adaptive re-use costs are reviewed and approved case-by-case during full application review rather than measured against either fixed number.

Design Standards force a binary construction-type choice worth 30 points

Design Standards (Section IV(G)) award up to 30 points total: up to 5 for Site Layout (building placement relative to parking, amenities, and trash collection, plus how well the layout controls traffic speed), and up to 25 more from one of two mutually exclusive categories — a project can be scored under Quality of Design and Construction or under Adaptive Re-Use, never both. New construction is scored on roofline variety, siding and brick veneer variety, porch and railing detailing, and use of brick or masonry; adaptive re-use is scored on streetscape fit, post-adaptation aesthetics, and preservation of architectural features that wouldn't survive a teardown. The threshold-level design requirements in Appendix B apply to every project regardless of which 25-point category it competes under.

The Rehabilitation Set-Aside runs on an entirely different design rubric (Section IV(H)(2)) rather than the Design Standards scoring above — site amenities and common areas, building exteriors, unit interiors, mechanical systems and appliances, energy efficiency, and accessibility upgrades, evaluated as threshold requirements rather than points. A rehab deal competing in the set-aside is not scored against the new-construction/adaptive-re-use 30-point rubric at all.

Construction type also runs into hard unit caps tied to region and financing: new construction 9% Tax Credit projects are limited to 120 units in the Metro Region and 84 units in the Central, East, and West Regions, while new construction tax-exempt bond projects cap at 200 units unless NCHFA pre-approves a higher count before the preliminary application. Every new construction project, regardless of track, needs at least 24 qualified low-income units to be eligible at all.

No state prevailing wage law — the wage package depends entirely on which federal dollar is in the stack

North Carolina has never enacted a state prevailing wage statute — it's one of a small group of states with no "Little Davis-Bacon" law on the books, and no substitute requirement fills the gap. For a construction contract funded purely by state or local dollars, wage terms are whatever the awarding body chooses to write into its own contract; nothing in state law mandates a wage floor.

The Housing Credit itself — 9% or 4% — does not trigger federal Davis-Bacon requirements on its own; a Section 42 tax credit allocation isn't "federal assistance" for labor-standards purposes. What triggers Davis-Bacon is a separate federal funding or financing source layered into the same deal. HOME funds are the one most LIHTC developers will actually encounter: under 24 C.F.R. § 92.354, once a construction contract covers 12 or more HOME-assisted units, Davis-Bacon wage requirements apply to the entire construction contract — including the portions of the project not otherwise HOME-funded, not just the HOME-assisted units.

NCHFA's own 2026 QAP shows this pattern directly rather than leaving it to inference: the CDBG-DR disaster-recovery loan set-aside for Tropical Storm Helene-affected western counties (Section II(B)(3)(d)) requires recipients to comply "with Davis-Bacon wage requirements and all applicable federal and state cross-cutting provisions and reporting" — because the federal CDBG-DR dollar is the trigger, not the tax credit sitting alongside it in the capital stack.

The practical scoping question for a GC bid package is which funding sources are actually in the deal, not which credit type. A straight 9% or 4%/bond deal with no other federal dollar needs no certified-payroll line item. The moment HOME gap financing, CDBG-DR, an FHA-insured permanent loan, or a USDA Rural Development 515 loan enters the stack, wage determinations, certified payroll, and contractor pre-award conferences become real schedule and cost items — and they need to be built into the GC's bid, not added after pricing is locked.