"There's no fixed per-unit cost cap I can find, no prevailing wage law, and no statewide energy code — so what actually constrains my budget and my contractor, and does NDHFA give me any extra time given how short a North Dakota construction season really is?"
The only cost ceiling in the Plan is a floating, discretionary benchmark — not a fixed TDC or per-unit cap
Section 5 of the Allocation Plan gives NDHFA a rejection trigger, not a fixed budget line: "Agency may reject an application if: 1. The qualified basis per square foot exceeds 110% of the median qualified basis per square foot of selected projects in the previous two years." The dollar figure that implements that formula is republished with every cycle — "Maximum qualified basis per square foot: $468.25" under the 2026 Plan, recalculated to "$355.79" under the 2027 Plan. This research could not determine from the Plan text alone what specifically drove that year-over-year change (it depends on the cost composition of whichever projects were actually selected in the trailing two-year window, not necessarily on construction-cost inflation or deflation); the only safe practice is to obtain the current cycle's published figure directly from NDHFA rather than reuse a prior year's number. Beyond this floating per-square-foot benchmark, no separate fixed per-unit or aggregate total-development-cost dollar cap was found in either the Allocation Plan or the Compliance Manual.
| Cycle | Published maximum | Basis for the figure |
|---|---|---|
| 2026 Allocation Plan | $468.25/sf | 110% of the median qualified basis/sf of projects selected in the two prior years |
| 2027 Allocation Plan | $355.79/sf | Same formula, recalculated against a new trailing two-year window |
Agency "may" reject an application exceeding this figure — a discretionary trigger, not an automatic hard cap.
Developer and contractor fee caps, and how the deferral tiers key off the 4% track's higher ceiling
Developer fee is capped at 15% of total eligible basis for 9% deals and 30% for 4% deals, with the acquisition-portion fee separately capped at 5% of acquisition basis on either track, and consultant/Identity-of-Interest fees counted toward the cap. Where the Developer and the contractor are the same or a related entity, the combined ceiling rises only modestly — to 20% of total eligible basis on the 9% track, 35% on the 4% track. Immediately after describing the 4% fee rule, the Plan lays out deferral tiers: "If Developer fees... are greater than 15% but less than 25% of total eligible basis... Developer fees more than 15% of total eligible basis must be deferred... If Developer fees... are equal to or greater than 25%... Developer fees more than 10% of total eligible basis must be deferred." Because these tiers reference thresholds (15%, 25%) that only become reachable under the 4% track's 30%/35% ceilings — a 9% deal is already hard-capped at 15% — they read as calibrated specifically to the 4% Credit fee structure rather than as a freestanding overlay on the flat 9% cap; confirm this interpretation directly with NDHFA before finalizing a 4% deal's sources and uses.
| Fee component | Individual cap | Combined ceiling |
|---|---|---|
| Contractor's Profit | 6% | One bucket may exceed its individual cap if others are under theirs, but all three together may not exceed 14% collectively |
| Contractor's Overhead | 2% | — (same combined 14% ceiling) |
| General Requirements | 6% | — (same combined 14% ceiling) |
All figures are percentages of hard construction costs.
No state prevailing wage law — confirmed against the U.S. Department of Labor's own list — but Davis-Bacon still reaches HOME/HTF-layered deals
The U.S. Department of Labor's own Wage and Hour Division page states plainly: "Twenty-four states do not have prevailing wage laws. These States are Alabama, Arizona, Arkansas, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Michigan, Mississippi, New Hampshire, North Carolina, North Dakota, Oklahoma, South Carolina, South Dakota, Utah, West Virginia, Wisconsin." That is corroborated structurally: the current North Dakota Century Code Title 34 (Labor and Employment) table of contents contains no chapter addressing prevailing wage at all. Multiple secondary sources report that North Dakota repealed its own prevailing-wage statute in 1995; this research could not independently confirm that specific session-law citation, so treat the year "1995" as reported but unconfirmed — the DOL listing and the absence of any current statutory chapter are the load-bearing facts here, not the repeal date.
Federal Davis-Bacon coverage still reaches a North Dakota LIHTC deal independently whenever HOME or National Housing Trust Fund (HTF) money is layered in — the Allocation Plan's own Development Team threshold requirement names it directly: an application "should demonstrate the proposed team's experience with, or working knowledge of, all federal cross-cutting requirements including, but not limited to, Section 3, Women-owned and Minority-owned Business Enterprise contracting practices, Davis-Bacon and related acts, environmental review, Section 504 and ADA requirements, lead-based paint mitigation, Uniform Relocation Act, and property condition requirements" for any Application including HOME and/or HTF funding (2027 Allocation Plan, Section 5.E.4). A LIHTC-only deal with no HOME or HTF dollars is not independently subject to Davis-Bacon under anything found in the Allocation Plan or Compliance Manual.
Green Communities is scored, not mandatory — and North Dakota has no mandatory statewide energy code to fall back on
Green building in North Dakota's LIHTC program is entirely a scoring incentive, never a threshold requirement: the 2027 Plan awards up to 5 points under "Green Communities" for meeting 10, 15, or 20 Green Communities criteria (rehabilitation projects use a 10/17-criteria scale instead), or up to 5 points for full LEED, Green Communities, or ICC 700 National Green Building Standard certification (Section 7.G). That ceiling itself moved between cycles — the 2026 Plan capped the same category at up to 7 points — so a developer working from last cycle's point values would overstate what full green certification is worth this year.
There is no mandatory floor beneath that scored incentive. The Allocation Plan's own threshold requirement on codes falls back to national model codes only where no local code exists: a project must meet "all applicable State and local codes, ordinances, and requirements as applicable, or, in the absence of a State or local building code, the International Residential Code, International Building Code... or the International Existing Building Code" (Section 5.C) — implicitly acknowledging that some North Dakota jurisdictions have no locally adopted building code at all. Separately, third-party code-tracking organizations (not NDHFA) describe North Dakota's own energy code as voluntary rather than mandatory: the Building Codes Assistance Project describes the state as "Home Rule," with local adoption voluntary and no statewide mandatory energy code, while the American Council for an Energy-Efficient Economy describes a 2021 IECC edition adopted "as its voluntary statewide code." The two trackers cite different code editions and review dates, which this research could not reconcile; a project team should confirm the actual code enforced (if any) with its own local building department rather than assume a single statewide energy-code baseline, mandatory or otherwise.
No published construction-season or winter-weather accommodation was found
Despite North Dakota's short building season, this research found no language in either the Allocation Plan or the Compliance Manual that extends any program deadline for winter weather or a shortened construction window. The Conditional Commitment expiration ("shall not be less than 60 days"), the December 15 Carryover Allocation cutoff, and the Final Allocation Package deadline (180 calendar days after the last building is placed in service, or November 15 of the allocation year for a project intending same-year placement without a Carryover) all apply on their face with no stated seasonal adjustment. The only identified route to a project-specific accommodation is NDHFA's general, case-by-case discretion clause: "Agency may modify or waive any condition of this Plan, which is not mandated by the Code, on a case-by-case basis" (Section 2.A) — a developer anticipating a weather-driven schedule risk should raise it with NDHFA directly rather than assume an automatic extension exists.
Construction-type mandates: substantial rehab floor, mandatory broadband, and incorporated Property Standards
A few construction-type requirements are hard mandates rather than scored incentives. Substantial rehabilitation requires a minimum average of $15,000 per restricted unit in hard construction costs (waivable if a Capital Needs Assessment supports a lower figure). Every project — rehabilitation or new construction — must install "Broadband Infrastructure to all units and common area community rooms," defined against the FCC's current broadband standard (25 Mbps download / 3 Mbps upload), with the project architect confirming its inclusion in the plans. Rehabilitation and adaptive-reuse projects must also comply with NDHFA's Minimum Rehabilitation and Property Standards, incorporated into the Plan by reference, curing at minimum all deficiencies identified in that document's own Section 15 upon completion, with life-threatening health-and-safety deficiencies in occupied acquisition/rehabilitation projects corrected immediately.
Where this goes wrong
- Treating the "maximum qualified basis per square foot" figure as a fixed, carried-forward TDC cap — it is recalculated every Allocation Plan cycle as 110% of the trailing two-year median of selected projects' costs and is a discretionary rejection trigger, not an automatic hard-dollar ceiling; the published figure moved from $468.25/sf (2026) to $355.79/sf (2027).
- Assuming North Dakota has a state prevailing-wage law — the U.S. Department of Labor's own published list places North Dakota among the 24 states without one, and no prevailing-wage chapter exists in the current Century Code Title 34.
- Assuming Davis-Bacon never reaches a North Dakota LIHTC deal — the Allocation Plan's own Development Team threshold requirement names Davis-Bacon and related acts directly whenever HOME or HTF funding is layered into the deal.
- Assuming North Dakota has a mandatory statewide energy code — third-party trackers describe the state's own IECC adoption as voluntary and enforced only where a local jurisdiction separately chooses to adopt it; the only energy-efficiency lever inside the LIHTC program itself is the scored (not mandatory) Green Communities category.
- Assuming every North Dakota jurisdiction already enforces a local building code — the Allocation Plan's own threshold language falls back to ICC model codes only "in the absence of a State or local building code," implying some jurisdictions have none.
- Assuming the Plan extends deadlines for a short construction season — no such language was found in either the Allocation Plan or the Compliance Manual; the standard Carryover and Final Allocation Package deadlines apply on their face.
- Applying the Developer Fee deferral tiers (defer amounts above 15%, then above 10% of eligible basis) to a straight 9% deal — they sit directly beneath the 4% Credit fee discussion in the Plan's text and reference thresholds only reachable under the 4% track's higher 30%/35% ceilings.
- Treating the 6%/2%/6% contractor fee buckets as independent hard caps — the Plan allows one bucket to exceed its stated percentage as long as the combined total across all three stays at or under 14% of hard construction costs.
- Citing the 2026 Plan's Green Communities point ceiling (up to 7 points) as current — the 2027 Plan lowered the same category's ceiling to up to 5 points.
- HUD
- LIHTC
- State QAPs
- IRS § 42
- Housing Finance Agencies