Cost, construction type and the labor package — New Hampshire

Four passes, and the locked number is a dollar cap, not a limit table

Cost estimation in a New Hampshire LIHTC deal follows the same four-pass structure every LIHTC state uses, but what gets locked, and against what, differs from both California and Texas. There is no county-by-county basis-limit table here — the number a New Hampshire application is tested against is a single, statewide dollar figure computed from the project's own unit count and bedroom mix.

New Hampshire's readiness threshold makes the application-stage number more disciplined than a pure napkin figure. To be considered complete, an application must already include a detailed scope of work with cost estimates current within six months, plus schematic design plans and specifications — so the number NH Housing tests is closer to a concept estimate than a back-of-envelope one, even at the earliest competitive round.

Who is actually in the room mirrors California's list minus one role: developer project manager, architect, GC or CM preconstruction estimator, and LIHTC consultant. A labor compliance consultant only enters the picture if a federal program in the capital stack triggers Davis-Bacon — New Hampshire itself has no state prevailing-wage apparatus to staff for.

One structural question the QAP text does not resolve: whether the TDC Weighted Average ceiling is re-tested at placed-in-service, the way CTCAC re-tests California's high-cost limit against a revised, placed-in-service-year figure. The closeout package visible in the QAP (Appendix C) calls for a CPA-certified final cost certification checked for consistency with the application's Sources and Uses — that reads as a consistency check, not an explicit second pass against the $397,000/$425,000 ceiling, but the QAP does not say so outright. Confirm the actual mechanics with NH Housing's Construction Services Manager before assuming California's pattern carries over.

The TDC Weighted Average is the spine of the phase

Where CTCAC tests eligible basis against a threshold basis limit table keyed to county and bedroom count, NH Housing tests total development cost against a single blended formula, evaluated against three flat dollar ceilings that apply the same way whether the project sits in Manchester or Colebrook.

There is no regional variation in the base formula. Unlike CTCAC's per-county, per-bedroom threshold basis limit table, New Hampshire runs one statewide number for every county from Coos to Rockingham. The QAP's only nod to geography is the high-cost county carve-out below — a binary yes-or-no by county, not a continuous regional coefficient like Terner Center's California figures.

Meeting one of the seven raises the ceiling from $397,000 to $425,000 — a $28,000-per-unit swing on a formula NH Housing applies unit by unit. The application must submit thorough evidence, and NH Housing decides eligibility on review, not the developer at budgeting time.

The BABA criterion is the one most likely to appear or disappear without the developer choosing it. Applicants may not request a specific NH Housing capital subsidy source, and the QAP instructs applicants to assume the most restrictive one — typically HOME, which carries Build America, Buy America Act compliance. If BABA turns out not to be required, the project drops out of the high-cost category (back to the $397,000 ceiling) unless it qualifies on another ground; NH Housing has discretion to grant an exception to that reclassification.

The investment limit is evaluated once, at application, using projected equity pricing and NH Housing subsidy — a later equity-pricing swing does not by itself trigger a re-evaluation. That is real, stated protection against LIHTC equity market volatility between application and closing.

Cost reasonableness is tested twice: a hard cap, then a moving target

New Hampshire runs two separate cost tests out of two separate parts of the QAP, and they behave differently. One is a fixed threshold that either passes or fails an application outright. The other is a competitive, relative penalty that a developer cannot fully price until the round's other applications are in.

The second test is the harder one to underwrite to, because it is relative. A developer can sit comfortably under the $397,000 hard ceiling and still take a scoring hit if every other application in that round happens to come in lean — the benchmark is this round's own peer group, not a fixed figure published in advance. That is a genuinely different risk shape than California's high-cost test, where 30% over a published, county-specific limit is knowable the moment the year's limit memo is out.

A waiver against the hard ceiling runs through the HFA 117 Waiver Rules process — a real but discretionary path, not a formula. Treat it as an exception mechanism, not a planning assumption.

No construction-type basis-boost menu — cost relief runs through project type and geography instead

This is the sharpest structural difference from California in the whole phase. CTCAC ties basis-limit boosts directly to physical construction type and story count — Type I versus Type III, elevator-served upper floors, parking below grade. New Hampshire's QAP does none of that. There is no construction-type basis bump, no story-count trigger, and no menu of percentage boosts stacked on a base limit. The only levers that move a New Hampshire cost ceiling are the seven high-cost criteria above.

New Hampshire's building code baseline sits underneath all of this without feeding directly into LIHTC cost limits the way California's does. The state building code, administered by the State Building Code Review Board, currently adopts the 2021 International Building Code (with the 2018 International Energy Conservation Code as the energy baseline). Story and construction-type limits under that code still shape a project's design and cost — but unlike CTCAC's regulation, New Hampshire's QAP does not reference them, index a basis boost to them, or otherwise make them a scored or gated item.

That overlap is worth underwriting deliberately: a developer chasing the 2 scoring points for Passive House certification simultaneously unlocks $28,000 per unit of cost-ceiling headroom, which a HERS-only compliance path does not. Two different documents (the scoring criteria and the high-cost criteria list) reward the same design decision for two different reasons, and only one path pays both.

The labor package is almost entirely a federal question, because New Hampshire has none of its own

New Hampshire has no state prevailing-wage law. RSA Chapter 280, "Minimum Wages of Employees in Public Works," New Hampshire's own little-Davis-Bacon statute, was repealed in its entirety by Laws 1985, 117:1, effective July 13, 1985, and nothing has replaced it. Compare that to California's Labor Code §1720 machinery — the broad public-funds trigger, the six subcategories that catch donated land and below-market loans, the strict judicial construction of the narrow exemptions. In New Hampshire, that entire layer of cost and compliance risk simply does not exist at the state level.

BABA is a second, separate federal layer, and it is a materials rule, not a wage rule. The Build America, Buy America Act requires domestic sourcing of iron, steel, manufactured products and construction materials on projects funded with covered federal financial assistance — it does not set a wage floor the way Davis-Bacon does. It reaches a New Hampshire deal the same way Davis-Bacon does: through whichever HOME, HTF or other federal capital-subsidy dollars NH Housing puts into the stack, which is exactly why the QAP folds BABA compliance into its high-cost criteria list rather than treating it as a labor-standards item.

HUD Section 3 — economic-opportunity and hiring-preference requirements for residents of HUD-assisted housing and low-income area residents — shows up in NH Housing's own Underwriting Standards as a required competency area for the owner's representative, alongside Davis-Bacon and BABA. It is a contracting and hiring-preference obligation for HUD-funded projects, not a wage-rate rule, but it is a real compliance and administrative cost that a purely materials-and-wages view of "the labor package" will miss.

The practical upshot: a New Hampshire deal financed with LIHTC equity, a conventional first mortgage, and NH Housing's own state-funded Affordable Housing Fund — no HOME, HTF, CDBG or project-based Section 8 in the stack — can plausibly clear this entire phase with zero Davis-Bacon exposure. That is close to structurally impossible on a Southern California 9% deal, where Terner Center's own data puts prevailing-wage prevalence at 52.6% of 2020–2023 California LIHTC awards. Whether a specific New Hampshire deal clears it depends entirely on which capital-subsidy dollars end up in the stack, which is exactly why the QAP tells applicants to assume the worst case until financing is locked.

The structural caps that bind the budget, and the order to run this in

Where there is an identity of interest between the builder and the developer, a second cap stacks on top of the schedule above: the combined developer fee plus builder overhead, profit and general conditions may not exceed 18% of total development cost on projects with construction costs above $2.5 million, or 20% at or below $2.5 million. Separately, HFA 111.12 does not permit an identity-of-interest Construction Manager or General Contractor to participate by default — it requires a written request and case-by-case approval from NH Housing's Executive Director, a self-contained gate inside HFA 111 itself, not the HFA 117 Waiver Rules process used for the QAP's own cost ceilings.

Two different contingency numbers get conflated in practice. The developer's own construction contingency is 5% of the construction amount for new construction and 10% for rehabilitation, under the Underwriting Standards. The Construction Manager's own GMP contingency, a separate figure inside the CM's fee structure, is capped at 3.5% and may not be used to supplement general conditions or self-performed work. They live in two different documents and answer two different questions.

Bids over budget trigger a defined process, not a quiet adjustment. A GMP or bid within 10% of the application budget can be negotiated with the low bidder subject to design-team and NH Housing approval. Anything over 10% forces a meeting among the developer, architect, low bidder and NH Housing, and NH Housing can compel a redesign and re-bid at its discretion — a real schedule and cost consequence for a budget that was priced thin at application.

Modular construction gets a defined procurement rule and nothing else. Projects using modular construction must obtain three competing bids from modular contractors, the same competitive-bidding discipline applied to any other subcontractor. Neither the QAP nor the Underwriting Standards publish a modular cost-savings benchmark — the same gap California's own research corpus flags, and for the same reason: no controlling state-specific study appears to exist yet.

Two more real soft-cost lines are easy to underbudget: the LIHTC Allocation Fee runs 7% of the total LIHTC allocation amount (1% due with the application, 6% due with the final allocation package, before IRS Form 8609 is issued), and the LIHTC Upfront Monitoring Fee is a flat per-unit charge — $675 per unit for 4% LIHTC projects, $850 per unit for 9% LIHTC projects — due with the final allocation package, and does not vary by the LURA's affordability-period length.