Cost, construction type and the labor package — Nevada

Three checkpoints, and where Nevada's number actually locks

The Nevada Housing Division (NHD), a division of the Department of Business & Industry, administers the state's 9% and 4% Low-Income Housing Tax Credit programs under NRS Chapter 319, NAC Chapter 319 and IRC Section 42. The current Qualified Allocation Plan is the 2026 QAP, adopted December 24, 2025 and amended March 25, 2026. As amended, the 9% program runs on a single annual application deadline (June 15, 2026), while 4% Tax Exempt Bond applications continue on a rolling schedule tied to the Nevada Board of Finance's calendar.

Cost estimation still runs through the same industry-wide napkin-to-GMP arc every developer works — a rough screening number, an architect's concept set priced by a GC or estimator, then a hard bid. What differs from state to state is which document NHD treats as legally binding and how many times it re-checks it. The QAP is explicit: NHD completes a financial feasibility evaluation three separate times.

That last line matters. Unlike CTCAC, which re-tests eligible basis against a revised regulatory limit at placed-in-service, NHD's final checkpoint hands the controlling number to the deal's own CPA. The audit burden sits with the accountant who signs the cost certification, not with a Division re-pricing exercise — which makes picking a CPA who understands LIHTC cost certification, not just tax returns, a real decision rather than a formality.

The financial feasibility standards behind all three checks: minimum 1.15x debt service coverage on primary debt (excluding soft debt, and not applied to USDA-financed deals without Division approval), 2% annual income growth against 3% expense growth, a 7% maximum vacancy assumption, the 30% present-value rate fixed at 4%, and underwriting to the LIHTC pricing in the Letter of Intent — with a required update from the Equity Investor by the 270-day test deadline if pricing moves.

Section 6.4: a flat ceiling instead of a formula

California prices the disqualifying cost gate off a threshold basis limit that moves with unit mix, county, construction type and a menu of stacking boosts. Nevada's 9% program does something structurally simpler: Section 6.4, sitting inside the QAP's 'Pre-Scoring Threshold Requirements,' sets a flat maximum total development cost per unit, excluding land, split only by county bucket and by whether the project is Rent to Own/Tribal Housing or everything else.

A waiver exists but is narrow: 'family projects with a large proportion of 3- and/or 4-bedroom units' or rehabilitation projects whose Capital Needs Assessment documents genuinely high-cost needs — the QAP names 'significant abatement or full reconstruction' — not a project that is merely expensive. Because this sits in the threshold section, missing the cap without an approved waiver is a round-ending problem for that application, the same functional consequence as CTCAC's high-cost test even though the mechanics are completely different.

4% Tax Exempt Bond projects are explicitly excluded from Section 6.4 — but they are not cost-free. Section 8.2's discretionary scoring table for bond deals starts every project at 60 of 100 points and allows up to 40 more, and cost shows up there as a penalty rather than a gate.

Fee caps that double as scoring levers

Nevada caps the developer fee at 15%, but the base differs by credit type: for 4% deals it is 15% of Total Development Cost excluding the fee itself; for 9% deals it is 15% of eligible basis excluding the basis boost and less the developer fee. Acquisition/rehabilitation projects carry an additional constraint — they must either defer at least 40% of the developer fee, or keep the paid (non-deferred) fee under half of the hard cost per unit, whichever of the two produces the more conservative number, in the QAP's own words 'the lesser of the two options.' Any deferred fee must be paid in full by year 15 of the compliance period.

The contractor side caps at 14% for combined builder's/contractor's profit, overhead and general requirements — an increase may be considered for projects under 50 units, rural projects, or Tribal projects. Where the builder/contractor and the Applicant share an identity of interest, NHD may require an independent Estimating Consultant at the applicant's own expense, or accept a standard industry cost report showing the pricing is consistent with non-affiliated projects of the same type.

What California doesn't do and Nevada does: turn both fee caps into scoring levers. Coming in under the ceiling earns points, not just headroom under a gate.

Cost discipline pays a second time at the tie-breaker (Section 7.5). When two applications in the same set-aside account tie on points, NHD ranks them by dividing the gross ten-year LIHTC amount by Total Project Cost — the lowest ratio wins. A project requesting $8,000,000 in gross ten-year credits against $10,000,000 in total cost (an 80% ratio) beats one requesting a 90% ratio. Any application that received a threshold waiver automatically loses a tie. If that still doesn't resolve it, NHD runs a lottery under NAC 319.990.

Basis boost, alternative construction, and the energy code

Where CTCAC stacks individually-sized percentage boosts that compound or add depending on an unresolved reading of its own regulation, Nevada's Section 11 eligible basis boost is a single flat number: 130% of eligible basis, available to any project that sits in a federal Difficult Development Area or Qualified Census Tract, or that meets one of NHD's own listed criteria.

Section 4.12 gives modular and manufactured construction an explicit place in the QAP — a category CTCAC's regulations simply don't address. 'New construction projects utilizing alternative materials/methods' covers modular and manufactured housing and the conversion of storage containers, provided the result meets International, State and Local building codes. Minimum unit sizes apply — 320 square feet for a studio, 640 square feet for a one-bedroom, outer dimensions — and a developer proposing this category for special needs housing must show prior experience managing at least 40 units of special needs housing, verified no less than 30 days before the application deadline. Rent-to-Own projects using this category are limited to the 10/5 preference points only, foregoing other scoring paths available to a conventional new-construction application.

Whether factory-fabricated modular labor is covered by NRS Chapter 338 prevailing wage the way CTCAC's coverage rules do for California modular deals is not addressed anywhere in the QAP or the Labor Commissioner's own handbook — this research did not locate a Nevada-specific determination on the question either way, so treat it the same way the California guide treats its own unresolved modular-labor question: get an answer from counsel or the Labor Commissioner before pricing a savings case on it.

Energy code compliance is a threshold item, not just a scoring one. New construction must meet the International Energy Conservation Code as locally amended, at minimum an IECC edition adopted after 2021, validated by a third-party vendor with credentials such as ENERGY STAR certification, approved by and unaffiliated with the Division. Acquisition/rehabilitation and rehabilitation projects must instead show at least a 20% improvement in HERS rating (per RESNET) over the pre-rehabilitation baseline, certified by a HERS Rater or Rating Field Inspector.

Rehabilitation scope has its own hard-cost floor: outside the acquisition/rehab threshold exceptions, a Rehabilitation Project must document at least $30,000 per unit in hard costs, excluding construction overhead, general requirements, reserves, parking lots/carports, landscaping/irrigation, pools and spas, recreational courts, garden walls and gates, and non-residential buildings. USDA-RD projects use a different floor — the greater of $10,000 per unit or the applicable code minimum.

The labor package doesn't attach the way it does in California

California's Labor Code §1720(b) triggers prevailing wage on funding source alone — a discounted land conveyance, a waived impact fee, a residual receipts loan — regardless of who owns the finished building or who signs the construction contract. Nevada's Chapter 338 is built on a different axis entirely, and the difference is the single most consequential fact in this phase of a Nevada deal.

NRS 338.010 defines 'public work' as a project financed in whole or part from public money for ten enumerated categories: public buildings, jails and prisons, public roads, highways, streets and alleys, public utilities, publicly owned water mains and sewers, public parks and playgrounds, public convention facilities, and a catch-all for 'all other publicly owned works and property.' Every category on that list describes publicly owned infrastructure. 'Public body' is defined separately, at NRS 338.010(18), as the State, a county, city, town, school district or other political subdivision 'sponsoring or financing a public work.'

The Office of the Labor Commissioner's own Public Works and Prevailing Wage and Apprenticeship Utilization Act Handbook (effective July 1, 2026) operationalizes those definitions into a plain rule: prevailing wage applies to 'every contract over $100,000 to which a public body is a party.' That is a contracting-party test, not a funding-source test. A privately owned LIHTC apartment building, capitalized in part with NHD gap financing, HOME funds, or a city loan but built under a GC contract signed between the developer and the contractor — with no public body as a signatory — does not fall neatly inside any of the ten 'public work' categories on the statutory text alone.

The clearest evidence for that reading is that the Legislature had to write an express carve-in for one specific financing path. NRS 279.500 provides that when a redevelopment agency extends financial assistance exceeding $100,000 to a private developer, the agency's agreement must subject the project to NRS 338.013 through 338.090 'to the same extent as if the agency had awarded the contract.' That extension would be unnecessary if ordinary publicly-financed, privately-contracted projects were already covered — its existence is itself evidence that they generally are not, absent a comparable statutory bridge. This is a reading of the statutory text and the Labor Commissioner's own guidance, not a substitute for a project-specific coverage determination; get one in writing before relying on it for a specific deal.

One procedural fact worth knowing before assuming litigation risk drives compliance: NRS 338.015 vests enforcement of the prevailing-wage statute in the Labor Commissioner, and the mechanics in NRS 338.060 and NRS 338.070 run through that office and the awarding public body — the one private civil action written into the chapter, NRS 338.016, runs the other direction, letting a losing bidder sue after the Labor Commissioner has already assessed a penalty against a competitor. This research did not locate a definitive Nevada appellate decision resolving whether an individual worker has an independent right to sue a developer or contractor directly under NRS Chapter 338 — get a current answer from counsel rather than assuming either way. Compliance risk in Nevada runs primarily through a regulatory enforcement channel; confirm that hasn't shifted before treating it as settled.

None of that displaces federal law, which attaches on its own terms regardless of what NRS 338 does. HUD and USDA program dollars carry Davis-Bacon requirements that are portable to every state, Nevada included, and worth modeling as an independent layer from day one.

The practical synthesis: a conventionally structured Nevada 9% or 4% deal — private ownership, a privately negotiated GC contract, NHD credits plus a bank loan and soft NHD/HOME gap financing — is less likely on the statutory text to trigger NRS 338 than an equivalent California deal is to trigger Labor Code §1720. But the moment a redevelopment agency, a public housing authority, or any other public body becomes a party to the construction contract, or a federal HOME/CDBG/Section-8/NAHASDA unit threshold is crossed, the calculus flips completely and full prevailing-wage compliance attaches. Answer the 'is a public body a party to this contract' question, source by source, before the budget locks — not after a GC pricing exercise turns up the answer.

The size of the pool this competes for, and the order to run this in

Those numbers set the scale a Nevada developer is actually underwriting against. A $1,500,000 per-developer cap against an estimated $14.6 million statewide pool means a single developer can be capped at roughly 10% of the entire state's annual 9% authority — cost discipline in this phase isn't an abstraction, it's the difference between fitting inside that allocation and not.

Fees attach at every stage and are non-refundable: $4,000 application fee for 9% credits, $5,000 for 4% Tax Exempt Bond deals; a reservation fee equal to 10% of the tax credit reservation (5% for a standalone nonprofit sponsor, payable within six months); a $4,000 Carryover Allocation fee; a $6,500 cancellation/reallocation fee; $1,300 to reissue an 8609 for reasons outside the Division's control; and an annual $60-per-unit compliance monitoring fee ($80 for Income Averaging projects) starting at placed-in-service.

Replacement reserves are a separate, ongoing capital line worth underwriting alongside the ceiling itself: $250/unit/year for senior projects of either type, $300/unit/year for other new construction, $325/unit/year for other acquisition/rehab, with additional documentation required to exceed those minimums by more than 20%.

One honest gap: this research did not locate a Nevada-specific equivalent to California's Terner Center prevailing-wage-premium study or the SDHC/BAE construction-type cost study — no comparable third-party dataset breaking down Nevada LIHTC construction cost by region, construction type or labor status was found. Section 6.4's own ceilings, a project's GC's current local bid data, and NHD's own historical Sources & Uses records (available on request, not published in the QAP) are the real benchmarks available today — not an outside study standing in for them.