Cost, construction type, and the labor package — Puerto Rico

No hard-dollar cost cap -- a percentage-based fee structure instead

Unlike CTCAC or many mainland agencies that publish a per-unit or per-square-foot Total Development Cost ceiling by region and construction type, an exhaustive search of the 2025-QAP text turns up no such dollar figure anywhere. PRHFA instead controls cost through three other levers: (a) percentage-based developer fee and general contractor fee caps (below); (b) a discretionary Per-Unit Cost Review, under which PRHFA "may appoint an independent consultant to validate the construction or rehabilitation costs in projects that passed the basic threshold requirements" (Section 5.2.2.5); and (c) the 125-unit-per-project ceiling for the 2025 cycle (Foreword) -- a structural cost-control lever that works by capping scale rather than dollars-per-unit.

The independent Per-Unit Cost Review, when triggered, can reach site work (demolition, earthwork, drainage, pavement, curbs, sidewalks, parking, landscaping, utilities), structural/plumbing/electrical/fire-protection/vertical-transportation systems, the building envelope and thermal insulation, interior finishes and disabled-persons accessibility improvements, energy efficiency and green technologies, and construction methods, value-engineering assumptions, and cost-index factors (Section 5.2.2.5) -- a genuinely broad discretionary review, even without a published dollar benchmark to check it against.

Developer fee: 15% new construction, tiered rehab, tighter identity-of-interest caps

Deferred developer fee is allowed to fund the Operating Reserve only, repayable strictly from cash flow, only after all required replacement-reserve deposits, projected to be repaid within 10 years, and must meet IRS standards, with a statement of terms filed at application (Sections 5.2.2.3, 5.2.3.5, 5.1.5.12). PRHFA separately "reserves the right, in its sole discretion, to adjust the timing of payment of the Developer's Fee at any time to achieve or maintain a project's feasibility and long-term viability."

General contractor fee: a 14% combined ceiling on hard costs, not three stackable allowances

A written justification is required at application for any request to exceed a general-contractor-fee safe-harbor parameter, though "in no circumstance, in excess of the maximum allowable aggregate amount" (Section 5.1.5.11).

Acquisition costs and the rehab expenditure floor

Acquisition price is capped at the lesser of the sale price or the appraised value of the land and property; if the seller is a municipal or governmental entity, previously incurred and properly certified rehab costs on properties not yet placed in service count toward the acquisition price (Section 5.2.2.6). Separately, for rehabilitation to qualify, expenditures over any 24-month period must be the greater of 20% of the adjusted basis of the building or $6,000 per low-income unit, plus an inflation adjustment factor -- the standard federal IRC Section 42(e) substantial-rehabilitation-expenditure test, not a PRHFA-specific cost-containment device (Section 5.2.2.4).

Resilient construction: real post-Maria code, but no separate mandatory QAP standard

Puerto Rico's general building code -- administered through the island's building-permit office and based on the International Building Code with local amendments -- was substantially revised following Hurricanes Irma and Maria, incorporating updated ASCE 7 wind-load provisions. Flag: this research reviewed only the 2025-QAP and Annex O, not the building code itself; secondary engineering sources describe post-Maria basic wind speeds reaching roughly 185 mph in the most exposed coastal areas under the current code edition, but the exact current code edition and wind-speed maps were not independently verified against the code text in this research and should be confirmed directly with Puerto Rico's permitting authority (OGPe, Oficina de Gerencia de Permisos) before relying on a specific number.

The QAP itself does not layer a separate, PRHFA-specific mandatory hurricane-resistant construction standard on top of the general code. Resilience is instead addressed two ways. First, mandatory floodplain compliance: "Project location must be identified in the National Flood Insurance Program Map (FEMA Map) to demonstrate compliance with the Floodplain [Management requirements]... located outside the 100-year floodplain, coastal high hazard areas and if the project is located inside the 100-year floodplain, FEMA's approval letter" is a Basic Threshold requirement (Section 5.1.4.10). Second, competitive scoring: Point Ranking Category I.1.4 awards 3 points where a project either "is located outside an area where 'the geography presents localized risks'" or, if located in such an area, involves rehabilitation "to mitigate against the impacts of natural disasters," documented by "a signed certification from a qualified licensed registered architect and/or professional engineer" identifying "the specific threats affecting the site" and describing mitigation design "(e.g., floodproofing, wind proofing, earthquake retrofit, landslide control)" (Section 5.4.2).

Green building certification is mandatory, not scoring-only, and is federally driven: per Federal Register Vol. 83, No. 28 (Feb. 9, 2018), 83 FR 5844, as amended by Federal Notice Vol. 84, No. 33 (Feb. 19, 2019), 84 FR 4836, all new construction and all replacement of substantially damaged residential buildings must comply with a HUD-approved Green Building Standard, and "PRHFA has extended this requirement to every applicant under this QAP" (Section 5.1.4.20). Qualifying applicants must obtain at least one of: ENERGY STAR (Certified Homes or Multifamily High-Rise), Enterprise Green Communities, LEED, ICC-700 National Green Building Standard, or an equivalent comprehensive green building program.

In short: hurricane and seismic resistance on a PR LIHTC deal is governed by the generally applicable building code -- a real, verified, post-Maria-updated standard, but not one this QAP restates or independently tightens -- plus a hard floodplain-siting threshold, a mandatory green-building certification driven by federal HUD notice, and a scored (not mandatory) engineer's risk-mitigation certification for sites in higher-risk zones.

Labor: Davis-Bacon shows up in the QAP text -- but the scope is genuinely unclear

Section 5.5.6, "Accessibility Requirements" (part of Section 5.5, "Tax Credit Allocation"), states: "The Authority will verify the project applications for compliance with accessibility requirements as part of the Technical Review, which is required as a prerequisite to any reservation and/or award. The Authority will also cause the Applicant to comply with: Davis-Bacon and related acts (40 U.S.C. Sections 276a-276a-7); Contract Work Hours and Safety Standards Act (40 U.S.C. Sections 327-333); Copeland (Anti-Kickback) Act (18 U.S.C. Section 874 / 40 U.S.C. Section 276c); Fair Labor Standards Act of 1938, as amended (29 U.S.C. Section 201 et seq.); Section 3 of the Housing and Urban Development Act of 1968, as amended (12 U.S.C. Section 1701u)."

This list sits inside the QAP's general Tax Credit Allocation section, not inside a subsection expressly limited to projects also receiving HOME, HTF, or CDBG-MIT funds. That matters because the immediately adjacent subsection, Section 5.5.5 (Environmental Review), does carve out Tax-Credit-only deals explicitly: "Be advised that if the project only applies for Tax Credits, the ER explained in this section is not required." Section 5.5.6 contains no equivalent carve-out. Under ordinary federal law, Davis-Bacon prevailing-wage requirements are not independently triggered by the LIHTC itself -- they normally attach only when a separate federal construction-funding source (such as HOME above a unit-count threshold, or CDBG) is also part of the capital stack. Because PRHFA's own QAP text does not exempt Tax-Credit-only deals here the way it does for environmental review, this research could not confirm whether PRHFA intends Davis-Bacon compliance to reach every LIHTC award (a PRHFA policy choice broader than federal law technically requires) or whether the drafting simply assumed HOME/HTF/CDBG-MIT layering is typical for the projects PRHFA processes (many PRHFA LIHTC deals do also draw HOME, HTF, or CDBG-MIT/LIHTC-MIT funds, per the Foreword). Confirm directly with PRHFA which reading applies to a specific capital stack before pricing a labor bid.

Separately, Puerto Rico's own general labor-wage framework is the Puerto Rico Minimum Wage Act (Ley 47-2021), which lets the Commonwealth's own minimum wage govern when it exceeds the federal minimum -- set at $10.50/hour as of July 1, 2024, under that law's phased schedule -- and which created a Minimum Wage Evaluation Commission within the PR Department of Labor. This research found no currently active, distinct Puerto Rico "prevailing wage" statute for public or publicly assisted construction contracts analogous to the "little Davis-Bacon" laws some states maintain for state-funded work; PR's minimum wage law reads as a general wage floor, not a construction-specific prevailing-wage schedule. This absence was not exhaustively confirmed against the full Puerto Rico Department of Labor regulatory code, so confirm directly with the Departamento del Trabajo y Recursos Humanos whether any wage-determination rule distinct from federal Davis-Bacon applies to a given site or funding source before assuming none does.