"RIHousing publishes hard per-unit cost ceilings by building type and a sliding scale for GC and developer fees — but is Rhode Island's own prevailing wage law actually going to apply to my construction contract, or is it only Davis-Bacon if I bring in HOME or NHTF money?"
Six building types, six hard per-unit TDC ceilings
RIHousing's Program Bulletin sets a maximum "Overall TDC" per unit for each of seven building-type categories, described in the QAP as limits "based on comparisons of previous RIHousing funded projects and RS Means." These are hard ceilings tied directly to scoring: up to 25 of the QAP's points are awarded based on where a project's cost falls relative to its building type's ceiling, calculated on a "Weighted Average TDC" rather than a simple per-unit average — "([2 * TDC/unit] + [TDC/# of bedrooms]) divided by 3" — scored in $5,000 increments, with efficiency apartments counted as one-half bedroom and capitalized reserves excluded from the calculation.
| Building type | Maximum per-unit Overall TDC |
|---|---|
| Urban (includes scattered site and urban in-fill) | $440,000 |
| Suburban/Rural Cluster Subdivision (buildings under 8 units/building) | $448,000 |
| Garden style apartment up to 3 stories (no elevator) | $442,000 |
| Up to 4-story building with elevator | $470,000 |
| 4 or 5 story stick built on podium parking | $466,500 |
| Historic Mill Conversion | $469,000 |
| Preservation units utilizing LIHTC | $266,000 |
RIHousing, 2026 Developer's Handbook, Section 9 Program Bulletin, "Overall Total Development Cost Limits by Building Type."
RIHousing allows relief from the cap only for eight enumerated "extraordinary conditions," each requiring itemized, contractor-attested backup: excessive environmental remediation required by EPA, RIDEM, or the Coastal Resources Management Council; demolition of non-contributing structures to leverage historic credits; demolition of a building not originally contemplated in scope; the cost impact of "the calculation of prevailing wages"; on-site water service/treatment installation in rural locations; legal costs of a zoning-denial appeal to the SHAB, Superior, or Supreme Court; unsuitable soils (with detailed backup); and above-typical supportive-service space. Notably, prevailing-wage cost impact is explicitly recognized here as a legitimate reason a project's costs may exceed the per-unit cap — a real, citable acknowledgment that RIHousing expects prevailing-wage labor costs to sometimes push a project above its own TDC ceiling.
General contractor fees: a sliding scale by construction value, not a flat percentage
| Construction value | General Requirements | Builder's Overhead | Builder's Profit |
|---|---|---|---|
| Up to $1 million | 8% | 2% | 9% |
| $1-2 million | 7% | 2% | 8% |
| $2-3 million | 7% | 2% | 8% |
| $3-4 million | 6% | 2% | 6% |
| $4-5 million | 6% | 2% | 5.5% |
| Over $5 million | 6% | 2% | 5% |
RIHousing, 2026 Developer's Handbook, Section 9 Program Bulletin, "General Contractor Fees." Builder's Overhead is flat at 2% across all tiers; General Requirements and Builder's Profit slide down as construction value rises.
Where there is an identity of interest between the owner and the general contractor, "the maximum amount of builder's profit allowed is 50% of the amounts referenced above" — a real, direct haircut on affiliated-GC deals. Projects subject to Section 911 Subsidy Layering review (i.e., LIHTC combined with other HUD assistance) may face alternative, program-specific GC fee limits instead of this schedule.
Developer fee: six scenarios, more often a hard per-unit number than a flat percentage
RIHousing's Program Bulletin sets six distinct developer fee structures depending on financing type, not a single percentage of TDC. New production financed with tax-exempt bonds and 4% LIHTC only (no subordinate debt) can earn up to 15% of Fee-Based Development Costs. New production with 4% LIHTC plus subordinate debt, and separately new production with 9% LIHTC and/or other subsidy, are instead capped at hard per-unit dollar figures that vary by scattered-site vs. single-site and by bedroom count — with the option to increase to the 15%-of-base-fee level only if the excess is deferred. Preservation deals with 4% LIHTC use a base fee of 5% of acquisition plus 10% of construction/soft costs (also extendable to 15% if deferred); preservation without LIHTC rolling over existing RIHousing debt caps the fee at 10% of construction cost with a $500/unit minimum sponsor fee; and new construction without any LIHTC caps the fee at 10% of total development cost.
| Scenario | Maximum fee |
|---|---|
| I. New production, tax-exempt bonds + 4% LIHTC only, no subordinate debt | Up to 15% of Fee-Based Development Costs |
| II. New production, tax-exempt bonds + 4% LIHTC + subordinate debt | Scattered sites: $23,650/unit (0-2BR) or $25,300/unit (3BR+); Single site: $20,790/unit (0-2BR) or $23,100/unit (3BR+); may increase to 15% of base fee if excess is deferred |
| III. New production, 9% LIHTC and/or other subsidy | Same per-unit figures as Scenario II, plus an Additional Developer Fee of up to 50% of cost savings from under-budget completion or upward adjusters (balance recaptured by RIHousing) |
| IV. Preservation with tax-exempt bonds + 4% LIHTC | 5% of acquisition + 10% of construction/soft costs (Base Fee); may increase to 15% of Fee-Based Development Cost if excess is deferred |
| V. Preservation without LIHTC, rolling over RIHousing debt | 10% of construction cost; minimum $500/unit sponsor fee if substantial rehab is involved |
| VI. New construction without LIHTC | Up to 10% of total development cost (excluding reserves and developer fee) |
RIHousing, 2026 Developer's Handbook, Section 9 Program Bulletin, "Developer Fee Policy."
Disbursement is staged regardless of scenario: 25% of the non-deferred portion at closing, an additional 25% at 50% construction completion (if no material cost overruns, schedule slippage, or loan defaults), and the remainder upon the lender's acceptance of cost certification. Up to 25% of the approved base fee may be paid at closing only if the remaining fee is unconditionally and irrevocably pledged to RIHousing as a cost-overrun/completion guarantee — a conditional or revocable pledge reduces how much can be paid at closing.
Architect, Clerk of the Works, management, and financing fees are also fixed by Program Bulletin
| Fee | Rate |
|---|---|
| Architectural fees, high-rise | 7.5% of allowable construction cost (80% design / 20% construction administration) |
| Architectural fees, low-rise repetitive design | 6% of allowable construction cost (80% design / 20% construction administration) |
| Architectural fees, rehab | 7.5% of allowable construction cost (80% design / 20% construction administration) |
| Clerk of the Works | 2.5% ($500K-$2M) / 2.0% ($2M-$5M) / 1.5% ($5M-$10M) / 1.25% (over $10M) of construction cost less contingency |
| Management fee (base + bookkeeping) | 1-40 units: 7.0% total; 41-60 units: 6.0% total; 61+ units: 5.5% total |
| 1st mortgage financing fee | 2% of the first $5,000,000, 1% thereafter (min. combined origination/underwriting fee $20,000 if loan is under $1,000,000 or there is no first mortgage) |
| Bond premium | 0.60% (minimum) to 2.5% (maximum) of construction cost, plus a 1% surcharge per month beyond one year |
RIHousing, 2026 Developer's Handbook, Section 9 Program Bulletin.
Green building: a mandatory efficiency floor, plus a separate, scored ceiling — not the same thing
RIHousing layers green building requirements in two distinct tiers that are easy to conflate. The mandatory floor sits in the Underwriting Guidelines and Development Standards, not the QAP's scoring table: "R.I. Residential New Construction (RNC) Tier I standards under Rhode Island Energy's program guidelines are the baseline requirement of RIHousing's design and construction guidelines," applying to new construction and gut rehabilitation and including "compliance with current Energy Star residential or multifamily programs." Separately, "applicants are required to provide all-electric equipment and appliances or be electric-ready" as a baseline (moderate rehab may seek a case-by-case exemption), and new construction roofs must be built "PV ready" (conduit pathways, breaker capacity, upsized bus bar) even where panels aren't installed. Near flood plains, RIHousing also mandates HUD-aligned flood resilience minimums, including a Design Flood Elevation no lower than 2 feet above the FEMA Base Flood Elevation.
Under the 2026 QAP (the document that governed the round that already completed in April 2026), the scoring table layers a higher bar on top of that mandatory floor: up to 14 Sustainability points, broken into 3 points for achieving RNC Tier II and Energy Star 3.1 standards (a higher tier than the Tier I baseline), 2 points for being fully all-electric with all systems and appliances (beyond the baseline's all-electric-or-electric-ready option), 3 points for Net Zero or Passive House certification, up to 3 points for photovoltaic or other renewable systems sized to cover 50%, 100%, or a full net-zero share of common-area/site electric load, and 3 points for avoiding destruction of fields, forests, or agricultural land (or a qualifying cluster development). Enterprise Green Communities appears only in the Underwriting Guidelines' list of "strongly encouraged" design resources, not as a named, separately-scored QAP category, and LEED is treated the same way — the Guidelines specifically note that owners pursuing LEED "shall demonstrate that their project is cost-effective and shall seek non-federal or state funding for all third-party verifications and commissioning," meaning RIHousing itself does not fund LEED certification costs or score it directly.
This scoring table is already changing. A 2027 Qualified Allocation Plan released in draft form ("DRAFT 7.31.26 for public comment") — not confirmed as finally adopted as of this research, but the plan that would govern the next funding round after the 2026 cycle's April 2026 awards — cuts Sustainability to "Up to 11 points" and drops total QAP points from 147 to 129. Comparing the two documents' own scoring letters directly: the 2027 draft keeps category A (Energy Star 3.1/RNC Tier II, up to 3 points), renumbers the all-electric category as B (2 points), and its next lettered category, C, is the PV/renewables category (up to 3 points) — the separate Net Zero/Passive House category that sat between all-electric and PV/renewables in the 2026 QAP does not appear at all in the 2027 draft's lettering. Read together with the arithmetic (3 + 2 + 3 + 3 = 11), this indicates the 2027 draft removes Net Zero/Passive House as its own scored category, while keeping Energy Star/RNC Tier II, all-electric, PV/renewables, and open-space preservation. The draft also restructures the Community and Promoting RI Workforce/Permitting categories substantially (Community drops from 13 points to 3; RI Workforce/Permitting drops from 16 to 10, adding a new "Completed plans" item), but this research could not reliably extract the exact revised sub-point values for every item in those two categories from the draft's table formatting — confirm the final point breakdown directly against RIHousing/EOH's adopted 2027 QAP once published, rather than relying on the 2026 figures in the table above for a Fall 2026 or later application.
Prevailing wage: Rhode Island has its own active law, but RIHousing's own documents never invoke it for ordinary LIHTC construction
Rhode Island does have its own state prevailing wage statute, R.I. Gen. Laws Chapter 37-13 — a "Little Davis-Bacon" law administered by the RI Department of Labor and Training's Prevailing Wage Unit. Its own definition of "public works," at § 37-13-1, is narrow and infrastructure-oriented: "any public work consisting of grading, clearing, demolition, improvement, completion, repair, alteration, or construction of any public road or any bridge, or portion thereof, or any public building, or portion thereof, or any heavy construction, or any public works projects of any nature or kind whatsoever." A direct search of RIHousing's 2026 QAP, its Underwriting Guidelines and Development Standards, and its Program Bulletin found zero mentions of RIGL 37-13 or any statement that Rhode Island's own state prevailing wage law applies to LIHTC-financed private construction. The only prevailing-wage or Davis-Bacon certification obligation actually found in RIHousing's own materials is narrower and federal, not state, and is tied to a specific funding source: for developments that received American Rescue Plan Act / State and Local Fiscal Recovery Funds, the Underwriting Guidelines require certification "that all laborers and mechanics employed by contractors and subcontractors for such projects are paid wages of at least the prevailing wage rate as determined by the U.S. Secretary of Labor in accordance with the Davis-Bacon Act (40 U.S.C. Chapter 31, Subchapter IV) as applicable to Rhode Island" — or, absent that certification, a detailed employment and local-impact report.
This leaves a real, unresolved question this research could not settle from RIHousing's own documents: whether a privately-owned, RIHousing-mortgage-financed LIHTC apartment building (with no ARPA/SLFRF, HOME, or NHTF money layered in) falls inside RIGL 37-13's "public works" definition, given that a state HFA loan is neither a public road, bridge, nor obviously a "public building." Separately, federal Davis-Bacon has its own well-established trigger, independent of anything RIHousing's LIHTC documents say, wherever a project layers in HOME Investment Partnerships or National Housing Trust Fund dollars (24 C.F.R. §§ 92.354, 93.404) — so a Rhode Island LIHTC deal combined with HOME or NHTF financing should assume Davis-Bacon applies to that funding stream regardless of RIHousing's own silence on the state law question. Confirm the state-law question directly with RI DLT's Prevailing Wage Unit and RIHousing before bidding a project on either wage assumption.
In-state contracting requirements and other construction-period terms
RIHousing's construction-period terms include a minimum rehabilitation expenditure of $15,000 per unit for acquisition/rehab deals to qualify for the credit; a requirement that "a minimum of fifty percent (50%) of the value of the construction contract shall be awarded to Rhode Island construction firms"; a 3% withholding on payments to any "non-resident contractor" under R.I. Gen. Laws § 44-1-6 until the contractor furnishes a "No Tax Due" affidavit from the RI Division of Taxation; and standard retainage terms of 5%, reducible to 2.5% at substantial completion and to 1% at occupancy.
Where this goes wrong
- Treating the Overall TDC per-unit caps as soft guidance rather than a hard ceiling — they're RIHousing's own limits (benchmarked to RS Means and past RIHousing deals) and drive up to 25 of the QAP's 147 scoring points.
- Applying a single flat GC fee percentage — General Requirements and Builder's Profit each slide down as construction value rises, while Builder's Overhead stays flat at 2% regardless of value.
- Assuming full builder's profit is available on an identity-of-interest deal — RIHousing caps it at 50% of the standard schedule when the owner and GC are affiliated.
- Assuming developer fee is a flat percentage of TDC in every scenario — several of RIHousing's six fee scenarios are hard per-unit dollar figures that vary by scattered-site vs. single-site and by bedroom count, not a straight percentage.
- Assuming Enterprise Green Communities or LEED certification itself scores QAP points — neither appears in the QAP's own 14-point Sustainability table; both are listed only as "strongly encouraged" design resources in the Underwriting Guidelines, and LEED explicitly requires the developer to find non-RIHousing funding for verification and commissioning.
- Assuming the QAP's 2-point all-electric score simply rewards meeting the mandatory baseline — the Underwriting Guidelines already require all-electric-or-electric-ready as a minimum; the 2 QAP points reward being fully all-electric across all systems and appliances plus meeting the Design and Construction Standards' energy efficiency requirements, a higher bar.
- Assuming Rhode Island's own prevailing wage law (RIGL Chapter 37-13) either clearly does or clearly doesn't apply to a RIHousing-financed LIHTC deal — its "public works" definition doesn't obviously address privately-owned apartment buildings, and RIHousing's own QAP, Underwriting Guidelines, and Program Bulletin never mention the statute; this is a real, unresolved gap, not a settled fact in either direction.
- Assuming Davis-Bacon is off the table simply because RIHousing's LIHTC documents don't broadly require it — federal Davis-Bacon still applies independently through HOME and National Housing Trust Fund financing under HUD's own regulations, regardless of what RIHousing's LIHTC-specific materials say.
- Missing that RIHousing recognizes prevailing-wage cost impact as one of only eight "extraordinary conditions" that can excuse a project from its per-unit TDC cap — but only with itemized, contractor-attested backup RIHousing accepts as legitimate.
- Scoring a Sustainability strategy to the 2026 QAP's 14-point table (including Net Zero/Passive House) without checking the 2027 draft QAP — the draft's own scoring letters show Net Zero/Passive House dropped entirely, cutting the category to 11 points, for whichever round the 2027 QAP ends up governing; confirm the adopted scoring table before building a green-building strategy around a specific point category.
- HUD
- LIHTC
- State QAPs
- IRS § 42
- Housing Finance Agencies