"UHC doesn't publish a per-unit total development cost cap the way some states do — so what actually holds costs down, what are the real developer and contractor fee ceilings, is green building mandatory or just scored, and does prevailing wage reach my contractor at all?"
No per-unit or total development cost cap — cost is controlled through Credit Efficiency scoring and discretionary reasonableness review instead
This research found no fixed Total Development Cost ceiling and no flat per-unit dollar cost cap anywhere in the 2027 QAP — a real difference from states that publish an explicit TDC-per-unit limit table. In its place, UHC uses two mechanisms. First, a relative "Credit Efficiency" scoring criterion measures each Application's federal credit request per LIHTC bedroom and per LIHTC unit against "the average of the medians of the two previous rounds, plus an inflation factor based on the Consumer Price Index for the prior year ... all items less food and energy," republished each round as Exhibit 8E (2027 QAP, Secondary Selection Criteria §E, p. 74). Second, UHC retains open-ended discretion at Application and at Final Cost Certification: "The amount of credits awarded may be decreased below the amount requested if project costs are not considered reasonable for affordable housing" (2027 QAP, Exhibit 4A, p. 111).
| Credit request vs. rolling average | Points |
|---|---|
| ≤95% of average | 12 |
| 95.1%-105% of average | 9 |
| 105.1%-115% of average | 6 |
| 115.1%-125% of average | 3 |
| ≥125.1% of average | 0 |
| 125.1%-135% of average (20-30% Basis Boost projects only) | 3 |
2027 QAP, Secondary Selection Criteria §E, pp. 73-75. Scored separately for credit-per-bedroom and credit-per-unit, averaged, then multiplied by the criterion's weight of 20 (max 240 points of the QAP's ~6,770-point total).
Developer, contractor, and general requirements fee caps
| Fee | Cap |
|---|---|
| Acquisition Fee | 6% of building acquisition cost (purchase price minus land value and related-party fees/commissions) |
| General Requirements | 7% of direct construction costs in Eligible Basis (additional fee may sit outside basis); independently capped at 7% of on-site and building costs under Exhibit 4E's itemized list |
| Builder Profit and Overhead | 5% of direct construction costs in Eligible Basis (additional fee may sit outside basis) |
| Developer Fee — 1-40 units | 15% of Qualified Basis (competitive/acquisition fee) / 17% (4% "maximizing" fee) |
| Developer Fee — 41-100 units | 12% / 14% |
| Developer Fee — 101-200 units | 11% / 13% |
| Developer Fee — 201+ units | 10% / 12% |
2027 QAP, Developer, Contractor and General Requirement Fee Limits, pp. 30-31; Exhibit 4E, p. 118.
Deferral rules layer on top of the fee caps: a maximum of 50% of Developer Fee/Owner Equity may be deferred at Application as a standard rule. A project electing the higher 4% "maximizing" fee must first meet the standard 50% deferral, then contribute the entire additional fee above that original maximum at or below the Applicable Federal Rate. Separately, for 4% Housing Credit projects also drawing State Tax Credit, UHC requires a minimum deferred-fee floor of $1,000,000 or 30% of total developer fee, whichever is less, shown as a source of permanent financing (2027 QAP, Developer Fee/Owner Equity §A, p. 31; State of Utah Housing Credits, p. 78).
General Requirements is a defined, closed list — supervision and job-site engineering, job-office expenses, temporary buildings/utilities/roads, construction equipment rental, debris cleanup, first aid, and site security/insurance — drawn directly from HUD Manual 4450.1. "Items not listed above, including, but not limited to, salaries of owners, partners or officers of the general contracting firm are not allowed under General Requirements" (2027 QAP, Exhibit 4E, p. 118).
Green building: a mandatory Energy Star baseline, then optional certifications for a modest number of points — with a real clawback if claimed but not delivered
Green building in Utah is not simply a scored, optional item — it's mandatory at the baseline level. The QAP states: "All new construction must be Energy Star Certified using the most current Energy Star Certification process" and "All rehabilitation projects that are eligible for Energy Star Certification must be Energy Star certified," with buildings ineligible for standard Energy Star required to document an equivalent level of energy savings instead (2027 QAP, Sustainable Design §B, p. 41). The Energy Star Certification itself "requires a 15% improvement over Utah's current residential energy code." Buildings that can't pursue standard Energy Star may instead demonstrate equivalency through one of three defined metrics: an estimated Energy Star Score of 75 or higher; a whole-building site energy use intensity (EUI) at least 35% better than the national median of 59.6; or an EUI below the ASHRAE Standard 100 threshold for Utah's climate zone 5B — 41 for a 2-4 unit building, 32 for a 5+ unit building (2027 QAP, Sustainable Design §B, pp. 41-42).
Beyond that mandatory floor, an "Energy Certification" scoring category awards up to 5 of the 530 Project Characteristics points for pursuing a higher-tier certification: "Enterprise Green Communities Criteria, Energy Star NextGen, DOE Efficient New Homes Certification, Green Globes, LEED, NGBS, or Passive House" (2027 QAP, Secondary Selection Criteria §B, item 4, p. 67; see also p. 44 for the specific certification levels UHC accepts within each program). This is a genuinely optional, minor scoring add-on — not the mandatory Energy Star requirement itself.
There is a real financial consequence for claiming a certification for points and then not delivering it: for Enterprise Green Communities specifically, "[i]f the project fails to achieve a successful certification from the Enterprise Green Communities Criteria, at the time of Final Cost Certification, UHC may reduce the amount of Housing Credit up to an amount that when multiplied by the purchase price of the credits equals the full amount of Developer fee" (2027 QAP, Sustainable Design §C, p. 43) — a clawback sized to wipe out the entire Developer Fee's economic value, not just the points claimed.
A related, cost-relevant design floor sits in the same Sustainable Design section: minimum Net Residential Square Footage by unit type (375 sf studio up to 1,100 sf for 4-bedroom units), applicable to both 4% and 9% projects, with a waiver path only for Rehabilitation and Supportive Housing projects (2027 QAP, Sustainable Design §A, p. 41).
Prevailing wage: Utah repealed its state law in 1981 — but HOME (not the National Housing Trust Fund) can still trigger federal Davis-Bacon
Utah has no state prevailing-wage law reaching LIHTC construction. The U.S. Department of Labor's own state prevailing-wage list states simply: "Utah — repealed in 1981." A direct search of the full 2027 QAP's roughly 7,246 extracted lines of text turned up zero mentions of "prevailing wage" or "Davis-Bacon" anywhere in the document — UHC imposes no state or QAP-level wage mandate on its own Housing Credit construction contracts.
That doesn't mean Davis-Bacon can never reach a Utah LIHTC deal — it can, independently, through certain federal funding layered into the capital stack. Under 24 CFR §92.354, a construction contract covering 12 or more units assisted with HOME Investment Partnerships Program funds must include Davis-Bacon prevailing-wage provisions covering every laborer and mechanic on that entire contract (not just the HOME-assisted units) — a threshold that counts only HOME-assisted units to determine whether it's crossed, but that then reaches the whole contract once it is. Utah's HOME grantee is the Olene Walker Housing Loan Fund (OWHLF), part of the Housing and Community Development Division within the Governor's Office of Economic Development — the same office that directs the state's bond volume-cap allocation discussed in Phase 4.
A common point of confusion is worth correcting directly: HOME and the National Housing Trust Fund (NHTF) are not equivalent on this point, even though OWHLF also serves as Utah's NHTF grantee. NHTF-assisted developments are not subject to Davis-Bacon prevailing-wage requirements at all — 24 CFR Part 93 (the NHTF regulations) contains no Davis-Bacon provision comparable to HOME's §92.354, and HUD's own program guidance confirms NHTF projects are instead subject to Section 3 economic-opportunity requirements (24 CFR Part 135), not prevailing wage. A Utah developer layering HOME funds into a deal should budget for Davis-Bacon wage rates on the full construction contract once the 12-unit threshold is crossed; layering NHTF funds alone does not carry that same requirement.
Rehabilitation cost minimums
| Age of building(s) | Minimum rehab spend per unit |
|---|---|
| Pre-1940 | $50,000 |
| 1940-1970 | $45,000 |
| 1971-2023 | $40,000 |
2027 QAP, Exhibit 4A Underwriting Guidelines, p. 111. UHC applies the greater of this age-based minimum or 20% of Adjusted Basis (2027 QAP, Additional Requirements for Rehabilitation Projects §i, p. 29). "Substantial rehabilitation" generally requires replacing two or more major systems (roof, fenestration, electrical, plumbing, HVAC, appliances, etc.).
Where this goes wrong
- Assuming Utah has a per-unit or total-development-cost dollar cap like some states publish — this research found none in the QAP; cost containment instead runs through Credit Efficiency scoring and UHC's discretionary cost-reasonableness review at Application and Final Cost Certification.
- Treating Energy Star as an optional, points-only item — it is a mandatory threshold requirement for essentially all new construction and Energy-Star-eligible rehabilitation; the separate "Energy Certification" scoring category (Enterprise Green Communities, LEED, etc.) is what's optional, and it's worth only 5 of 530 Project Characteristics points.
- Claiming Enterprise Green Communities (or another) certification for scoring points without actually completing it — UHC may claw back credits at Final Cost Certification in an amount equal, when multiplied by the credit purchase price, to the full Developer Fee.
- Assuming Utah has a state prevailing-wage law that reaches LIHTC construction contracts — Utah repealed its prevailing-wage statute in 1981 and never re-enacted one (confirmed directly against the U.S. DOL's own state prevailing-wage list), and UHC's own QAP contains no prevailing-wage or Davis-Bacon language anywhere in its roughly 7,246 lines of text.
- Assuming HOME and the National Housing Trust Fund trigger federal Davis-Bacon the same way — HOME triggers it once a construction contract covers 12 or more HOME-assisted units (24 CFR §92.354); NHTF financing does not carry a Davis-Bacon requirement at all, even though both programs run through the same Utah grantee (the Olene Walker Housing Loan Fund).
- Assuming the Developer Fee percentage is a single flat rate — it's a declining scale keyed to project size (1-40 units down to 201+ units) and differs for the competitive/acquisition fee versus a 4% "maximizing" fee, which carries its own extra deferral-at-AFR-or-below condition.
- Missing that General Requirements is capped independently of the broader Contractor Fee — GR-eligible costs are limited to 7% of on-site and building costs and to the specific itemized list in Exhibit 4E; salaries of owners, partners, or officers of the general contracting firm are explicitly excluded.
- Assuming rehabilitation cost minimums are optional guidance — UHC requires the greater of the age-based per-unit minimum or 20% of Adjusted Basis, and costs proposed below that must be discussed with UHC staff before submission.
- Assuming the 4% "maximizing fee" option is free of extra conditions — taking the higher 4% developer fee percentage requires first meeting the standard 50% deferral maximum and then contributing the entire fee amount above that original cap at or below the Applicable Federal Rate.
- HUD
- LIHTC
- State QAPs
- IRS § 42
- Housing Finance Agencies