Cost, construction type, and the labor package — West Virginia

A self-derived, bedroom-by-bedroom cost ceiling -- not a HUD-linked percentage add-on

Rather than tying its cost limits to HUD's own published Total Development Cost Limits with a percentage add-on (the approach some sibling states use), WVHDF sets its "Adjusted Property Cost Limits" directly from its own analysis: "the Fund has analyzed the adjusted property costs of recently cost-certified LIHTCP properties in the State" and set limits from that analysis. Adjusted property costs are Total Property Costs net of historic tax credits, half the land purchase price (if the Reachable Green Space criterion is met, new supply only), commercial rental costs, permanent loan fees, the tax credit processing fee, the developer's fee itself, operating reserve, post-placed-in-service construction loan interest, rent-up costs and reserves, organizational costs, consultant's fee, and asset management fee reserve.

If adjusted property costs exceed the aggregated limit, the Applicant must submit a detailed, dollar-amount, line-item cost-overage explanation -- prepared by the general contractor for construction-cost overages, or by the Applicant for intermediary-cost overages -- and the Manual is explicit that "the requirement to pay Davis-Bacon wage rates is not so unique as to constitute a justification" on its own. Legitimate justifications the Fund will consider, in its sole discretion, include location in a difficult development area, site conditions, prevailing wage requirements, and rehabilitation to historical standards. Unjustified excess costs are simply cut by the Fund from Property Costs, Adjusted Basis, Eligible Basis, Qualified Basis, and therefore the Housing Credit Dollar Amount -- a designated Fund construction professional performs an independent construction costing of every selected property to verify reasonableness, for the Fund's own use only.

Builder's line items capped at 14% of hard costs -- General Requirements, Overhead, and Profit, each tracked separately

General Requirements covers supervision, job-site engineering, office and clerical expenses, temporary buildings/utilities/walkways/fencing, equipment rental outside individual trade costs, cleanup, security, and pre-construction bidding costs -- all capped inside the 6%, not layered on top of it. Overhead is the general contractor's costs not tied to direct wage or material costs. Profit is the return anticipated for the construction work given competitive conditions, on-site time, subcontractor mix, and risk. Any amount over the applicable cap in any of the three categories triggers the same Fund reduction to Property Costs, Adjusted Basis, Eligible Basis, Qualified Basis, and the Housing Credit Dollar Amount described above for cost-limit overages.

General contractors face their own gate: any GC on a WV LIHTCP property must provide acceptable financial statements to the Fund on request, and a contractor unwilling to do so "is not permitted to work as a general contractor in the LIHTCP." At the final-plans/equity-closing stage, the construction cost estimate or contract must identify the actual GC and the GC's state license number, and break out costs using at minimum the Construction Specifications Institute's 16-division MasterFormat, with Builder's General Requirements, General Overhead, and Profit each listed as separate line items.

The developer fee matrix: acquisition, rehab, new construction, and identity of interest all change the ceiling

The maximum fee is further capped at whatever amount is actually paid, earned, or recognized as income between unrelated parties for the development work -- and the fee ceiling calculation applies to the combined total of Developer's Fee plus any separately listed Consultant's Fee or other development-related cost, not to Developer's Fee alone. A construction-management fee paid to the developer for unused construction contingency also counts against the cap if the Partnership Agreement or construction documents contemplate one.

Once approved at Carryover Allocation Request (non-bond properties) or at Prior to Equity Closing (bond-financed properties), the Developer's Fee amount cannot be increased at the Allocation Request stage regardless of how property costs move -- it can only be decreased, for example if actual CPA-certified costs come in lower than anticipated, or if costs exceed the Fund's cost limits above what was anticipated at Carryover. Up to 50% of the fee may be deferred if a cash-flow test (described in Phase 5) supports repayment within 15 years; a state-designated basis boost or Fund-provided soft financing (HOME, HTF, ERA2) each independently trigger a minimum required deferral, generally calculated as the greater of (actual fee × 20% minus any shortfall from the fully allowed fee) or zero.

Green building is entirely a scored menu -- there is no mandatory third-party certification

WVHDF's mandatory Minimum Housing Standards require every property to be built or rehabilitated in compliance with the current West Virginia State Building Code family -- the International Building, Plumbing, Mechanical, Property Maintenance, Energy Conservation, Residential (1-2 family), Fuel Gas, and Existing Building Codes, plus ASHRAE 90.1, ANSI A117.1 (accessibility), and the National Electric Code -- along with the 2010 ADA Standards, Section 504, the Fair Housing Act, and the Architectural Barriers Act. That is baseline code compliance, including whatever energy code West Virginia has currently adopted; it is not a green building certification program in the LEED, National Green Building Standard, or Enterprise Green Communities sense, and this research found no requirement that a WV LIHTCP property obtain any such third-party certification.

What the Plan does offer, entirely as competitive scoring rather than a threshold requirement, is an "Energy Efficiency and Quality of Housing" menu of individually-scored items: masonry veneer exterior percentage, Energy Star-certified whole-unit HVAC, Energy Star-certified appliances (with a documented alternative compliance path via 2015 IECC or 2013 ASHRAE 90.1 performance criteria for central water heating), Energy Star-certified exterior doors and windows, roofing materials, Energy Star-certified light fixtures/ceiling fans/bath exhaust fans, siding and trim thickness and warranty, Reachable Green Space percentage, laundry provisions, interior unit square footage, high-speed internet access, landscaping cost per unit, and stove-top fire suppression.

"Green Building Training for Residential Housing" is worth up to 15 points within that same scored menu -- and it is specifically a training-attendance credit, not a building certification: the Property Contractor or a developer/co-developer principal must have attended (or commit to complete, at least 30 days before final plans and specifications) green building training relating to residential housing, approved by the Fund, with a certificate of attendance submitted. A property applying to the Top Off Set-Aside Category simply carries forward the points it earned in its original Carryover year, with no resubmission of backup documentation required. Before issuing Allocation Certifications, a Fund construction professional physically verifies that all committed energy-efficiency and quality-of-housing items were actually installed (except the training commitment) -- and failure to fulfill a committed item can result in cancellation and full return of allocated Credits.

Mountainous terrain shows up in specific site rules, not a cost-limit adjustment

WVHDF does not publish a formula-based cost-limit adjustment tied to slope, grading, or difficult topography the way it does for property type and bedroom count. What it does have are specific, real site-work rules that respond to exactly that terrain: the Reachable Green Space scoring criterion excludes any site area with a slope of 20% or greater from counting as usable green space at all, and requires handrails and/or stairs on any slope greater than an 8% grade to count as "reachable." Every new-construction property must submit an independent, professional Geotechnical Report, and final construction plans and the construction cost estimate must incorporate that report's recommendations -- meaning foundation and site-work costs driven by West Virginia's terrain are expected to show up as real, documented line items in the construction estimate rather than being pre-absorbed into a statewide cost adjustment.

Flood exposure gets separate, explicit treatment: a color FEMA FIRMette flood map is a required submission, new construction within the 100-year floodplain is permitted only in limited circumstances and must be elevated at least two feet above the 100-year floodplain, and neither Fund resources nor equity generated from the Credits may be used for site flood mitigation. And when a property's adjusted costs exceed the Adjusted Property Cost Limits table, "site conditions" and location in a "difficult development area" are both named directly, alongside prevailing wage requirements and historic rehabilitation standards, as legitimate (Fund's-sole-discretion) grounds for approving the overage -- confirming that WVHDF expects and accommodates real, site-driven cost variation case by case rather than through a published statewide add-on.

Labor: no state prevailing wage law, but Davis-Bacon and BABA both reach some West Virginia LIHTC deals

West Virginia has no state prevailing wage law currently in effect. The state's prevailing wage statute (former W. Va. Code Chapter 21, Article 5A) was repealed effective May 2016, and the U.S. Department of Labor's own current state-by-state prevailing wage listing places West Virginia in its "states without prevailing wage laws" category, footnoted exactly that way: "Effective May 2016, West Virginia's prevailing wage statute has been repealed, West Virginia Code Section 21-5A (repealed)." Legislative efforts to reinstate a state prevailing wage requirement -- including a 2021 Senate bill and a 2023 House bill -- were introduced but did not become law as of this research; the repeal remains in effect.

That repeal does not insulate every WV LIHTC deal from prevailing-wage-type labor costs, however. WVHDF's own Tax Credit Manual names Davis-Bacon directly, in the cost-limit-overage discussion, as an example of a real cost driver that is nonetheless "not so unique as to constitute justification" for exceeding the Adjusted Property Cost Limits on its own -- confirming the Fund's own staff expect Davis-Bacon wage rates to apply on at least some West Virginia LIHTCP properties. The standard federal trigger applies here as it does nationally: Davis-Bacon prevailing wages attach independently of LIHTC itself whenever a property also layers in HOME Investment Partnerships Program funds (24 CFR Section 92.354) or National Housing Trust Fund dollars (24 CFR Section 93.404), both of which WVHDF administers and both of which appear as named soft-fund sources throughout the Allocation Plan and Tax Credit Manual (HOME Program, HTF Program, ERA2 Housing Fund).

A related, separate federal requirement rides along with HOME or HTF financing specifically: the Tax Credit Manual requires that construction plans and specifications for any property with HOME or HTF financing include the required Build America, Buy America (BABA) domestic-content certification statement, and that the construction cost estimate account for the cost of meeting BABA's requirements. Neither Davis-Bacon nor BABA is triggered by the LIHTC allocation itself -- both ride in on the federal soft-funding layer, which is common enough in West Virginia deals that the Fund's own materials treat it as a foreseeable, ordinary cost item rather than an edge case.