"DCA runs 9% and 4%/Bonds through the same QAP, and a brand-new state law just capped both together at $100 million a year — if we go for 9%, are we actually shrinking what's left for everyone's 4% deals, and who even issues the bonds if we go that route instead?"
One QAP, two federal credit tracks — and Georgia's 4%/Bonds round is actually scored
The QAP defines "9% Credits" as "Federal Credit allocated on a competitive basis under the provisions of this Plan" and "4% Credits" as "Federal Credit available to Bond Financed Projects which meet the requirements of this Plan" (Core Plan, Definitions). Both run on the same Core Plan submission calendar — Pre-Application, Competitive Application, Waiver Requests, and Threshold Submission all have parallel 9% and 4%/Bonds deadlines (Core Plan, V.A.1) — and both require a completed Excel and Emphasys Core Application scored against the QAP's Scoring Criteria. That last point is the structural surprise: in many states (Kansas and Texas among them), the federal 4% credit is effectively as-of-right once volume cap clears, decided by a priority tier or a lottery, not a score. Georgia's 4% Credits/Bonds round is a real competition — DCA "will rank New Affordability and Preservation Applications separately based on Scoring Criteria specific to each competition" (Core Plan, V.B.3.ii.b.2), and ties are broken with a real tiebreaker ladder (county housing vacancy rate, then Preservation-specific factors, then bond-financing ratio, then lower Total Development Cost per unit) (Core Plan, V.D.2).
| Track | Rationing mechanism | 2026 Application/Threshold deadlines | 9% Award cap per Application |
|---|---|---|---|
| 9% Credits | Competitive score, highest score with a favorable market study wins, subject to set-asides and geographic pool targets | Competitive App. May 8, 2026; Threshold Dec. 11, 2026 | $1,350,000 (New Affordability, Metro Pools) / $1,215,000 (New Affordability, Rural Pool) / $1,270,000 (HUD Preservation) / $1,145,000 (Housing Credit & USDA Preservation) |
| 4% Credits/Bonds | Also competitive: scored, ranked, and selected through a multi-step geographic/balancing process (not a lottery or priority queue) | Competitive App. Sept. 25, 2026; Threshold Apr. 23, 2027 | Bond Allocation request capped at $25 million per Application (does not apply to Urban Housing Reservation awards); DCA reserves the right to exceed it |
Core Plan, V.A.1 (timeline), V.C.2 (award limitations).
Application and award limits apply across both tracks together: each Developer may submit no more than four Applications per Competitive Round, and no Applicant may hold a direct or indirect ownership interest in more than two selected projects per round (Core Plan, V.C.1-2).
HB 1199's new $100 million combined cap: a live 9%-vs-4% tradeoff, not two separate pools
Georgia's state Housing Tax Credit — defined in the QAP as the credit "set forth in O.C.G.A. §48-7-29 and §33-1-18" (Core Plan, Definitions) — has historically piggybacked dollar-for-dollar on whichever federal credit a project uses. In 2026, House Bill 1199 amended O.C.G.A. § 48-7-29.6 to cap the combined annual amount of state credit awarded to both 9% and 4% deals at $100 million for taxable years 2026 through 2028. DCA's own amendment memo states the change directly: the amendments "are proposed in response to the passage of Georgia House Bill 1199, which amended O.C.G.A. § 48-7-29.6 to limit the aggregate annual amount of 9% and 4% Georgia Housing Tax Credits awarded to no more than $100 million per year for taxable years 2026 through 2028" (DCA, Memorandum: 2026-2027 QAP Amendment Proposal, Aug. 12, 2026). Flag: the QAP's own Definitions section separately cites the state credit to "O.C.G.A. §48-7-29" (without the .6) — this research could not resolve that discrepancy between DCA's own two documents; treat §48-7-29.6 as the operative citation.
DCA's separately published "4% Credits/Bonds Award Process" document (Aug. 21, 2026) explains the mechanical effect: "The 9% Credit allocation is set annually based on the per capita rate set by the IRS. Therefore, 4% Credit availability will be equal to $100 million minus the amount of 9% Credits allocated. All 4% Credits/Bonds awards, including those under the urban housing reservation, are considered in this limitation." For the 2026 round, DCA states it "allocated $51,855,459 in 9% Credits, leaving $48,144,541 Credits remaining for 4% Credits/Bonds awards." Looking ahead, the same document states: "In future rounds, the Credits amount remaining for 4% Credits/Bonds awards will be $100 million minus only Credits awarded to Applications in the year's competitive round. Based on the estimated per capita rate and population, DCA anticipates receiving about $40 million in 9% Credits, leaving $60 million remaining for 4% Credits/Bonds awards."
Who issues the bonds: GHFA, Urban Residential Finance Authorities, and the Atlanta carve-out
Georgia's bond volume cap flows through a formula set in state statute, not DCA discretion. Per DCA's own Award Process document: "Per 26 U.S. Code § 146, the annual Bond allocation to each state ('State Ceiling') is equal to the state's population multiplied by the per capita rate set annually by the IRS. Per O.C.G.A. § 36-82-189, the Housing Share is equal to 42.5% of the State Ceiling. Per O.C.G.A. § 36-82-190, the urban housing reservation and local housing reservation are each equal to 19% of the Housing Share." For 2026, DCA states the State Ceiling at $1,525,870,980 (population 11,302,748 × $135 per capita, per IRS Rev. Proc. 2025-32), the Housing Share at $648,495,167, and the Urban and Local Reservations at $123,214,082 each.
| Amount | Calculation | Source |
|---|---|---|
| 2026 Georgia State Bonds Ceiling | $1,525,870,980 | 11,302,748 population × $135 per capita — 26 U.S.C. §146; IRS Rev. Proc. 2025-32 |
| Housing Share | $648,495,167 | 42.5% of State Ceiling — O.C.G.A. §36-82-189 |
| Urban Reservation | $123,214,082 | 19% of Housing Share — O.C.G.A. §36-82-190 |
| Local Reservation | $123,214,082 | 19% of Housing Share — O.C.G.A. §36-82-190 |
DCA, 4% Credits/Bonds Award Process (Aug. 21, 2026).
"DCA is entitled only to the local housing reservation for purposes of awards to 4% Credits/Bonds applications" — the Urban Reservation is decided independently by the local Urban Residential Finance Authority ("URFA"): "The local urban residential finance authority will determine awards under this Bond Allocation reservation" (Core Plan, V.B.3.i). O.C.G.A. §§ 36-82-194 and 36-82-197 additionally let DCA pull in bond capacity reallocated from the economic-development share or from the Georgia Housing Finance Agency's single-family reservation if available. This is a real structural split, not a formality: applications selected under the URFA path are excluded entirely from DCA's own geographic-limitation counts, and — since the August 2026 amendment — "Applications in the city of Atlanta are ineligible for selection" under DCA's own Non-Set-Aside Allocation Strategy (Core Plan, V.B.3.ii.b.3); an Atlanta-area project's practical path to 4% Credits/Bonds runs through URFA, not DCA directly, except as an absolute last resort if DCA can identify no other eligible Application at all (Core Plan, V.B.3.c). This exclusion is new in the August 2026 amendment — DCA's own memo states the amendment's purpose was to "[l]imit the resources allocated to Applications in the city of Atlanta by reserving all bond capacity outside the Urban Housing Reservation, and all credit capacity remaining after the Urban Residential Finance Authority (URFA) selections, for applications outside of the city of Atlanta," in order to "[p]lace stricter statewide geographic limitations on awards to ensure sufficient geographic distribution" (DCA, Amendment Memorandum, Aug. 12, 2026).
This research could not independently confirm the full statutory list of who besides GHFA and a URFA may serve as bond issuer of record (e.g., a county development authority or local housing authority) — the QAP itself only requires "bond inducement resolution from the issuing authority" at Threshold Submission (Core Plan, Threshold Criteria A.19.c) without enumerating eligible issuer types. Confirm directly with DCA and bond counsel before structuring around a specific local issuer.
How a 4%/Bonds award actually gets decided: DCA's own worked example
DCA published a step-by-step numeric walkthrough of its own Non-Set-Aside Allocation Strategy, using real 2025-round application data relabeled by county, run against the amended QAP's rules (DCA, 4% Credits/Bonds Award Process, "Example Select List Process"). The process (Core Plan, V.B.3.ii.b) runs, in order: (1) URFA makes its own selections from the Urban Reservation, uncounted in everything that follows; (2) DCA identifies the highest-scoring Application in each of its Bonds Geographic Distribution Areas to guarantee at least one per Area; (3) DCA sorts remaining Applications by score and, area by area, replaces the lowest-scoring New Affordability Application with the highest-scoring Preservation Application from the same Area until New Affordability and Preservation selections are as close to a 1-to-1 balance as funding allows; (4) county and per-Area caps (one selection per county under 400,000 population, two for larger counties and larger Areas) are checked at every step; (5) once funds run short of the next full selection, DCA fills remaining Bond/Credit capacity with the highest-scoring non-selected Application whose request fits what's left, subject to the same geographic and balancing limits, as a Final Selected Application.
| Step | What happened | Running balance |
|---|---|---|
| Funding availability | $385,000,000 total Bonds ($123,214,082 Urban Reservation); $48,144,541 total Credits | — |
| Step 1 — URFA selections | 7 Fulton County applications selected by URFA, uncounted in later balancing | $264,857,876 Bonds / $32,232,469 Credits remain for DCA |
| Step 2 — Geographic distribution | Highest-scoring Application identified in 13 of 14 Areas (12 New Affordability, 1 Preservation) | $21,826,626 Bonds / $382,700 Credits remain |
| Steps 3-12 — Balancing | Lowest-scoring New Affordability Applications progressively swapped for highest-scoring Preservation Applications in the same Area, using housing-vacancy-rate tiebreakers on ties, until 8 New Affordability and 8 Preservation Applications are selected | $11,550,455 Bonds / $936,571 Credits remain |
| Steps 13-15 — Final Selected Application | One additional Application (Walker County, Preservation) selected with Bonds/Credits fitting the remaining balance | Final: 8 New Affordability + 9 Preservation across 13 Areas, 16 counties |
DCA, 4% Credits/Bonds Award Process (Aug. 21, 2026), Example Select List Process. This is DCA's own illustrative example (relabeled 2025 data run through the amended 2026-2027 methodology), not an official 2026 award list.
Two things stand out from DCA's own example. First, a genuinely high-scoring Application can still be passed over purely on geography or county caps — the example shows several 70+ scoring Applications left unselected in Step 14 solely because their county or Area had already hit its limit. Second, ties are broken with real, county-level data DCA computed itself (e.g., "Area 9 wins second tiebreaker with lower housing vacancy rate in county (4.08%)" over an Area at 8.80%) — not by a published, static tiebreaker table.
The federal bond test: Georgia's own 30% cap already outruns OBBBA
Bond-financed 4% deals must independently satisfy the federal aggregate-basis test under IRC §42(h)(4). The longstanding rule required at least 50% of a project's aggregate basis to be tax-exempt-bond financed; the 2025 One Big Beautiful Bill Act (Pub. L. 119-21, §70422(b)(1)) added a more favorable 25% alternative for bonds issued after December 31, 2025 (at least 5% of aggregate basis financed by those newer bonds). Georgia's QAP does not restate either federal number and does not mention OBBBA, P.L. 119-21, or "One Big Beautiful Bill" anywhere in its text (confirmed by direct search of the QAP and 2026 Application Manual) — instead, DCA imposes its own flat administrative ceiling: "No more than 30% of a development's aggregate basis can be financed by tax-exempt bonds" (Threshold Criteria, Exhibits to Threshold Criteria, A.19.b).
That 30% figure is not new to the 2026-2027 cycle by coincidence with OBBBA — but it is new to this cycle. DCA's own Board-Approved QAP Substantive Changes document shows the number was lowered during drafting: "Draft 2: Additional Requirements for 4% Credits/Bonds Applications: No more than 30% of a development's aggregate basis can be financed by tax-exempt bonds (lowered from 55%)" (2026-2027 QAP Board-Approved Substantive Changes). Draft 2 is dated August 14, 2025 — after OBBBA's passage. This research could not confirm DCA's stated rationale for the change (no rationale is given in the substantive-changes document itself), so the timing coincidence with OBBBA should be treated as suggestive, not confirmed. Regardless of motive, the practical effect is the same one Colorado's regulator reached for deliberately: Georgia's own 30% ceiling already sits below both the old 50% federal floor and the new 25% OBBBA alternative, so neither federal number changes what a Georgia deal can actually do.
The state-designated basis boost — a separate lever from the federal DDA/QCT boost
Independent of any federal Difficult Development Area/Qualified Census Tract boost, Georgia's QAP lets DCA grant its own "state-designated basis boost" of up to 130% of eligible basis (minimum request 110%, must be a whole percentage point) to (a) multifamily Rural projects without DCA-administered federal funding, (b) projects in areas scoring points under Stable Communities, or (c) projects facing extraordinary, atypical circumstances — explicitly excluding "low rents, high utility costs, and proximity to a QCT" as qualifying reasons (Core Plan, V.A.4). The boost carries a real cost: DCA requires the project to defer 1% of total Developer Fee for every 1% of state-designated boost granted, unless the project brings in a new, non-Related-Party source equal to at least 30% of total Developer Fee (USDA 515 deals may request a waiver of the matching deferral).
Where this goes wrong
- Assuming Georgia's 4% Credits/Bonds round is an as-of-right queue like Kansas's or a lottery like Texas's — it is a genuinely scored, ranked competition with real tiebreakers (county housing vacancy rate among them), run through a multi-step balancing process DCA has published in full.
- Citing the original November 20, 2025 board-approved QAP instead of the amended version board-approved August 12, 2026 — the aggregate-basis cap, the Atlanta exclusion, and the geographic/county balancing mechanics all changed mid-cycle in response to HB 1199.
- Treating 9% and 4%/Bonds state credit as separate pools — HB 1199's amendment to O.C.G.A. §48-7-29.6 combines them into one $100 million/year ceiling (2026-2028); a larger 9% allocation directly and dollar-for-dollar shrinks what's left for 4%/Bonds that same round.
- Assuming DCA controls the entire state bond ceiling — DCA is statutorily entitled only to the 19% Local Housing Reservation; an equal 19% Urban Reservation is decided independently by the local Urban Residential Finance Authority (O.C.G.A. §36-82-190).
- Assuming an Atlanta-sited project can compete through DCA's ordinary Non-Set-Aside 4%/Bonds process — as of the August 2026 amendment, Atlanta applications are ineligible there except as DCA's absolute last resort; the practical path runs through URFA.
- Restating the federal aggregate-basis bond test as a flat 50% (the old rule) or 25% (OBBBA's new alternative) — Georgia's own QAP caps it at 30% regardless, a DCA administrative policy that predates and is unrelated to whichever federal number technically applies.
- Treating the state-designated basis boost as equivalent to the federal 130% DDA/QCT boost — it's a separate, DCA-discretionary mechanism with its own eligibility categories and a real developer-fee-deferral penalty (1% deferred per 1% of boost granted).
- Assuming the highest-scoring 4%/Bonds Application wins — DCA's own worked example shows 70+ scoring Applications passed over purely because their county or geographic Area had already hit its selection cap.
- Assuming the 15% 9% Credits Non-Profit Set-Aside also applies to the 4%/Bonds round — it's a 9%-only set-aside (Core Plan, V.B.2).
- Assuming a Competitive Application filed before a mid-cycle amendment is governed entirely by the pre-amendment QAP — the general rule that "requirements are based on the QAP in effect at the time of submitting the Competitive Application" (Core Plan, V.A.2) does not obviously resolve whether later-adopted selection/allocation mechanics (as opposed to submission requirements) apply retroactively to an in-flight round; confirm directly with DCA rather than assuming either way.
- Relying on the QAP's own citation of the state credit to "O.C.G.A. §48-7-29" without checking §48-7-29.6 — DCA's own amendment memo and independent legal sources point to §48-7-29.6 as the actual amended section; this research could not reconcile the discrepancy between DCA's two documents.
- HUD
- LIHTC
- State QAPs
- IRS § 42
- Housing Finance Agencies