"LHC runs both my 9% shot and a 4% bond deal out of the same QAP -- but which one is actually a competition, who issues the bonds if I go that route, and is there a Louisiana state credit stacking on top I should be modeling?"
One QAP, two federal tracks -- but only 9% is actually scored
The QAP allocates Louisiana's competitive 9% credits by ranking applications within named pools -- Qualified Non-Profit/CHDO, Rural Rehabilitation, Rural New Construction, Urban Rehabilitation, Urban New Construction, Choice Neighborhood Initiative, and an Elderly set-aside -- using the Selection Criteria in Appendix A (Section II.A). The 4% Credits/Bonds track runs through the same document but is structurally different: "Applicants requesting to finance projects with tax-exempt bonds must complete (i) a separate bond and underwriting application, (ii) the Cost Containment Template, and (iii) if other LHC funds are requested, a Lien Payment Priority Spreadsheet," and applications "may be submitted at any time during the calendar year" (Section III.C). The QAP is explicit about what that means competitively: "While an award of 4% Credits is not competitive, LHC will verify that all projects have the appropriate development team in place, meet all threshold requirements, and meet LHC's underwriting requirements" (Section III.C). LHC still retains full discretion to reject a bond deal that fails threshold, and every project regardless of track -- including bond-financed projects -- must clear a minimum Selection Criteria score of 40 points (Section IV.A.17).
| Track | Rationing mechanism | Application timing | Per-project cap | Per-developer cap |
|---|---|---|---|---|
| 9% Credits | Competitive: ranked by pool against Appendix A Selection Criteria; one funding round per year | 2025 round: Pre-submission March 24; final submission May 30; reservation October 8 | $1,000,000 (rural parishes) / $1,500,000 (8 metro parishes) | $2,000,000 (rural) / $3,000,000 (metro); no developer over $3,000,000 total |
| 4% Credits/Bonds | Non-competitive/as-of-right once threshold and underwriting requirements are met; "not competitive" per LHC's own text | Year-round; must reach LHC at least 60 days before the Board meeting considering the bond financing | No LHC-stated dollar cap on the LIHTC amount; bond volume-cap availability is the real constraint | No LHC-stated per-developer cap found in this research |
2025 QAP as Amended (01-13-26), Section II.A-B (9% pools and caps), Section III.B-C (process and timing), Section IV.A.17 (40-point minimum applies to both tracks).
No Louisiana state tax credit exists today -- a 2021 bill stalled in committee and never passed
House Bill 685 of the 2021 Regular Session (by Rep. Candace Newell) would have enacted R.S. 47:6042 to create a Louisiana state low-income housing tax credit stacked on top of the federal credit: "the amount of the state credit for each of the first three years, calculated for the month in which the project is placed in service, shall equal nine percent of the federal credit amount determined pursuant to 26 U.S.C. 42(b)," dropping to three percent in the fourth year. To qualify, a project would have needed to sit in an enterprise zone, include material non-profit participation, provide resident job training, and include tenants in project governance through a limited equity housing cooperative -- with total credits capped at $1 million per year, certified by LHC and granted by the Department of Revenue on a first-come, first-served basis, and the whole program set to sunset after December 31, 2027.
None of that ever became law. The bill's own official status history on the Louisiana Legislature's website shows it was read by title, referred to the House Committee on Ways and Means on April 22, 2021, and last acted on with "Pending House Ways and Means (Considered 5/11/21)" -- it was never reported out of committee, never reached a House floor vote, never went to the Senate, and was never signed into law. Consistent with that, a direct text search of the current amended QAP and the 2026 LIHTC Program Compliance Manual found zero references to a state tax credit, to R.S. 47:6042, or to any state-credit stacking mechanism. The R.S. 47:6042 slot the bill would have occupied is today used by an unrelated, already-enacted statute -- a nonrefundable credit for donations to qualifying foster care charitable organizations -- confirming the housing bill's proposed section number was never actually claimed by that bill. Treat any claim that Louisiana has a state LIHTC-equivalent credit as unconfirmed unless a specific, currently effective enactment can be produced; this research found none.
The federal aggregate-basis bond test: Louisiana's QAP is silent -- no LHC administrative cap the way Georgia has one
A 4%/bond deal must independently satisfy the federal aggregate-basis test under IRC §42(h)(4)(B): historically, at least 50% of a project's aggregate basis had to be financed with tax-exempt bonds, and the 2025 One Big Beautiful Bill Act (Pub. L. 119-21, §70422(b)(1)) added a more favorable 25% alternative (at least 5% of aggregate basis in newer bonds) for bonds issued after December 31, 2025. Unlike Georgia, which imposes its own flat 30% administrative ceiling regardless of which federal test technically applies, a direct text search of Louisiana's current amended QAP and its 2026 LIHTC Program Compliance Manual found no mention of "aggregate basis" as a percentage test, no reference to OBBBA or "One Big Beautiful Bill," and no reference to Pub. L. 119-21 anywhere in either document. Louisiana deals appear to rely purely on the federal test as currently written, with LHC imposing no additional or tighter administrative cap of its own -- meaning a bond issued after December 31, 2025 should be able to use the new 25% alternative test in Louisiana without running into a separate, lower state ceiling. Confirm this reading with bond counsel before relying on it for a specific deal, since the absence of QAP language is being read here as "no additional state restriction," not as an explicit LHC statement to that effect.
Choosing 9% vs. 4%/Bonds vs. a hybrid strategy
Because both tracks share one QAP, one set of threshold requirements, and one underwriting section, a Louisiana developer can pivot between 9% and 4%/Bonds more easily on paper than in a state that splits the two programs across separate agencies. In practice the real tradeoff is capacity and timing, not paperwork: 9% credits are scarce and genuinely competed for, with hard per-project and per-developer dollar caps that make them a poor fit for a large deal; 4%/Bonds credits carry no LHC-stated dollar ceiling on the credit itself, but depend entirely on securing a private-activity bond volume-cap allocation from the Governor -- a discretionary, deal-by-deal process with allocations that expire if unused by June 30. A hybrid approach -- applying for 9% while keeping a bond-financed fallback in reserve -- is procedurally possible under this QAP, but a team pursuing it should engage LHC and, separately, the Governor's office / State Bond Commission process on bond capacity early, since nothing in the QAP guarantees volume-cap availability on a 9%-competition timeline.
Where this goes wrong
- Assuming Louisiana's 4%/Bonds round is scored and ranked the way its 9% round is -- LHC states directly that "an award of 4% Credits is not competitive," though the same threshold, underwriting, and 40-point minimum score requirements still apply.
- Assuming Louisiana reserves a fixed statutory percentage of its bond ceiling for housing the way some other states do -- this research found no such dedicated housing share; the Governor allocates the ceiling deal-by-deal via individual Executive Orders under Act No. 51 of 1986.
- Treating the "Louisiana Housing Finance Agency" as a currently active, separate bond issuer alongside LHC -- it was merged into LHC by Act 408 of the 2011 Regular Session and no longer exists as an independent entity.
- Assuming Louisiana has a state low-income housing tax credit stacking on top of the federal 9%/4% credit -- HB 685 (2021 Regular Session) proposed one but stalled in the House Ways and Means Committee (last action: "Considered 5/11/21") and was never enacted; the current QAP and LIHTC Manual contain no reference to any state credit.
- Citing "R.S. 47:6042" as Louisiana's state housing tax credit statute -- that section number is currently occupied by an unrelated, already-enacted foster-care charitable-organization tax credit; the housing bill that would have used that number never passed.
- Restating the federal aggregate-basis bond test as though Louisiana imposes its own tighter administrative cap the way Georgia does at 30% -- a direct search of the current QAP and 2026 LIHTC Manual found no LHC-specific aggregate-basis percentage and no mention of OBBBA or Pub. L. 119-21 anywhere in either document.
- Treating the January 13, 2026 QAP amendment as a minor housekeeping update -- it substantively rewrote the resiliency/flood threshold requirement mid-cycle (see Phase 6) and should be re-read in full, not skimmed for a changed date stamp.
- Assuming the current "2025 QAP" is stale because it isn't labeled "2026" -- as of this research (September 2026), the 2025 QAP as amended January 13, 2026 is LHC's own currently published governing document; no separately published 2026 QAP was found.
- Assuming a bond volume-cap allocation, once applied for, is guaranteed or open-ended -- each Executive Order allocation is valid only for the specific bond issue described and only through June 30 of that ceiling year; unused amounts revert to the state on July 1.
- Assuming the Qualified Non-Profit/CHDO Set-Aside (at least 10% of the state's LIHTC housing credit ceiling) is a bond-track mechanism -- it is defined and operates within the 9% competitive pools (Section II.A.1), not as a separate 4%/Bonds set-aside.
- HUD
- LIHTC
- State QAPs
- IRS § 42
- Housing Finance Agencies