Program election (9% vs. 4% vs. hybrid) — Maryland

One QAP, two federal tracks, and CDA wearing both hats

The Governor of Maryland has designated the Department of Housing and Community Development (DHCD) as the state's LIHTC-allocating agency; DHCD's Secretary has assigned that function to the Community Development Administration (CDA), a unit of DHCD's Division of Development Finance. CDA administers the program under the Housing and Community Development Article, §§4-101 through 4-255 of the Annotated Code of Maryland, and COMAR Title 05, Subtitle 05, Chapter 06. The 2026 Qualified Allocation Plan states the split directly: "LIHTC are reserved for eligible housing projects on a competitive basis, except those financed with tax-exempt bonds, which are awarded on a non-competitive project-by-project basis." Projects seeking the non-competitive route must still clear the Guide's Threshold Criteria and Competitive Scoring Criteria and comply with the Allocation Plan — they simply are not ranked against other applicants for a share of the state's annual per-capita ceiling.

CDA is not just the credit allocator on the bond side — it is also, itself, the bond issuer of record for Maryland's Multifamily Bond Program (MBP), which "increase[s] the construction and rehabilitation of multifamily rental housing for families with limited incomes" using tax-exempt bonds and notes that CDA issues directly, then lends the proceeds to a project at a rate based on CDA's own bond rate over terms generally running 30 to 40 years. All MBP-financed projects must be credit-enhanced to at least an "AA" rating from CDA's rating services unless CDA approves an alternative structure. A sponsor is not limited to CDA as issuer, however: the QAP separately provides for "Locally Issued Bonds" — tax-exempt bonds issued by a local jurisdiction requesting 4% LIHTC — for which "CDA will not perform the feasibility determination on behalf of the local jurisdiction unless the issuing local jurisdiction submits a written request to CDA," and a complete CDA Application Submission Package is still required to request the 4% credit itself.

The 2026 QAP's real numbers: two rounds, a raised award ceiling, and no minimum score

The current QAP is effective April 8, 2026 — approved by Governor Wes Moore following a public hearing held March 25, 2026 — and supersedes the QAP approved January 23, 2025. Maryland's Allocation Plan has been amended on a near-annual cadence since the Governor first approved one on April 5, 1990; the 2026 version's own cover page lists every intervening amendment date back to that year. Two changes distinguish 2026 from 2025 directly. First, DHCD now runs two competitive LIHTC rounds a year rather than one — a Spring/Summer round and a Fall/Winter round. Second, the 2026 Guide added a whole new way to size a competitive 9% award: where the 2025 Guide capped a competitive reservation at "no more than $30,000 per income restricted unit up to $1.5 million," full stop, the 2026 Guide adds a second, alternative formula — "$28,000 per LIHTC income restricted unit up to $2 million" — and lets a sponsor use whichever produces the larger award.

DHCD's own Spring/Summer 2026 round produced real, if modest, application volume: 10 applications requesting $12,910,000 in federal 9% LIHTC, $13,750,000 in Rental Housing Financing Program (RHFP) funds, and $2,000,000 in HOME funds, proposing 477 units across seven counties and Baltimore City, including one project that paired 9% LIHTC with simultaneous MBP/4% LIHTC ("twinning" — see below). The Fall/Winter 2026 round's own notice set the interest-rate assumption for underwriting at 6.9% and the LIHTC equity "raise-up rate" used in scoring the Leveraging category at $0.84 per credit dollar, and it expressly waived the QAP's ordinary requirement that every competitive application score at least 2 of the 10 available Housing Starts Now points — both real, round-specific administrative choices that live in DHCD's own competitive-round notices (numbered sequentially, e.g., 26-09 through 26-12 for 2026) rather than in the QAP or Guide text itself. As of this research, the Fall/Winter round's application results had not yet been published.

Unlike Colorado, which gates its competitive rounds behind published minimum scores of 130, 115, or 95 points depending on the track, Maryland's Competitive Scoring Criteria sums to 221 total points across eight categories (plus up to 10 additional, discretionary State Bonus Points DHCD may award outside that scale) — and nothing in the QAP or Guide states a minimum score an application must clear to be eligible for an award in the general competitive pool. The only hard score gates in the 2026 QAP are narrower: the Permanent Supportive Housing Set-Aside requires minimum sub-scores in three specific categories, and every general-pool application (absent a round-specific waiver, as happened in Fall/Winter 2026) must score at least 2 of 10 points under the "Housing Starts Now" readiness incentive.

This research could not confirm Maryland's total annual federal 9% credit ceiling directly from a DHCD primary source. Secondary sources describe "approximately $30 million" in annual per-capita credit authority; applying the federal per-capita formula directly — $3.416 per resident for 2026, per IRS Revenue Procedure 2025-32 as corrected upward for the One Big Beautiful Bill Act's 12% increase to the 9% ceiling — against a 2025 Census Bureau population estimate for Maryland of roughly 6,265,000 residents yields a figure closer to $21.4 million from the per-capita formula alone, before any carryforward or national-pool credits are added. That gap between the commonly repeated $30 million figure and this research's own computation from primary federal inputs was not resolved in this session; confirm CDA's own stated 2026 ceiling directly before modeling total annual 9% supply.

The federal bond test: still a flat 50 percent on paper, silent on the 2025 federal change

A bond-financed 4% deal's threshold for receiving credit outside the state's annual ceiling is stated twice in the 2026 QAP, in materially identical terms both times: "Projects with 50% or more of their development and acquisition costs financed with the proceeds of tax-exempt bonds may receive LIHTC on the entire qualified LIHTC basis outside the State's annual allocation of tax credits" (Section C.1), and, in the compliance-monitoring context, a reference to "buildings of which 50% or more of the aggregate basis (taking into account the building and the land) is financed with the proceeds of tax-exempt bonds" (Section H.5). Neither the QAP nor the 220-page Multifamily Rental Financing Program Guide mentions the One Big Beautiful Bill Act, Public Law 119-21, or a 25 percent alternative anywhere in their text — a direct search of both documents for those terms returned zero results in this research.

That silence is notable next to how other states have handled the same federal change. The longstanding federal rule under IRC §42(h)(4)(B) required at least 50 percent of a project's aggregate basis to be tax-exempt-bond financed; the 2025 Act (Pub. L. 119-21, §70422(b)(1)) added a lower 25 percent alternative for bonds issued after December 31, 2025, where at least 5 percent of aggregate basis is financed by those newer bonds. States including Colorado, Georgia, and Illinois have all either amended their QAP text or layered a separate administrative ceiling on top of the new federal floor since the Act passed in July 2025. Maryland's QAP — adopted April 8, 2026, a full nine months after the Act's enactment — still states only the old 50 percent number, with no indication anywhere in its own text of whether CDA has adopted an administrative position on the new 25 percent alternative at all. Whether that reflects a considered decision to keep the higher, more conservative 50 percent floor, or simply an as-yet-unaddressed gap in the QAP's drafting, could not be determined from the documents reviewed in this research.

No stacking state credit — a basis boost instead, plus an unrelated workforce-housing credit

Maryland has no state-level tax credit that pairs with LIHTC the way Colorado's state Affordable Housing Tax Credit or Georgia's state Housing Tax Credit do. A direct review of the Housing and Community Development Article's Title 4 (Division of Development Finance), Subtitle 2 (Community Development Administration) — the statute the QAP itself cites as CDA's governing authority — shows no subtitle establishing a separate state housing tax credit; CDA's LIHTC role rests entirely on its general financing powers as the state's federal §42 allocating agency, not on a distinct state-credit statute.

What Maryland does have, instead, is a State Basis Boost: under Section E.3 of the QAP, CDA may increase a project's eligible basis by up to 30 percent, as authorized by IRC §42(d)(5)(B)(v), where CDA determines the boost is needed for financial feasibility. That determination is automatic — "without prior CDA approval" — for "all family projects located within Communities of Opportunity and projects located in an ENOUGH Act or Just Community census tract"; for every other project, it is CDA's own discretionary call, made "on its own initiative at any time, based upon review of the project's sources and uses." The boost is unavailable to any project that already receives the federal Qualified Census Tract/Difficult Development Area boost, and — because the Housing and Economic Recovery Act of 2008 does not permit a State Basis Boost for credits awarded outside the state's annual ceiling — it is categorically unavailable to tax-exempt bond-financed (4%) projects at all. This is a basis adjustment that increases how much federal credit a project can generate, not a separate credit instrument an investor claims on top of the federal 9% or 4% credit.

Maryland does have one other, genuinely separate state income tax credit tied to housing — the Qualified Workforce Housing Tax Credit, codified at Housing and Community Development Article §§4-2501 through 4-2505 and cross-referencing the actual credit mechanism at Tax-General Article §10-749. It is a distinct program: eligibility is limited to a "qualified workforce housing project" inside a federally designated Opportunity Zone (IRC §1400Z-1), and "workforce housing" itself is defined, at §4-1801, as rental housing affordable to households between 50 and 100 percent of area median income — a materially higher and broader income band than LIHTC's own 20@50/40@60/Income Averaging tests reach, and administered under an entirely different subtitle of the same Article. Nothing in the statute or in DHCD's LIHTC-facing materials suggests this credit stacks with or substitutes for federal LIHTC on the same units; treat it as a separate financing tool for a separate (higher-income) housing product, not a Maryland equivalent to Colorado's or Georgia's state LIHTC match.

Baltimore City: real set-asides and leverage programs, not a separate allocating agency

Illinois's Chicago runs its own, entirely separate Qualified Allocation Plan and its own federal 9% credit ceiling, because Chicago is a "constitutional home rule city" under IRC §42(h)(3)(D). That status is defined, by cross-reference at 26 U.S.C. §146(d)(3)(C), as "any political subdivision of a State which, under a State constitution which was adopted in 1970 and effective on July 1, 1971, had home rule powers on the 1st day of the calendar year" — language written for, and in practice reaching, only jurisdictions under a home-rule constitution adopted on that specific 1970/1971 timeline (Illinois's 1970 Constitution, effective July 1, 1971, is the paradigm case). Maryland's constitutional home-rule provisions — Article XI-A, dating to 1915, and the later Article XI-E for municipalities — do not meet that test. Baltimore City, in other words, does not qualify as a constitutional home rule city for federal LIHTC or private-activity-bond volume-cap purposes, and it does not run a separate QAP, a separate credit ceiling, or a separate bond volume cap the way Chicago does. Every Baltimore-sited LIHTC application competes inside the same statewide DHCD/CDA pool as an application from any other Maryland jurisdiction.

That does not mean Baltimore is undifferentiated inside the QAP. The Guide's own Direct Leveraging scoring category lists "Project CORE or Baltimore Vacants Reinvestment Initiative (BVRI) funds awarded by DHCD" and "Strategic Demolition funds awarded by DHCD" as eligible non-state leveraged resources a Baltimore-area application can bring to the table for points — real, DHCD-administered, Baltimore-focused programs that stack on top of an LIHTC award rather than substituting for one. A Baltimore sponsor is applying through the same statewide process as everywhere else, but with real, additional local leverage programs available to strengthen that application.

Twinning: Maryland's hybrid pathway, on a genuinely tight clock

Maryland's version of a 9%/4% hybrid is called "twinning": one 9% LIHTC project and one MBP/4% LIHTC project on the same common plan of development, or on a larger development located on the same, contiguous, or proximate sites (DHCD itself determines whether an assemblage of sites is "proximate" based on whether it can be built in a single construction period). The clock starts the moment a 9% reservation letter is issued: the corresponding 4% application must be received within 90 days, and the two components must reach initial closing within 90 days of each other. Subsequent phases of an already-reserved project must separately demonstrate "Sustaining Occupancy" on the prior phase — a minimum of three months of break-even operations at 90 percent or greater occupancy — before a new phase's application will be considered.

Twinning also changes the developer-fee math: rather than each component earning its own fee under the ordinary formulas, "the total combined Developer's Fee will be the lower of the calculation below or $5 million" — a single, combined ceiling across both the 9% and 4%/MBP pieces of the deal. DHCD's own 2026 Spring/Summer round data shows this structure is genuinely in use, not just a theoretical option: one of the ten applications in that round was a twinning application pairing 9% LIHTC with simultaneous MBP/4% LIHTC.