Program election: 9% Credit vs. 4% Credit/bonds vs. Missouri's State LIHTC — Missouri

Two credit types, two very different calendars

MHDC's Multifamily Rental Production NOFA covers the 9% Credit and any 4% Credit application that also requests other MHDC-administered funding (HOME, HOME-ARP, NHTF, or Fund Balance). For the 2027 cycle that combined NOFA — published May 29, 2026 — ran once, with a single Application Deadline rather than the multi-step sequence some earlier cycles used. A 4% Credit application that requests no other MHDC funding is a different animal entirely: MHDC accepts those under their own, separate NOFA, and for 2027 that NOFA (published September 16, 2026) restructured the 4%-Only track into a near-monthly rolling window rather than a small number of fixed rounds. Which track an applicant is on has to be declared up front — for the combined NOFA, the initial ShareFile link request to application@mhdc.com must state the development name and city, the credit type (9% or 4%), and whether the Nonprofit Priority is being claimed, before MHDC will even issue the secure upload folder.

The election made at that first ShareFile request is not necessarily the one an application ends up funded under. The 2027 QAP reserves to MHDC the right to consider a 4% Credit application "for a potential allocation of 9% Credits if the application meets the requirements and competes successfully with other 9% Credit applications," and the reverse as well — a 9% Credit application can be considered "for a potential allocation of 4% Credits." Program election, in other words, is a starting position MHDC can override in either direction, not a locked-in choice the applicant alone controls.

Federal law ties a fixed applicable percentage to each track rather than letting it float with Treasury yields the way it once did: a permanent 9% floor for non-federally-subsidized new construction and rehabilitation credits under IRC Section 42(b)(2), and a permanent 4% floor — added by the Consolidated Appropriations Act, 2021 and applying to buildings allocated credit, or bond-financed buildings whose bonds are issued, after December 31, 2020 — under IRC Section 42(b)(3). Missouri's "9% Credit" and "4% Credit" labels track these federal floors; neither describes a rate that still moves month to month.

The 90-point floor — and who is exempt from it

9% Credit applications, and any 4% Credit applications that also request other MHDC-administered funding, go through the same scored gauntlet: Phase II Priority Scoring assigns 45 points to an application that qualifies for one of nine named priority groups (Nonprofit, HOME CHDO, Service-Enriched including Veterans Housing, Supportive Housing, Preservation, CDBG-DR, Workforce Housing, Opportunity Area, or the 50% Maximum Pilot), and Phase III General Scoring layers on additional points across categories such as Income Targeting, Mixed Income, Housing Priorities, Extended Compliance, and Development Team Prior Performance. The 2027 QAP states plainly that "Applications must earn at least ninety (90) combined points in Phases II and III to qualify for Phase IV: Underwriting review and be considered for funding. Any application that does not earn at least ninety (90) combined points in Phases II and III will not be considered for funding." MHDC separately reserves the latitude to evaluate and recommend for funding an application that falls short — Phase IV states MHDC "may evaluate, and recommend for funding, applications that do not earn ninety (90) points or more" — but the 90-point line itself is stated as an unconditional cutoff for ordinary consideration.

That exemption is one of the clearest reasons a 4%-Only election can be the simpler path procedurally: there is no competitive scoring rubric to win against other applicants on that track, because MHDC is not selecting a limited pool the way it is for the 9% Credit — the QAP itself notes there is "no minimum or maximum amount of Federal 4% Credits available each year," unlike the Federal 9% Credit's statutorily fixed "State Housing Credit Ceiling" under IRC Section 42(h)(3)(C). What the 4%-Only track cannot skip is the separate bond-allocation gate described below.

One fee detail cuts against the 9% Credit's Nonprofit Priority discount specifically on the 4% side: MHDC's standard application fee is $2,000, reduced to $750 for a 9% Credit application that qualifies for the Nonprofit Priority — but the Multifamily Rental Production NOFA states plainly that "applications submitted for 4% credits do not qualify for the Nonprofit Priority" fee reduction, regardless of the applicant's nonprofit status. A nonprofit developer choosing between tracks on cost grounds alone is choosing between $750 and $2,000, not comparing like to like.

The 4% path runs through a second state agency for the money that makes it work

A Bond Development's eligibility for the 4% Credit depends on receiving an allocation of private activity bond volume cap under 26 U.S.C. § 146 — and MHDC does not control that allocation. Missouri's private activity bond volume cap is administered separately by the Missouri Department of Economic Development (DED) through its Private Activity Bond Allocation Program (PABA), on its own calendar and its own statewide dollar ceiling, entirely apart from MHDC's tax-credit NOFA process.

The 4% Credit itself is only allowed against the portion of a development's eligible basis actually financed by the tax-exempt bonds, so the size of the bond request drives the size of the credit. The current 2027 QAP does not restate a specific aggregate-basis financing percentage at all — that figure lives only in the MHDC 2027 Developer's Guide, which states that "[i]f twenty-five percent (25%) or more of a development's aggregate basis is so financed, the development is entitled to 4% Credits for up to the full amount of the qualified basis." That 25% figure reflects a real, permanent change to federal law: the One Big Beautiful Bill Act (H.R. 1, signed July 4, 2025) amended IRC § 42(h)(4)(B) to add a 25% alternative test — available for buildings placed in service after December 31, 2025, so long as at least 5% of the building's and land's aggregate basis is financed by bonds from an issue dated after December 31, 2025 — alongside, not instead of, the original 50% test, which remains available at any time. Because the 2027 QAP itself is silent on the point, a bond request's sizing should be checked against the actual bond structure being planned and IRC § 42(h)(4)(B) directly, not assumed from the QAP's silence.

Missouri's State LIHTC: active, not suspended — but bounded differently on each track

Missouri's State LIHTC is currently active, and both the 2027 QAP and 2027 Developer's Guide describe it as a live program being allocated under the current cycle — there is no suspension or repeal in effect as of these documents. It is established by what the 2027 QAP calls simply "the State Act": Mo. Rev. Stat. §§ 135.350–135.363, as amended. That naming matters because an earlier draft of this guide mislabeled that enabling statute as the "Tax Credit Accountability Act of 2004" — a real Missouri law, but a different one. The Tax Credit Accountability Act of 2004 is codified at Mo. Rev. Stat. §§ 135.800–135.830, a general reporting and accountability statute that applies to recipients of State LIHTC (and other Missouri tax credits) as a compliance obligation; the 2027 QAP cites it separately, for that purpose, from the State Act that actually creates the credit.

The credit's history is not fully settled by primary documents, and one specific historical claim in an earlier draft does not hold up against the statute's own text. According to contemporaneous news coverage (not itself a primary MHDC or statutory document), Missouri's state credit was effectively zeroed out from 2017 into 2019 under then-Governor Eric Greitens as a budget-level decision rather than a repeal of the State Act itself, and was reinstated in 2020 under Governor Mike Parson and MHDC. That same coverage was previously cited here for the claim that the bond-financed 4% side started with a $3 million-per-year cap at that 2020 reinstatement, later raised to $6 million. Reading Mo. Rev. Stat. § 135.352 directly at the Missouri Revisor of Statutes contradicts that specific figure: the statute's $6 million cap is already present in the version effective August 28, 2009 (amended by 2009 H.B. 191), with no amendment recorded since — eight years before the 2017–2019 suspension even began. Either the $3 million figure described something other than the statutory ceiling (an appropriated or administratively self-imposed level, for instance) or it was simply inaccurate; this guide no longer repeats it as the pre-2020 statutory cap.

The statutory ceiling and MHDC's actual practice are two different numbers on the 9% side — though the QAP's own wording can make that hard to see. Mo. Rev. Stat. § 135.352, read directly, allows MHDC to authorize State LIHTC "up to an amount equal to the federal low-income housing tax credit for a qualified Missouri project" — a 100 percent ceiling, with no percentage figure and no separate statewide aggregate dollar cap for the general (9%) credit anywhere in the statute's own text. The 2027 QAP, however, describes its 70 percent administrative ceiling as though the statute supplies it: "The State LIHTC was established by the State Act, which provides that any development eligible for a Federal LIHTC allocation is eligible for a State LIHTC allocation up to an amount equal to seventy percent (70%) of the available and authorized Federal LIHTC allocation amount authorized under this QAP." Set against the statute's actual text, the 70% figure does not come from the State Act at all — it is MHDC's own QAP-level policy choice, exercised within the statute's full 100% headroom, worded in a way that can read as if the statute itself caps it. For any given development, MHDC still determines the actual State LIHTC amount in its sole discretion, based on what it decides is necessary for financial feasibility, which can land anywhere at or below that 70 percent ceiling.

A separate election lives inside the State LIHTC choice itself: MHDC's State LIHTC Accelerated Redemption Pilot Program lets a development front-load its state credit. The 2027 QAP states MHDC "may select up to fifty percent (50%) of the total State credits approved" into the pilot ("AR Applications"), which "are subject to the same review as standard redemption applications." Participation must be elected in the application — a developer applying under the pilot must submit a Letter of Intent covering both accelerated and non-accelerated pricing, using a single application and a single application fee. If selected, "the annual State LIHTC amount available for redemption in the first five (5) years of the tax credit redemption period among pilot developments will equal the annual issuance amount of the allocated Federal LIHTC," and "the remainder of State LIHTC will be equally distributed over years six through ten" — confirming the full redemption period runs ten years, with the pilot concentrating state credit into the first five years' worth of Federal credit issuance instead of spreading it evenly across all ten.

What the sources do not settle

Several things about Missouri's program election remain genuinely open on the public record reviewed for this guide, and a developer's decision at this phase should treat them as open questions rather than settled facts.

No published MHDC criteria describe when MHDC will actually exercise its reserved right to move an application between the 9% and 4% tracks, or how frequently that has happened in practice. The QAP states the authority exists on both applications and NOFA rounds; it does not publish a standard or a track record for how it gets used.

Why secondary news coverage describes a $3 million-per-year State 4% Credit cap at the 2020 reinstatement, when the primary statutory text already shows $6 million in the version effective August 28, 2009 with no recorded amendment since, was not resolved for this guide. It is possible that figure described something other than the statutory ceiling — an appropriated or administratively self-imposed level, for instance — but that was not independently traced through Missouri's session laws or MHDC's historical allocation records.

No MHDC-published data on how competitive the 9% Credit round actually is in Missouri beyond raw application counts was located. MHDC's 2027 Applications Received list shows 82 applications submitted against the August 7, 2026 deadline (72 requesting 9% Credits, 10 requesting 4% Credits with other MHDC funding), but nothing public yet shows how many of those were funded or what score a typically-funded application clears above the 90-point floor.

The 4%-Only NOFA's shift to a near-monthly rolling schedule was published September 16, 2026, with the first submission window not opening until October 1, 2026. As of this writing no round under that new structure has opened, closed, or produced an approvals list, so there is no track record yet for how the rolling format performs in practice — whether MHDC holds to each monthly deadline, how quickly bond-cap pipeline positions actually move, or whether any given month is oversubscribed relative to DED's bond cap.

MHDC was separately soliciting public comment on a Draft 2028 QAP as of mid-2026, with a comment period that closed August 28, 2026. Nothing here should be read as a prediction of what the 2028 QAP will change; a Missouri deal timed near the end of the 2027 cycle should confirm whether the program-election mechanics described here are still current before relying on them.