"NMHC's QAP only ever describes a 9% competitive round — is there really no 4% or tax-exempt bond pathway in the CNMI, is that $3,455,000 ceiling actually confirmed, and does the OBBBA bond-test change even matter here?"
A QAP built around a single track: the 9% competitive round
NMHC's own public notice opening the 2025-2026 cycle states plainly that "the Northern Marianas Housing Corporation (NMHC) is the agency authorized to allocate $3,455,000 of Low Incoming Housing Tax Credits (LIHTC) in the CNMI" [sic — the notice reads "Low Incoming," evidently a typo for "Low-Income"; quoted here exactly as published rather than silently corrected]. The QAP goes on to describe a single process: applications are submitted with a $2,500 fee, evaluated under a point system, and ranked for the NMHC Board of Directors, which retains final discretion. Nowhere in the QAP's 23 pages is a 4% credit defined, a bond issuer named, or a private-activity-bond volume cap stated. The one place tax-exempt bonds appear at all is a single compliance-monitoring exception clause (Section V.7) borrowed from generic IRS guidance for "Rural Housing Service (RHS) and Tax-Exempt Bond Issue Projects" — and that same clause states outright that "a memorandum of understanding has not been executed between NMHC and RHS," i.e., even the narrow federal exception the clause describes has never been operationalized in the CNMI.
The QAP also states, without elaboration, that "there are no changes from the previous QAP which included capital needs assessment, limiting developer fees, and income averaging" — confirming that the current program design (9%-only, with a Capital Needs Assessment threshold, capped developer fees, and an income-averaging option) is a continuation of prior cycles, not new for 2025-2026. This research reviewed only the current QAP, so it cannot independently confirm what, if anything, changed before that.
The $3,455,000 ceiling: confirmed by NMHC directly, and it matches the federal small-state minimum
NMHC's own notice states the dollar figure directly, so this is not a number this research had to infer. It also lines up exactly with the independent federal mechanism that would produce it: under IRC Section 42(h)(3)(C), each state, DC, and territory's LIHTC authority is the greater of a per-capita rate or a flat small-population minimum. The Congressional Research Service's own summary of the program states that "in 2025, states have LIHTC allocation authority equal to $3.00 per person, with a minimum small population state allocation of $3,455,000," citing IRS Revenue Procedure 2024-40 directly. With a population far too small for the per-capita rate to exceed that floor, the CNMI receives the flat minimum — the same $3,455,000 NMHC's notice states. CNMI is one of several small states, DC, and four U.S. territories (Guam, American Samoa, the Northern Mariana Islands, and the U.S. Virgin Islands) that receive this minimum rather than a per-capita amount.
| Source | Figure stated | What it confirms |
|---|---|---|
| NMHC public notice, 2025-2026 QAP | "$3,455,000 of Low Incoming [sic] Housing Tax Credits" | The actual dollar amount NMHC had to allocate for this cycle |
| Congressional Research Service, RS22389 (updated July 11, 2025), citing IRS Rev. Proc. 2024-40 | "$3.00 per person, with a minimum small population state allocation of $3,455,000" for 2025 | Independent federal confirmation that $3,455,000 is the 2025 small-state/territory minimum nationwide, not a CNMI-specific figure |
This research deliberately avoided novoco.com as a source per standing instruction; the cross-check above uses NMHC's own notice and a Congressional Research Service report citing the IRS Revenue Procedure directly.
No confirmed 4% credit or tax-exempt bond track in current CNMI practice
The federal 4% credit is automatically available, outside a state's competitive ceiling, when a project finances at least a set share of its aggregate basis with tax-exempt private activity bonds. That share was 50% through 2025; the One Big Beautiful Bill Act (OBBBA, Pub. L. 119-21, Section 70422(b)(1)) permanently lowered it to 25% for bonds issued after December 31, 2025. Both figures are real federal law and would apply to a CNMI project the same as anywhere else in the country if such a deal were structured. But this research found no evidence that any CNMI project has actually used this pathway: no private-activity-bond volume-cap figure for the CNMI was located, no bond issuer of record is named anywhere in NMHC's QAP or other public materials reviewed, and no news, GAO, or NMHC report reviewed described a completed or pending bond-financed LIHTC deal in the territory.
CNMI's Qualifying Certificate: a real local tax incentive, but not LIHTC — and the QAP discounts it
The CNMI does have its own local investment tax incentive, administered separately from NMHC: the Qualifying Certificate (QC) program, created under the CNMI's Investment Incentive Act of 2000 as amended and administered by the Commonwealth Development Authority (CDA) under CNMI Administrative Code Title 25, Part 30. A Qualifying Certificate grants an approved investor rebates or abatements of certain CNMI taxes; it is a business-incentive tool aimed generally at investment the Commonwealth wants to attract, not a housing-specific tax credit, and it is not part of the Section 42 LIHTC program at all.
Notably, NMHC's own scoring table treats a Qualifying Certificate as weaker evidence of local support than an actual loan or grant. Under Criterion 10 ("Local Government Support," 0-5 points), a project that "intends to apply, rely, or has applied for a qualifying certificate" scores the same as a project with no local government support at all — 0 points — while a project with a committed below-market loan or grant equal to at least 10% of total development cost scores up to 5 points. In other words, a developer stacking a CDA Qualifying Certificate into a deal should not expect it to help a competitive LIHTC score, even though it is a genuine, separately valuable local tax benefit.
How the single track actually gets decided: scoring is advisory, the Board and Corporate Director hold discretion
The QAP is explicit that its point system does not, by itself, determine awards: "The scores derived from the point system will be a component of the overall evaluation, and not the sole determining factor for the awarding of tax credits" (Section II). Applications are also subject to a minimum-passing-score rule that matters most when only one application is filed in a cycle — a real possibility given the CNMI's small market: "In the event that only a single application is submitted, the applicant must earn a minimum passing score of 50 percent (50%) of the total points; if the applicant scores 5 points below the minimum passing score, the application will be brought to the NMHC Board of Directors for consideration" (Section III.2). Section IV separately gives the Corporate Director authority to defer consideration of any application "in his sole discretion" and gives NMHC the right to disapprove any application "regardless of ranking under the criteria and point system."
Where this goes wrong
- Assuming a 4% credit or tax-exempt bond pathway exists in the CNMI in practice — the QAP defines and administers only a 9% competitive process, and this research found no bond issuer, no PAB volume-cap figure, and no completed bond-financed LIHTC deal in public CNMI/NMHC materials.
- Reading "there are no changes from the previous QAP" as a sign this is a stable, long-running program design with a documented history — this research reviewed only the current cycle's QAP and cannot independently confirm what earlier QAPs said.
- Treating a Commonwealth Development Authority Qualifying Certificate as equivalent to government financial support for scoring purposes — NMHC's own Criterion 10 scores a QC-reliant project at 0 points, the same as no local support at all.
- Assuming NMHC's point-system ranking is the sole determinant of an award — the QAP repeatedly states scores are "a component of the overall evaluation, and not the sole determining factor," and the Corporate Director and Board retain broad discretion, including to defer or disapprove applications regardless of rank.
- Missing the single-applicant rule — if only one application is filed in a cycle, it must still clear 50% of total points (or come within 5 points, subject to Board discretion) rather than being awarded automatically for lack of competition.
- Assuming the CNMI's private-activity-bond volume cap is sized and administered the way a mainland state's is — the CNMI's small population puts any such cap far below mainland levels, and this research found no published CNMI-specific PAB figure to confirm what capacity, if any, currently exists.
- HUD
- LIHTC
- State QAPs
- IRS § 42
- Housing Finance Agencies