Picking a credit program and competition bucket — Montana

What you are actually choosing

Montana runs both programs out of one desk. The Montana Board of Housing (MBOH), inside the Department of Commerce, is Montana's state housing credit agency for IRC Section 42 purposes and its own tax-exempt conduit bond issuer — there is no CTCAC/CDLAC split, and no separate 'Project Sponsor' entity standing between a developer and the bond issuer the way California's structure requires. A developer files with MBOH directly for either program.

One definitional quirk worth knowing before sizing a request: the QAP defines a project's 'Available Annual Credit Allocation' as the ceiling MBOH received from the federal government for the previous calendar year — not the year the Full-Application is filed (2027 QAP Appendix A).

There is no tiebreaker — the Board just decides

California and Texas both resolve their competitive round with a formula: a percentage tiebreaker computed from ratios and bonus points, applied mechanically to break ties among top scorers. Montana has no such formula. The 2027 QAP says so directly: 'There will be no formal evaluation or scoring of Pre-Applications beyond assuring that the Pre-Application Threshold Requirements are met' (Section III.F.1). The Board instead applies an undefined 'Selection Standard' — its own judgment of which Projects 'best meet the most pressing affordable housing needs of low-income people in Montana' (Section VII.B) — weighing the Development Evaluation Criteria alongside a long, unweighted list of other factors the QAP names but never scores: geographic distribution, rural or urban location, QCT/DDA location, depth of income targeting, community need, rehabilitation of existing stock, sustainability, sponsor track record, cost per unit, frequency of past awards in the area, and preservation of rental assistance, among others (Section VII.A).

The one number that actually gates the process: the Board 'will select up to eight Projects to submit Applications' out of however many Pre-Applications it hears (Section III.F.1). That is the real competitive constraint in a 9% round — not a point cutoff. And if the Board ever awards Credits to a Project that doesn't fit the Selection Criteria, the QAP commits it to publishing 'a written explanation that will be made available to the general public' (Section VII.B) — the closest thing Montana has to an appeal record.

The 9% ceiling is small enough that one project moves it

That ceiling changes what the per-project and per-Applicant caps actually mean. The $8,500,000 maximum award to any one Project (Section II.B) is a ten-year total; spread evenly that's roughly $850,000 a year — on its own, about 21% of Montana's entire 2026 ceiling. A single maximum-size 9% deal is a meaningful fraction of the state's whole annual pot, not a rounding error the way a $2,800,000 cap is against California's $136 million ceiling.

The $30,000,000 Cumulative Credit Maximum per Applicant (Section II.C) — the sum of an Applicant's share of every In-Process Project plus the current request, all in ten-year dollars — is proportionally even larger: at the current ceiling, it would take on the order of seven to eight years of Montana's entire annual allocation to reach it. It's a backstop against the state's largest repeat sponsors, not a constraint most Applicants will ever approach.

4% is close to genuinely first-come, first-served

The 4% side has none of the competitive machinery either. A developer files a Pre-Application to request an Inducement Resolution — no fee, no mini-market study required at that stage (Section III.A.2). The Full-Application follows whenever the deal is ready, with one hard rule: it must be complete at least eight weeks before the MBOH Board meeting at which it will be considered, and any change requiring MBOH to re-underwrite the deal restarts that eight-week clock. Applications 'funded with private activity bonds will be placed in the pipeline when they receive bond resolution approval' (Section III.A.2) — not ranked against each other by submission date.

If Montana's bond volume cap is oversubscribed, MBOH doesn't run a tiebreaker. Board staff 'schedule[s] bond closings irrelevant of bond resolution approval date,' weighing readiness to proceed, the amount of bonds requested, and available volume cap — and a project that stalls on its implementation schedule can be moved back in line for one that's ready to close (Section III.A.2).

MBOH caps the bonds themselves at 60% of Total Project Cost per Project (Section III.J) — its own overlay, and a different base than the federal 50%/25% aggregate-basis 'financed-by' test in 26 U.S.C. Section 42(h)(4)(B): that federal test is measured against depreciable basis plus land, not Total Project Cost, and the two ratios are not interchangeable. The QAP's only acknowledgment of the post-OBBBA 25% path is a single sentence — that MBOH will consider 'the 25% test' as one factor if volume cap is tight — with none of the worked mechanics larger states have published. Get bond counsel's own read before sizing a Montana deal to the 25% path.

The state's own fee schedule gives away how genuinely as-of-right the 4% program is: MBOH's bond-closing fee is literally named the '42M letter fee' — 4% of the annual credit request, due at bond closing — after the federal determination every 4% deal needs regardless of state process, that the credit amount is 'necessary for the financial feasibility of the project' under 26 U.S.C. Section 42(m)(2)(A).

Two set-asides, not eleven pools

California names eleven set-asides and geographic apportionments for its 9% ceiling alone. Montana's 2027 QAP names two: Nonprofit and Corrective Award. If Credits run short of funding both, Nonprofit is funded first (Section V.C).

'Tribal' and 'Small Rural' Projects get a softer preference: MBOH's staff materials group them separately for the Board, which 'may, but is not required,' to consider them first (Section III.F.2). Neither carries a reserved dollar percentage the way California's rural or at-risk set-asides do.

Twinned Projects: Montana's hybrid, left to bond counsel

Montana's term for a combined 4%/9% structure is 'Twinned Projects' (or 'Twinned 4%/9% Projects') — one or more 4% Projects and one or more 9% Projects, developed on a coordinated basis by a single Development Team, but legally and physically distinct: separate buildings or parcels, separate financing and construction contracts, separate accounting, sharing only site infrastructure like parking or utility easements (2027 QAP Appendix A).

The process mechanics are real: Applicants for a Twinned Project must submit a separate Pre-Application and Full-Application for the 4% half and the 9% half, and the narrative for each must justify why both credit types are needed (2027 QAP Section III.A.3). Cost and underwriting limitations apply on a separate and/or combined basis across the two.

What the QAP does not do is build out the combined structure. Its own definition says as much: the Twinned Projects definition 'is intended to be descriptive rather than to establish separate Montana requirements for such Projects, which Projects must meet all applicable IRS and other legal requirements.' The combined developer-fee math, the sequencing of the two closings, and the allocation of shared costs are questions for bond counsel and the syndicator — the same conclusion California's guide reaches about its own hybrid election, from a QAP that says even less about it.

Calendar, cost of entry, and what follows a sponsor

As of today, Montana's 2026 Full-Application deadline has already passed and the Board's Award Determination — set for its October or November meeting — hasn't happened yet. A Second Award Round exists only if the Board opts to hold one, and can be Semi-Open (Pre-Applicants not invited to a Full-Application), Closed (invited Applicants who weren't awarded), or fully Open (2027 QAP Section III.D).

Two rules follow a sponsor across applications rather than resetting each round. First, an Applicant whose first-ever Montana 9% Project is still In-Process — not yet issued Form(s) 8609 or returned/rescinded — cannot receive another 9% award unless it partners with an Experienced Developer entitled to at least 50% of the Developer Fee on the new deal (Section II.A). Second, MBOH can disqualify a Development Team member for up to five years for a demonstrated poor track record or management weakness on an affordable housing deal 'in Montana or in another state' (Appendix D) — a Montana-specific application doesn't insulate a sponsor from problems on a deal somewhere else, and vice versa.

One requirement applies to every award regardless of program or bucket: all Projects carry 35 years of affordability beyond the initial 15-year compliance period, for a 50-year total Extended Use Period (Section VI).