"NDHFA's own Plan doesn't mention the federal bond-financing percentage test anywhere I can find, and everyone keeps telling me North Dakota has a state housing tax credit — is either of those actually true, and if I want to combine 9% and 4% on one deal, is that a real option here or just a line in the scoring sheet?"
One Allocation Plan, two tracks — and the 2027 Plan just made explicit that the 4% track isn't a competition
NDHFA titles its Section 42 plan the "2027 ALLOCATION PLAN, Low Income Housing Tax Credit Program," though Section 1 still calls it a "Qualified Allocation Plan ('Plan')" for federal purposes. Both the 9% and 4% credit run through this single document, but on different intake logic: 9% Credits are released through published Application Rounds (Round 1 of the 2027 cycle closes September 30, 2026, with $3,701,073 available), while "Proposals for bond-financed projects with an allocation of 4% credits may be submitted to the Agency at any time between January 1st and August 31st" (2027 Allocation Plan, Section 4). Section 7 spells out the practical consequence directly — new language not present in the 2026 Plan: "Applications for an allocation of competitive 9% LIHTCs must receive a minimum of 55 points as determined by the Agency to be eligible for further consideration... Applications for an allocation of noncompetitive 4% LIHTCs are not subject to a minimum score." A 4% deal that clears Threshold and NDHFA's underwriting is not competing against other 4% deals for a ranked, limited pool the way a 9% deal is.
| 9% Credits | 4% Credits | |
|---|---|---|
| Intake | Published Application Round(s); 2027-cycle Round 1 closes Sept. 30, 2026 | Rolling, Jan. 1 – Aug. 31 each year |
| Scored? | Yes — 55-point minimum to advance | No — "not subject to a minimum score" (Section 7) |
| Max Developer Fee | 15% of total eligible basis | 30% of total eligible basis |
| Allocation Fee schedule | 10%/10%/balance across Reservation, Carryover, Final Allocation | 20% at Equity Closing, balance at Final Allocation |
2027 Allocation Plan, Sections 4, 6, 7.
Twinning 9% and 4%: the Plan names and scores it, but doesn't spell out the mechanics
A genuine hybrid path exists: under the Committed Leverage scoring category, NDHFA awards points for "Applications proposing twin-financed 9% LIHTCs and 4% tax-exempt financing" (2027 Allocation Plan, Section 7.M.1) — worth 2 of the up-to-4 points available in that category, the same category used to score other leveraged funding sources. Beyond naming the structure and scoring it, the Allocation Plan does not define what a "twin-financed" project must look like structurally (e.g., separate buildings or phases each carrying their own credit type, versus some other split). This research could not confirm NDHFA's expected structuring approach from the Plan text alone; a developer pursuing this path should confirm the mechanics directly with NDHFA and bond counsel before assuming a specific transaction structure will qualify for the points.
Who issues the bonds: NDHFA itself, through the Industrial Commission — not a separate authority
North Dakota Century Code §54-17-01 designates "the commission created to conduct and manage, on behalf of the state of North Dakota, certain utilities, industries, enterprises, including housing finance programs" as the "industrial commission of North Dakota" — a three-member body consisting of the Governor, the Attorney General, and the Agriculture Commissioner (§54-17-02), which also acts as the state's housing finance agency. Bond authority sits in the same chapter: "In order to fund its housing finance programs, the industrial commission is authorized to issue and refund revenue bonds or evidences of debt and indebtedness of the state... The bonds may not constitute a debt of the state of North Dakota and must contain a statement to that effect on their face" (N.D.C.C. §54-17-07.4). NDHFA's own agency page confirms this traces to a citizen-approved 1980 Initiated Measure that "authorized [the agency] to create a mortgage purchase program and certain other housing programs and to issue revenue bonds of the State to fund these programs." In other words: NDHFA is not a conduit borrower waiting on a separate state bond bank — the agency itself, acting through the Industrial Commission, is the statutory issuer.
This is a different structure from the many states where a distinct authority issues housing bonds and the QAP-administering agency is a separate entity. It is also easy to confuse with a real but unrelated program: the North Dakota Public Finance Authority (NDPFA) — which appeared on the very same March 25, 2026 Industrial Commission meeting agenda as the 2027 LIHTC Plan — issues its own revenue bonds for the Clean Water and Drinking Water State Revolving Fund loan programs under N.D.C.C. chs. 6-09.4 and 61-28.2. That is a separate statutory scheme for water infrastructure lending, not a housing bond program; nothing in the Century Code or the Allocation Plan indicates NDPFA has any role in LIHTC-linked multifamily bond financing. This research also found no statutory provision creating an alternate local issuer (a city or county housing authority, for example) with independent authority to issue LIHTC-paired private activity bonds in North Dakota; confirm directly with NDHFA and bond counsel before assuming who the issuer of record will be on a specific deal.
No live North Dakota tax credit for affordable housing — the Housing Incentive Fund's donor credit expired after 2016
Several generic descriptions of North Dakota's Housing Incentive Fund (HIF) describe it as offering contributors a dollar-for-dollar state income tax credit — language that matches how HIF originally worked, but not how it works today. Three primary sources converge on the same conclusion. First, the North Dakota Century Code section that created the donor credit is now dead letter: "57-38-01.32. Housing incentive fund tax credit. Expired by S.L. 2015, ch. 14, §20." Second, the statute that currently governs HIF, N.D.C.C. §54-17-40, contains no tax-credit mechanism at all — it describes HIF as "a special fund in the state treasury administered by the housing finance agency," funded by a "continuing appropriation," used for gap assistance, new construction, rehabilitation, preservation, or acquisition of multifamily and qualifying single-family projects, and rental/homelessness assistance, with eligible recipients limited to governments, housing authorities, and nonprofit or for-profit developers (individuals may not receive direct assistance). Third, the North Dakota Office of State Tax Commissioner's own 2024 Schedule ND-1TC instructions confirm the credit is closed to new contributions: "Line 16 – Housing incentive fund credit carryover... Enter on this line an unused housing incentive fund credit carried over from tax years 2012 through 2016."
Put together: North Dakota does not currently have an active state tax credit that pairs with a federal 9% or 4% LIHTC award. The HIF donor-credit program that once functioned that way ran only for contributions made in tax years 2012 through 2016 and now survives solely as a carryforward line for those already-earned credits. Today's HIF is instead a direct-appropriation, competitively scored gap-financing and soft-loan fund, run under its own separate HIF Allocation Plan (the 2026 HIF Allocation Plan was approved by the Industrial Commission on the same March 25, 2026 date as the 2027 LIHTC Plan). The 69th Legislative Assembly appropriated $25 million for housing to HIF for the 2025-2027 biennium (plus $10 million of ND Homeless Grant funds transferred in for homeless activities), with $20 million earmarked for multifamily activities and approximately $4,506,000 expected available for the September 2026 multifamily round — real money, but a grant/loan gap-financing tool layered alongside the federal credit, not a state tax credit paired dollar-for-dollar with it.
The federal 25%/50% bond-financing test applies at face value — no ND-specific overlay was found
A 4% 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 tax-exempt-bond financed, and the 2025 One Big Beautiful Bill Act (Pub. L. 119-21, §70422(b)(1)) added a more favorable 25% alternative for bonds issued after December 31, 2025. A direct text search of both the 2027 Allocation Plan and the LIHTC Compliance Manual (revised April 9, 2026) for "aggregate basis," "50 percent," "25 percent," "OBBBA," and "Pub. L. 119-21" returned no results in either document. Unlike states that publish their own administrative percentage on top of the federal rule, North Dakota's own materials are simply silent on this test — meaning a North Dakota 4% deal is governed by the federal statute on its own terms, with no state-level tightening or restatement layered on top, as far as this research could confirm.
Where this goes wrong
- Assuming North Dakota's 4% track is a scored competition like its 9% round — the 2027 Allocation Plan states outright that "Applications for an allocation of noncompetitive 4% LIHTCs are not subject to a minimum score" (Section 7).
- Assuming NDHFA restates or tightens the federal aggregate-basis bond test somewhere in its own materials — a direct text search of the 2027 Allocation Plan and the Compliance Manual found no mention of the test at all; the plain federal rule applies.
- Assuming a "North Dakota state LIHTC" or an ongoing Housing Incentive Fund donor tax credit exists today — the only such mechanism, N.D.C.C. §57-38-01.32, expired by its own terms (S.L. 2015, ch. 14, §20), and the state's own Schedule ND-1TC limits the remaining carryover line to contributions made in "tax years 2012 through 2016."
- Treating the Housing Incentive Fund as a tax-credit program today — its current governing statute (N.D.C.C. §54-17-40) funds it purely through direct legislative appropriation; there is no donor-credit mechanism left in the statute.
- Assuming a separate bond-issuing authority (a state finance authority, a city, or a county) issues LIHTC-paired multifamily housing bonds in North Dakota — this research found NDHFA itself is the statutory issuer, acting through the Industrial Commission under N.D.C.C. §54-17-07.4, with no alternate issuer identified in the Century Code or the Allocation Plan.
- Confusing the North Dakota Public Finance Authority's Clean Water/Drinking Water State Revolving Fund bonds (N.D.C.C. chs. 6-09.4, 61-28.2) with NDHFA's own housing revenue bonds — they are separate programs under separate statutes that merely happen to report to the same Industrial Commission on the same meeting agenda.
- Assuming "twin-financed" 9%/4% hybrid deals are unusual or unsupported in North Dakota — NDHFA's own Committed Leverage scoring category explicitly names and rewards this structure, though the Plan text does not spell out the underlying transaction mechanics.
- Citing the 2026 Allocation Plan (document dated 06/10/2025) as the current governing document — it was superseded by the 2027 Allocation Plan, Industrial Commission-approved March 25, 2026; the two plans differ in real ways, including the new explicit "4% is not scored" language and the removal of the prior year's New Development/Renovation Parity provision.
- Pulling North Dakota's plan or forms from novoco.com or another aggregator site — go directly to ndhousing.nd.gov (ndhfa.org itself now redirects there).
- Assuming a single project can receive an unlimited 9% award — no Application may receive a conditional Reservation for more than an aggregate 34% of that year's annual LIHTCs available, outside a short list of stated exceptions.
- HUD
- LIHTC
- State QAPs
- IRS § 42
- Housing Finance Agencies