Rents, income limits, and the operating pro forma — Guam

The set-aside election: two federal minimums, plus a real (but GHURA-gated) income-averaging option

The 2025 QAP restates Section 42's two statutory minimum set-asides without modification: "20 percent or more of the units are occupied by tenants having a household income of 50 percent or less of the area median gross income (the '20-50 requirement'), or ... 40 percent or more of the units in the project are occupied by tenants having a household income of 60 percent or less of the area median gross income (the '40-60 requirement')" (Compliance Monitoring Plan, “Set Aside”). A third option, income averaging, is also available: "LIHTC Qualified Units (Units) may serve households earning up to 80% of the Area Median Income (AMI) so long as the average income limit of the Qualified Units is 60% or less of AMI," with designated income levels set in 10% increments between 20% and 80% of AMI (Appendix 1, restating the Consolidated Appropriations Act of 2018).

Income averaging is not a self-executing election in Guam, though. Appendix 1's "General Requirements for All Income Averaging Proposals" require GHURA's affirmative consent, evidence of syndicator/investor approval, a market study supporting the chosen AMI bands, continued compliance with any existing GHURA funding award, and flag that a revised application may be required; if the change increases compliance-monitoring costs, that increase must be built into the project budget. GHURA will even entertain income averaging for a deal that "already initially closed," but only if "Form 8609" has not yet been executed, and only if the Extended Housing Commitment recorded at closing is amended to match.

Rents and income limits ride on a genuinely different HUD data pipeline

The QAP tells owners that "HUD publishes the area median incomes for each state and territory annually" and that updated limits follow the standard national safe harbor: "Taxpayers may rely on a list of income limits released by HUD until 45 days after HUD releases a new list of income limits, or until HUD's effective date for the new list, whichever is later" (quoting IRS Revenue Ruling 94-57). That part of the process is identical to the mainland. What is not identical is how HUD arrives at Guam's number in the first place. HUD's own FY2026 Medians Methodology document states that HUD "uses the 2024 ACS and PRCS median family income data ... as the basis of FY 2026 income limits for all areas of geography, except for the U.S. Virgin Islands and Guam, American Samoa, and the Northern Mariana Islands (the Pacific Islands)" — because those "areas without ACS coverage" (a category HUD defines to include Guam by name) have no annual survey to draw from. Instead: "For the non-Puerto Rico Insular Areas of the United States, which currently lack the annual survey of ACS or PRCS, HUD uses 2020 Decennial Census data which collected income data from 2019. HUD uses national ACS median family income changes to update the 2019 median family income data to 2024. HUD then applies the same per capita wages adjustment used in ACS areas from 2024 to fiscal year 2026."

In practice, that means Guam's published income limit in any given year is a 2019 Decennial-Census income figure trended forward using two layers of national (not local) adjustment factors — not a direct, current local income survey the way a metro-area limit is. A market study or pro forma that assumes Guam's AMI reflects the same freshness and methodology as a mainland MSA's HUD number is working from a mistaken premise; the underlying data is older and the update mechanism is a national proxy, which the QAP itself never explains to applicants.

Rent-setting itself follows the standard federal formula without a Guam-specific override: units must be "rent-restricted to 30% of the imputed income limitations for each unit, based upon HUD area median incomes and size of units," imputed at "1 individual" for a unit with no separate bedroom and "1.5 individuals per bedroom" for a unit with one or more bedrooms (Rent Restrictions). The standard 140%-of-limit next-available-unit cure is also restated without modification.

Underwriting benchmarks are scored, not gated

GHURA's Criteria 2 ("Project Financial Feasibility/Viability," worth 18 of the QAP's total points) is where debt coverage, operating expense ratio, and capital structure actually show up — but as scoring bands, not as a threshold an application must clear to be considered at all.

Nothing in either QAP states that an application with, say, a 1.05 DCR or a 60% operating expense ratio is disqualified or rejected outright — the stated mechanism is that it scores zero points on that subcategory and competes on the rest of its application. That is a materially different posture from an agency that sets a hard minimum DCR as a threshold requirement (fail it, and the application is never scored at all). Underwrite to the scoring bands for competitiveness, but do not assume GHURA enforces them as a gate.

What the QAP doesn't say: utility allowances and reserves

Neither the 2024 nor the 2025 QAP describes a utility allowance methodology. The only appearance of the term in either document is a checklist item requiring a "utility allowance on file" as part of tenant-file documentation during a management audit — there is no reference to the HUD Utility Schedule Model, a local PHA utility allowance schedule, a Guam Power Authority or Guam Waterworks Authority rate schedule, an energy-consumption model, or which of the federal safe-harbor utility allowance methods GHURA will accept. This is a genuine gap rather than an oversight in this research: a direct text search of both QAPs for "utility," "HUSM," and "PHA" turned up nothing beyond that one compliance checklist line. Confirm directly with GHURA which utility allowance source and methodology it expects an application to use before finalizing a rent schedule.

The same is true of operating and replacement reserves. Many mainland QAPs specify a minimum reserve deposit (a per-unit-per-year replacement reserve figure, for example, or a minimum initial operating reserve). This research found no equivalent figure, formula, or even a general reserve-funding expectation stated anywhere in either the 2024 or 2025 GHURA QAP. The only related requirement is a Capital Needs Assessment for acquisition/rehabilitation projects, which is a physical-condition evaluation at application, not an ongoing reserve-funding rule. Do not assume a specific reserve number is implicitly required — none is written down, and it should be confirmed directly with GHURA and negotiated with the project's lender and investor.

The affordability-period math doesn't add up between two sections of the same QAP

The Threshold Requirements section states a hard minimum: "Applicants requesting an award of 9% LIHTC must commit to a minimum affordability period of 45 years" (Section II.B.2.i). But Criteria 8 ("Increase in the Extended Use Period / Conversion to Homeownership," worth up to 6 points) scores the length of the affordability period on a table that includes options shorter than that 45-year floor: "15-year compliance period plus 15 years extended use period" is worth 2 points (a 30-year total), and "15-year compliance period no extended use period" is worth 0 points (a 15-year total) — both below the stated 45-year threshold requirement. Only the top band, "15-year compliance period plus 46 years or more" (6 points, a 61-year-plus total), and the "15-year compliance period plus 30 years extended use period" band (4 points, a 45-year total) actually reach the threshold's own minimum.

This research could not resolve that internal inconsistency from the QAP text alone — it is not clear whether Criteria 8's lower bands are vestigial language carried over from an earlier QAP cycle, describe a scoring floor that no longer reflects the current 45-year threshold, or whether GHURA in practice treats the threshold as the binding rule regardless of what the scoring table implies. Confirm directly with GHURA which number actually controls before relying on anything shorter than 45 years for a 9% award.

Separately, Criteria 7 ("The Affordability of the Rents and the Length of the Affordability Period," 2-8 points) rewards going deeper than either statutory minimum set-aside: "100% of the project to households earning 60% or less of AMGI" scores the maximum 8 points, "60% of the project to households earning 60% or less of AMGI, or 80% of the project to households earning 50% of less of AMGI" scores 4, and "40% of the project to households earning 60% or less of AMGI, or 60% of the project to households earning 50% or less of AMGI" scores 2. Because the federal 20-50/40-60 minimums by themselves fall below every one of those bands, an applicant relying on only the bare statutory minimum set-aside effectively scores zero on this criterion — the QAP is structured to push applicants toward deeper affordability than federal law requires.

Ongoing costs that belong in the operating pro forma

GHURA's own fee schedule is small but real, and belongs in a Guam deal's operating and transaction-cost assumptions: a $1,500 application fee at submission, a $150-per-unit Qualified Contract fee, and compliance monitoring fees of "up to $50 per unit for all units (for the 1st year full inspection) and $25 per unit for all units (once every 3 years after 1st year full inspection)" (2025 QAP, Fees). For a 100% LIHTC set-aside project, annual tenant recertification is not required after January 1, 2014 (though a first-anniversary recertification still is); for a project with less than 100% set-aside, GHURA requires full annual recertification of every tenant's income and household composition, which carries a real, ongoing management-cost difference between a 100% and a mixed-income deal that a pro forma should reflect.