"How deep do we target — and what does that do to the rent roll?"
The floor: the base §42(g) election
Before any Allocation Criteria points enter the picture, every 9% applicant makes an irrevocable minimum low-income housing commitment under IRC §42(g) at application (§2.13): at least 40% of units at or below 60% AMI, or at least 20% of units at or below 50% AMI, or Income Averaging, which lets units serve households up to 80% AMI as long as the project-wide average income/rent limit is 60% AMI or less.
WSHFC treats Income Averaging as a case-by-case election, not a self-certifying checkbox: the applicant submits a unit-configuration plan on a Novogradac-format spreadsheet, a written agreement from the investor and any other public or private funders, a market study that addresses the income mix, and a signed Average Income Certification Form committing to the compliance implications as currently understood. All buildings in the project must share the same election, and Income Averaging is unavailable for re-syndications or projects mixing in market-rate units.
§6.1: the single largest score category
On top of the §42(g) floor, §6.1 Additional Low-Income Housing Commitment awards 50-60 points — worth more than a third of even King County's 164-point minimum — for committing selected percentages of low-income units to specific AMI tiers, chosen from one of 20 published set-aside combinations. Counties are classified Lower Income or Higher Income by their four-person, 50%-AMI figure (Lower Income counties are at or below $31,951; Higher Income counties are above $32,000), and the same combination is worth two more points in a Lower Income county — WSHFC's explicit rationale is that identical income targets generate less operating income where rents are lower to begin with. Deep-30%-AMI combinations cross-subsidized by large 60%-AMI blocks are restricted or unavailable in Lower Income counties for the same reason: 60% AMI rents aren't considered reliably achievable there.
| Option | Set-aside mix | Higher Income County pts | Lower Income County pts | Weighted avg. income served |
|---|---|---|---|---|
| 1 | 50% @30% AMI, 25% @40% AMI, 25% @60% AMI | 60 | — | 40% |
| 3 | 50% @30% AMI, 30% @50% AMI, 20% @60% AMI | 58 | — | 42% |
| 5 | 50% @30% AMI, 25% @50% AMI, 25% @60% AMI | 56 | — | 42.5% |
| 9 | 50% @40% AMI, 50% @50% AMI | 56 | 58 | 45% |
| 14 | 40% @40% AMI, 50% @50% AMI, 10% @60% AMI | 54 | 56 | 47% |
| 17 | 40% @40% AMI, 30% @50% AMI, 30% @60% AMI | 54 | 56 | 49% |
A dash in the points column means that combination isn't available in that county classification without the MHCF Director's written approval. Unit counts that don't distribute evenly round up from the lowest income tier first, then the second-lowest, with the remainder assigned to the highest-income tier (§6.1.1) — a mechanical rule worth automating rather than hand-checking, since it determines which specific units carry the deepest restriction.
§6.2: two points a year, and a real correction
§6.2 Additional Low-Income Housing Use Period awards two points for every year of additional low-income use committed beyond the standard 15-year compliance period, up to a maximum of 22 years — a 44-point ceiling. The Additional Use Period commences at the close of the compliance period, and the commitment, once made, binds the applicant to maintain both the low-income units and every other Allocation Criteria commitment made in the application for that full extended period.
One correction to note: some internal references describe §6.2 as scaling from a 24-point base at a 25-year Additional Use Period, with a summary chart that reads "22-44" and body text that reads differently. The current, verified 2026 Policies document does not show that inconsistency — its Chapter 6 summary chart and its §6.2 body text agree: 2 points per year, capped at 44 points at 22 years. Confirm against the live, current-cycle document each application round regardless, since WSHFC revises and republishes these Policies (this version carries its own note of corrections to Sections 3.4, 3.5, 3.6, and 5.2.2.7 made in the 8/1/2025 republication).
Stacked together, §6.1's 60-point ceiling and §6.2's 44-point ceiling total 104 points — 63% of King County's 164-point minimum, 66% of Metro's 158, and 68% of Non-Metro's 154 — before an applicant has touched leverage, priority populations, cost containment, targeted areas, or any of the other 19 Allocation Criteria. In practice, the income-targeting and use-period elections aren't one input among many; they're the load-bearing decision the rest of the application is built around.
What deep targeting does to the pro forma
WSHFC's own policy text flags the tension directly: applicants seeking points for set-aside options with units at 30% AMI and below "must be able to demonstrate feasibility through other income sources, other allowable rents or rental assistance" (§6.1) — the Commission is telling applicants up front that the deepest-scoring combinations don't cash-flow on tax credit rents alone.
The §6.1 election also has a direct, quantifiable fee consequence: the Reservation Fee on a 9% award (and the analogous Credit Issuance Fee on the bond side) is 9.50% of the first-year Credit reservation if the project selects an Additional Low-Income Housing Commitment setting aside at least 50% of low-income units at or below 50% AMI, versus 12.53% for any other project (§11.2) — a real, closing-cost-level swing that belongs in the same feasibility model as the rent impact, not treated as a scoring decision alone.
On the expense side, note that WSHFC removed points for alternate utility allowance methodologies starting with the 2021 Policies (§2.14); an applicant can still submit an alternate UA under Method 8 of Appendix O with a Commission-approved energy modeling consultant, but it no longer earns Allocation Criteria points, only a potentially more accurate operating expense line.
Where this goes wrong
- Treating the §42(g) minimum election as the whole targeting decision — §6.1 Additional Low-Income Housing Commitment sits on top of it and is worth up to 60 points by itself, more than a third of the point floor in some pools.
- Picking a set-aside combination that shows a dash for the project's county classification — that combination requires MHCF Director approval to use there at all, and isn't a given.
- Assuming a Higher Income County combination transfers directly to a Lower Income County application — the identical combination is worth two more points in a Lower Income county, and some deep-30%-AMI combinations aren't available there at all.
- Underweighting §6.2 relative to §6.1 — two points per year sounds incremental until you notice it tops out at 44 points, nearly as much as the entire §6.1 category.
- Not pricing the Reservation Fee/Credit Issuance Fee discount (9.50% vs. 12.53%) into deal economics when deciding whether to clear the 50%-of-units-at-≤50%-AMI bar — it's a real closing-cost difference tied directly to the §6.1 election.
- Miscounting the rounding rule under §6.1.1 — it cascades from the lowest AMI tier upward, not proportionally across all tiers, and a compliance audit will check unit-level assignment against it.
- Treating Income Averaging as a simple checkbox — WSHFC requires a Novogradac-format spreadsheet, written investor sign-off, and a market study addressing the income mix, and it's unavailable for re-syndications or projects with market-rate units.
- Assuming a county's Lower/Higher Income classification is static — it's tied to a specific dollar threshold (a four-person household's 50% AMI figure) that moves as HUD republishes income limits, so a county can migrate between lists.
- HUD
- LIHTC
- State QAPs
- IRS § 42
- Housing Finance Agencies