Rents, income limits, and the operating pro forma — West Virginia

Only two named minimum set-aside options -- Average Income is never mentioned

Unlike QAPs that walk through 20/50, 40/60, and Average Income as a named three-way menu, West Virginia's Allocation Plan raises the minimum set-aside almost in passing, inside its "Preference for Properties Serving the Lowest Income Tenants" scoring discussion: "the minimum set-aside requirement options that an Owner may choose from in making such election are as follows: 20% or more of the residential rental units...whose annual income is 50% or less of the area median gross income, or 40% or more of the residential rental units...whose annual income is 60% or less." Nothing else is listed.

A second, independent WVHDF document confirms the same limited framing. The Fund's own Section 42 Tax Credit Compliance Manual states, under its Minimum Set-Aside heading: "The election will be either 20/50 or 40/60" -- not "one of three," not "including Average Income." Searched across both the Allocation Plan and the Tax Credit Manual, the phrase "income averaging" does not appear once.

This silence should not be read as a confirmed prohibition. The minimum set-aside is a federal election made on IRS Form 8609 under IRC Section 42(g), and a state's own literature can simply be silent on an option without actually blocking it -- WVHDF's compliance staff process what the 8609 says, not what the Plan enumerates. But two of the Fund's own documents independently describing the election as binary is a real, consistent pattern, not a drafting oversight in one place. A developer planning an Average Income election in West Virginia should raise it with WVHDF directly before relying on it, rather than assuming either availability or unavailability from what the Plan and Manual do (and do not) say.

Deeper income-targeting scoring -- and the soft-funds trap that can flip a 40% AMGI commitment to 50%

Separate from the minimum set-aside, WVHDF scores a lower-income-targeting commitment under two mutually exclusive options, each tied to the percentage of units committed and each requiring that the market study "acknowledge and incorporate" the commitment and that cash flow evidence feasibility at that income band.

Option 1 (the deeper, higher-point 40% AMGI commitment) carries a specific structural condition: if the Applicant is also requesting soft-fund financing from the Fund (HOME Program, HTF Program, ERA2 Housing Fund, or similar, whether fully amortizing or not), the property must have project-based rental assistance committed covering at least as many units as are committed to the 40% AMGI targeting. The Plan gives its own worked example: a 48-unit property committing 25% of units (12 units) to 40% AMGI must have project-based rental assistance for at least those 12 units.

If that PBRA condition is not met, the consequence is not a scoring penalty alone -- the targeting itself is automatically raised from 40% to 50% AMGI, the property drops to the lower Option 2 point schedule, the resulting rent increase reduces how much soft-fund financing the deal can support, the Applicant must resubmit an updated market study reflecting the changed rents, and a $250 Market Study Resubmission Fee becomes due. A pro forma built around a 40% AMGI commitment without a matching PBRA commitment already secured is, in effect, underwriting to numbers the Fund can override before the deal closes.

Income limits: the Fund publishes its own report, but the copy live on its website is nine years stale

WVHDF's website lists a "West Virginia Income Limits Report" among its LIHTC resources, most recently re-published at a URL path dated March 2026. Its actual contents, however, are FY 2017 HUD income and rent figures by HUD Metro FMR Area (HMFA) or MSA -- Very Low Income and 60% Income Limit columns keyed to FY 2017 median family incomes, plus "HERA Special" 50%/60% hold-harmless figures referencing the FY2008-to-FY2011 median comparison that defines HUD's hold-harmless methodology. Nothing in the document itself reflects any income year after 2017.

This is a genuine, verifiable currency problem on the Fund's own site, not a reading error -- the file's re-hosting date and its actual content year are simply different things, and only the content year controls what a developer can safely underwrite to. A pro forma should pull current-year LIHTC income and rent limits directly from HUD's own published tables (huduser.gov) for the applicable West Virginia HMFA or MSA, not from this specific WVHDF-hosted report, and should independently confirm with WVHDF whether it publishes a more current limits reference through some other channel not surfaced in this research.

Separately, both the Allocation Plan and the Tax Credit Manual note that the Fund "anticipates implementing formal procedures for rent increases as well as annual utility allowance approvals," to be detailed in the Tax Credit Compliance Manual -- meaning rent increases above what was certified at the Prior to Equity Closing stage require the Fund's written consent, not merely a recalculation against updated HUD limits.

Utility allowances follow the standard federal hierarchy -- WVHDF has no schedule of its own

Neither the Allocation Plan nor the Tax Credit Manual publishes a West Virginia-specific utility allowance schedule or methodology (no HUD Utility Schedule Model designation, no state energy-consumption model, no urban/rural split of the kind some sibling states publish). The Fund's Section 42 Tax Credit Compliance Manual instead restates the standard federal hierarchy under Treasury Regulation Section 1.42-10 essentially verbatim: HUD-regulated buildings must use HUD's own utility allowances; buildings with HUD tenant assistance (but not HUD-regulated) must use the applicable Public Housing Authority Section 8 Existing Housing Program allowance; any building with USDA-assisted tenants or USDA financing must use USDA's own allowance (Exhibit A-5 of USDA Instruction 1944-E, or successor); and where none of those apply, an interested party may obtain a local utility company estimate letter, which controls if it differs from a PHA allowance.

A new or updated utility allowance must be applied to gross rent no later than 90 days after the triggering event (a federally-assisted tenant's occupancy, or the date of a new local utility estimate), and allowances must be refreshed whenever rents are revised. The rent roll format the Fund requires at Prior to Equity Closing and at ongoing compliance explicitly includes a utility allowance column alongside tenant-paid rent, household income, and household size -- consistent with, but not adding anything beyond, the federal framework.

DCR, vacancy, and reserves: real numbers, but sourced from the basis-boost section, not a stated universal floor

The only place in either the Allocation Plan or the Tax Credit Manual where WVHDF states numeric underwriting benchmarks is its State-Designated Basis Boost guidance, which lists the items the Fund considers "reasonable" when evaluating whether a property needs a basis boost to be financially feasible: per-credit equity price, total property costs, band of affordability for 60% units, a vacancy percentage "from 5% to 7%," other income, operating expenses per unit per annum, replacement reserve, permanent-financing repayment terms and interest rate, cash flow, and a "Debt Service Coverage Ratio (normally 1.25 to 1.30 or slightly lower for properties which have 50% or greater project-based rental subsidy)."

This is worth stating carefully rather than generalizing past what the text supports: the Manual frames this list as what the Fund weighs specifically when deciding whether to award a basis boost, not as a sentence stating "WVHDF requires a minimum 1.25 DCR and 5-7% vacancy on every 9% and 4% application." It is nonetheless the only concrete, numeric underwriting benchmark published anywhere in the Fund's materials, and it plausibly reflects the general range the Fund's underwriters work within on ordinary deals as well -- but that inference should be confirmed with the Fund's underwriting staff for a non-boost deal rather than assumed as a formal published floor.

No fixed statewide dollar-per-unit-per-year replacement reserve minimum is published either. For any property involving substantial rehabilitation (including gut rehabilitation or adaptive reuse), the Fund requires an independent, professionally prepared Capital Needs Assessment that itself projects "the appropriate replacement reserve deposits on a per unit per year basis" -- meaning the reserve figure a pro forma should use is property-specific and CNA-derived, not a table lookup. The Fund's own underwriting spreadsheets (Exhibit D to the Tax Credit Manual) are used to test sources and uses, cash flow, and feasibility at each of the three statutory checkpoints under IRC Subsection 42(m)(2)(C): Reservation Request, Carryover Allocation Request, and placed-in-service.

One more pro forma-relevant rule connects directly to the developer fee (covered in Phase 6): up to 50% of the Developer's Fee may be deferred, but only if the property's cash flow evidences that the deferred fee can actually be repaid within 15 years of placement in service, with acceptable residual cash flow, in the Fund's sole discretion -- so a pro forma showing an aggressive deferral without the cash flow to support a 15-year payback is a foreseeable point of Fund pushback, not merely a modeling preference.