Site control and due diligence — Delaware

Site control at application: five acceptable instruments, a six-month validity floor, and a hard rule against amendment

QAP Threshold Requirement 17 accepts five forms of site control: a recorded deed, a recorded long-term lease, a municipal or county disposition and development agreement, an option to purchase or lease, or a purchase contract. Whichever instrument is used, its full terms must be submitted at application and must remain valid for a minimum of six months beyond the tax credit application deadline. DSHA reserves the right to deem an application ineligible outright if the site control documentation is amended after application -- a materially different, and stricter, rule than simply requiring site control to exist at all.

A separate rule applies to any applicant that has secured, applied for, or may apply for federal funding on the development or a later phase: the site control documents themselves must be made contingent on completion of a satisfactory environmental review under federal guidelines. That contingency requirement is a site-control drafting issue, not a later closing condition -- it has to be built into the option, contract, or lease language submitted with the application.

Environmental threshold: the hard knockouts, and the one flood-zone exception that only applies to Preservation deals

QAP Threshold Requirement 26 lists a short set of site conditions that make an application ineligible to compete outright if any building, structure, road, or parking area on the site fails to avoid them: wetlands, a non-remediated Superfund site, land identified as habitat for any federally or state-listed threatened or endangered species, land or soil unsuitable for building and not appropriate for remediation, and land in a 100-year or 500-year flood zone. Compliance has to be verified through the environmental assessment or audit plus a detailed site map -- this is not a self-certification. (The original January 2025 QAP text also listed prime farmland as a sixth disqualifying condition; that item does not appear in the QAP DSHA updated in January 2026 and currently publishes -- see the Site Sourcing and Screening phase for the parallel removal of the QAP's former Investment Level threshold.)

The flood-zone knockout carries one explicit exception: it does not apply to Preservation developments. This creates a real, asymmetric due-diligence posture between the two pools that a screener needs to plan around -- a New Construction or New Housing Creation site cannot be in a 100- or 500-year flood zone at all, while a Preservation (acquisition/rehabilitation) deal can be, but then has to absorb DSHA's flood-resilience design retrofits elsewhere in the Design and Construction/Rehabilitation Standards: raising domestic water heaters and central HVAC equipment above the Design Flood Elevation, and installing backwater valves (ideally alarmed) to prevent storm and sanitary sewer backups during coastal storm surges or heavy precipitation.

Any application including federal financing separately has to demonstrate the ability to comply with federal environmental regulations, including an Environmental Records Review -- language the QAP states without further detail, layered on top of (not a substitute for) the state-level threshold knockouts above.

Two different environmental reports, plus a rehab-only physical-walk checklist -- all required before submission

Every Delaware application -- new construction or rehab -- requires a Phase I Environmental Site Assessment conforming to ASTM E1527-13. Developments with existing structures need a second, separate report on top of that: a Phase I Environmental Audit specifically addressing the structures themselves and their existing materials and conditions, which must include test results for lead in water, lead-based paint, asbestos, radon, and PCBs. Only the executive summary of the Environmental Audit goes in the hard-copy application (the full report goes in the electronic copy), and any remediation cost estimate has to appear both in that executive summary and in the development budget itself -- so the environmental findings and the pro forma have to reconcile, not just exist side by side.

The Resilience Evaluation is a threshold requirement under QAP item 21 (DSHA Design and Construction/Rehabilitation Requirements), not a scoring bonus -- every application has to submit one, using DSHA's own Resiliency Assessment Tool, addressing flooding, excessive heat, and backup power specifically. The QAP lists eight named mitigation strategies the evaluation can point to (dry floodproofing, backwater valves, component protection floodproofing, elevated equipment, maintaining backup power to critical systems, an emergency management manual, properly venting or eliminating combustion appliances, and a community resiliency hub), and asks whether outside grants could fund a chosen strategy ahead of DSHA resources for a property the tool flags as higher risk.

The heavier package DSHA actually collects -- 30 days before construction closing, not at application

DSHA's Guidelines to the QAP list the documents required 30 days before construction closing, and it is a materially longer and more rigorous list than anything due at application: an approved ALTA survey signed and sealed by a licensed surveyor, an environmental summary with an approved work plan, a building permit, a DelDOT entrance permit, a DNREC permit and/or Notice of Intent, an approved asbestos abatement project design, a final zoning letter, a flood plain designation, a wetland delineation, a sediment control and storm water management plan approval, fire marshal approval, a copy of the title binder with all listed restrictions and/or easements, and a land survey. An updated ALTA survey is required again at permanent closing.

This means the application-stage site control instrument (deed, lease, option, or contract) and Phase I ESA are only the first, lighter layer of Delaware's actual diligence requirements -- the title binder, ALTA survey, and finalized zoning/flood/wetland determinations do not have to exist until construction closing, which for a Preliminary Reservation made in one round typically falls well into the following year given DSHA's own Carryover deadline (November 6, 2026 in the current cycle) and its target of executing Carryover Allocations by around December 18, 2026. This research did not confirm whether DSHA separately requires an owner's or lender's title insurance policy as distinct from the "title binder" described in the Guidelines -- that distinction should be confirmed directly with DSHA or transaction counsel rather than assumed.

DNREC's own permitting role is referenced by the QAP only as a checklist item (a DNREC Permit and/or Notice of Intent at closing, and DNREC final approvals worth 3 of the 10 Readiness to Proceed points) -- the QAP itself does not describe DNREC's wetlands, subaqueous lands, or coastal-zone permitting process or timeline. A Delaware due-diligence plan involving state (not just federal) wetlands or coastal work should engage DNREC's own Division of Water and Wetlands and Subaqueous Lands Section directly; this research did not independently verify DNREC's specific permit thresholds or processing timelines beyond what the QAP lists as a closing exhibit.

A related, ongoing commitment: 15-year utility benchmarking

QAP Threshold Requirement 27 requires every applicant to certify it will use a utility benchmarking service for all owner-paid utility accounts and a sample of tenant-paid accounts, for a minimum of fifteen years, with data updated continuously and never more than twelve months old. This is not a one-time due-diligence deliverable but a standing post-award compliance obligation that a due-diligence and underwriting plan should account for at the application stage, since it commits the ownership entity for the bulk of the extended use period.