"Is this parcel Urban or Rural under MSHDA's own map -- and does that answer decide more of this deal's scoring than anything about the site itself?"
One USDA map, two funding tracks, and four Primary Categories
MSHDA's 2026-2027 Qualified Allocation Plan requires every applicant to select exactly one Primary Category, and three of the four are split or gated by the same Urban/Rural line. Preservation Category (10% of the annual credit ceiling) is available only in the October 2025 and October 2026 rounds, and MSHDA commits to allocating a minimum of the first 35% of the preservation credit ceiling to projects in a Rural municipality before the remainder goes to the highest-scoring projects in the category regardless of location. Permanent Supportive Housing (21%) is not itself split by geography but sets a different minimum PSH-unit threshold by area -- the greater of 10 units (Rural) or 15 units (Urban), or 35% of total units. Open Category -- Urban (28%) and Open Category -- Rural (16%) are exactly what they sound like: whichever bucket a site's USDA classification places it in is the only Open Category it may compete in. A project cannot apply Rural to reach the smaller, less-competitive-looking 16% pool if its site is actually Urban under the map.
| Category | Share | Note |
|---|---|---|
| Preservation | 10% | October rounds only; minimum 35% of this category's ceiling reserved for Rural municipalities |
| Permanent Supportive Housing (PSH) | 21% | Minimum PSH-unit set-aside varies by Urban/Rural (see text) |
| Open Category -- Urban | 28% | USDA RD Multifamily map governs eligibility |
| Open Category -- Rural | 16% | USDA RD Multifamily map governs eligibility |
| Strategic Investment (Optional) | 15% | Layered on top of a Primary Category; scored under Exhibit III, not the standard Scoring Criteria |
| Undesignated Credit | 10% | Held back; used mainly to backfill statutory set-asides that awards from the above categories didn't already fill |
Percentages are drawn from the QAP's own funding-round tables (Section V.B and Section VI); MSHDA states plainly that any application scoring process does not give rise to an entitlement or legal right to an allocation -- allocation decisions remain entirely at MSHDA's discretion even for a top-scoring application.
On top of the four Primary Categories sit four Statutory Set-Asides (Nonprofit, 10%; Rural Housing, 10%; Elderly, 10%; Eligible Distressed Areas, 30% -- the last defined by reference to MCL 125.1411(u) and published as MSHDA's own Eligible Distressed Areas List) and two Non-Statutory Set-Asides (Emerging Developers, 10%; Tribal Housing, at least $3.3 million or two projects per year). A project can count toward a Statutory and a Non-Statutory set-aside simultaneously but never toward two Statutory set-asides at once -- MSHDA assigns each awarded project to whichever set-aside "best furthers the goal of filling all the Statutory Set-Asides," not necessarily the one an applicant self-selected.
Urban Opportunity Criteria and Rural Opportunity Criteria: identical point structure, different radii
MSHDA's 2026-2027 LIHTC Scoring Criteria (a separate 48-page document from the QAP itself, incorporated into it by reference and mandatory to complete for every application) runs Section A -- Urban Opportunity Criteria and Section B -- Rural Opportunity Criteria as two parallel tabs. The Scoring Criteria states this in nearly identical language at the top of each tab: developments in a rural area as defined by the USDA RD Multifamily map use Tab B; developments outside that rural definition use Tab A; "a project will only be eligible for points from the applicable Tab A or B." There is no partial credit for guessing wrong, and no ability to selectively apply whichever tab scores higher -- the USDA determination is binding on which tab an application must use.
| Item | Points | Urban threshold | Rural threshold |
|---|---|---|---|
| 1. Proximity to Transportation | 4 | Transit stop within 1/4 mile, or comparable dial-a-ride/other transportation | Transit stop within 1/2 mile, or comparable service; tribal transportation letter accepted for Native American Housing projects |
| 2. Proximity to Amenities (10 amenity types) | 25 | Full points within 1 mile; half points within 2 miles | Full points within 2 miles; half points within 5 miles |
| 3. Community Revitalization Plan Area | 1 | Local-government letter/resolution identifying a Community Revitalization Plan or certifying significant public/private investment scaled to municipality population | Same criteria, same scale |
| 4. Household Overburdened Area | 3 | 1-3 points by census-tract overburdened-household percentage (30-39.9% / 40-49.9% / 50%+); a 1/3-mile proximity rule lets a site borrow an adjacent tract's higher score | Same scale and proximity rule |
| 5. Communities without Recent Awards | 2 | County has not received a 9% credit reservation in the last four funding rounds | Same test |
| 6. Community Supported Initiatives | 5 | 5 points for a place-based developer (25%+ ownership, headquartered/working primarily in the local area) with a qualifying community-supported plan; 3 points without | Same scale |
| 7. Job Growth Opportunities | 4 | 4 points within 15 miles of an MSHDA-listed qualifying economic-development project; 2 points within 25 miles | Same scale |
Both tabs total 44 points, confirmed against the Scoring Criteria's own Quick Reference Sheet section totals. Every item includes a scattered-site weighted-average rule: multi-site projects score each item as a unit-weighted average across sites, rounded down.
Proximity to Amenities carries its own documentation burden that a screen should anticipate early: an address, a map with measured distances, and photographs for each claimed amenity, with MSHDA reserving sole discretion to decide whether a submitted amenity actually qualifies. The ten amenity types (full-service grocery, licensed childcare or a senior center, pharmacy, general medicine physician/clinic, public library, public school, community organization, employment center, public park, job training center) and their per-amenity point values are identical on both tabs -- only the mile bands change. The full-service grocery definition is unusually specific for a QAP: it requires nine separate product categories (fresh produce, fresh/uncooked meat and poultry, dairy, canned goods, frozen foods, dry groceries and baked goods, non-alcoholic beverages, household paper products, and personal care items), suggested to be documented with something as mundane as a weekly sales ad.
Two of the seven items reference other standing MSHDA-published data rather than requiring an applicant to generate new analysis: Household Overburdened Area point levels come from a census-tract list MSHDA publishes as Tab HH of the Combined Application, and the underlying Urban/Rural determination itself runs through Tab GG of the Combined Application, which is MSHDA's own instructions for reaching the live USDA RD Multifamily eligibility lookup tool at eligibility.sc.egov.usda.gov -- not a separate, MSHDA-drawn boundary. Because that USDA tool is a live federal determination, not a static map, a site's classification checked at screening should be re-verified again at application; USDA updates its eligibility areas independently of MSHDA's funding-round calendar.
Two basis boosts that do not overlap the way an out-of-state analyst might assume
Michigan applications can carry two structurally distinct basis boosts, and confusing them at the screening stage will misstate a deal's basis by a wide margin. The federal boost is automatic under 26 U.S.C. § 42(d)(5)(B): any project in a Qualified Census Tract (QCT) or Difficult Development Area (DDA) qualifies for up to a 30% increase to eligible basis with no state action required. MSHDA's own state-designated basis boost (QAP Exhibit V) is a separate, MSHDA-administered determination, and its qualifying paths differ by credit type.
| Credit type | Qualifying paths (any one is sufficient for 9% LIHTC; only the QCT/DDA path applies to 4%/bond deals) |
|---|---|
| 4% / tax-exempt bond | Located in a QCT or DDA -- up to 30% boost. This is the only path Exhibit V lists for bond-financed 4% deals. |
| 9% LIHTC | Located in a QCT/DDA or on MSHDA's own Census Tract list (Tab J); Permanent Supportive Housing; restricting 25% of units to 30% AMI or less without project-based rental assistance; USDA RD 515-financed; located in a Rural municipality per the USDA RD Multifamily tool; certified historic rehabilitation (must also use the Historic Credit and apply for Historic scoring points); meets the MSHDA Energy Efficient Buildings Policy; meets the Tribal Housing definition (QAP Section V.F); or is subject to Davis-Bacon/BABA requirements -- up to 30% boost, any one qualifying path sufficient |
MSHDA reserves the right to modify the State-Designated Basis Boost Policy on an as-needed basis, including as federal boost options are updated by Congress, with notice posted to its website rather than a formal QAP amendment.
Note the asymmetry: a 9% deal has nine independent doors into the state boost (QCT/DDA/Tab J list, PSH, deep targeting, USDA RD 515, Rural location, historic rehab, energy-efficient building, tribal housing, or prevailing-wage triggers), while a 4%/bond deal has exactly one -- QCT or DDA. A Rural-but-not-QCT bond deal that would have qualified for the state boost as a 9% project gets no equivalent path as a 4% project under Exhibit V as currently written.
MSHDA's own site-selection rules, and where the hazard and market data actually live
Independent of QAP scoring, MSHDA's Combined Application publishes its own Site Selection Criteria (Tab CC, last revised 7/29/24) as a threshold-adjacent screening tool -- a real, currently-posted document rather than boilerplate. It rejects "bowling alley" sites (long, narrow parcels needing a single access point and an extensive cul-de-sac) except for small-scale urban infill with a secondary ingress/egress point; requires municipally-owned water and sanitary sewer already available and adequate (private water systems are rejected outright except for lawn irrigation); flags a specific list of environmental red flags -- sites within 600 feet of railroads, within 400 feet of major underground gas transmission lines, within 500 feet of the Great Lakes or a wild and scenic river, within one to two miles of jet-capable airports depending on flight-path proximity, or with any history of use (gas station, dry cleaning, auto salvage, heavy manufacturing) presenting a high risk of residual soil contamination; and requires sites in a 100-year floodplain to elevate all buildings, parking, and pedestrian/vehicular access at least one foot above the flood elevation, with all necessary governmental approvals obtained first. Notably, all sites are appraised on an as-if "ready to build" basis -- unusual off-site utility-extension or lift-station costs can be included in the mortgage only to the extent the land acquisition cost is less than the appraised value.
Tab CC also builds in a HUD site-and-neighborhood standards check that a screen should run early rather than discover at underwriting: new-construction projects using certain federal funding sources are restricted from locating within a HUD-defined area of minority concentration (checked via HUD's own address-lookup tool) unless the market study can affirmatively document one of several statutory exception conditions under 24 CFR 983.57 -- comparable housing opportunities outside the area, demonstrated integration trends, or a locally operated mobility program, among others.
For environmental and hazard data specifically, Michigan's Department of Environment, Great Lakes, and Energy (EGLE) publishes a working set of live GIS tools rather than a single static list: RIDE (Remediation Information Data Exchange, combining the Part 201 contaminated-sites inventory and the Part 213 leaking-underground-storage-tank list) and its companion RIDE Mapper for interactive site lookup; a separate open-data Underground Storage Tanks layer (Part 211, active and closed facilities); the RenewMI project viewer for active and completed brownfield/remediation projects; MPART, EGLE's GIS for PFAS-related sites; and a Water Well Viewer for well records and wellhead protection areas. These sit alongside FEMA's national flood layers and the USDA RD eligibility tool already discussed -- none of this was assembled by MSHDA itself, but all of it is queryable public GIS data a Michigan screen can and should pull before relying on a Phase I ESA alone.
MSHDA publishes current-year income and rent limits through Tab E of the Combined Application (Income Limits and Rent Restrictions), maintained on a rolling basis on MSHDA's rental-compliance site rather than as a single annual PDF drop; a screen should pull the current version directly from that page rather than reuse a prior year's cached figures, since MSHDA's applicable date does not always track HUD's national release date exactly.
Where this goes wrong
- Treating a site's Urban/Rural status as fixed once checked. It is a live USDA RD Multifamily eligibility determination (eligibility.sc.egov.usda.gov), not an MSHDA-drawn boundary, and can change between initial screening and application submission.
- Scoring against both Tab A (Urban) and Tab B (Rural) Opportunity Criteria, or the wrong one -- the Scoring Criteria is explicit that a project is eligible for points from only the applicable tab.
- Assuming the two Opportunity Criteria tracks differ only in point totals. They are identical in every scored item and every point value; only the qualifying mile-radius bands differ (1/4 vs 1/2 mile for transportation; 1-2 vs 2-5 miles for amenities).
- Applying to the Open Category that looks less competitive (e.g., Rural at 16% of the ceiling vs. Urban at 28%) without confirming USDA eligibility first -- a site's actual classification, not an applicant's preference, controls which Open Category it may compete in.
- Treating the federal QCT/DDA basis boost and MSHDA's own state-designated basis boost (Exhibit V) as the same program or assuming they follow identical eligibility rules across credit types -- a 4%/bond deal has only the QCT/DDA path into the state boost, where a 9% deal has nine independent qualifying paths.
- Assuming a strong scoring position guarantees an award. MSHDA's QAP states plainly that scoring does not create an entitlement or legal right to a LIHTC allocation; awards remain entirely at MSHDA's discretion.
- Screening a site against MSHDA's Site Selection Criteria (Tab CC) as boilerplate rather than as a real, dated, currently-enforced threshold document (last revised 7/29/24) -- its private-water-system prohibition, floodplain elevation requirement, and area-of-minority-concentration check are substantive gates, not soft guidance.
- Assuming a full-service grocery store amenity claim will be accepted without matching all nine required product categories (fresh produce, fresh/uncooked meat and poultry, dairy, canned goods, frozen foods, dry groceries/baked goods, non-alcoholic beverages, household paper products, personal care items) -- MSHDA determines eligibility of a claimed amenity in its sole discretion.
- Treating EGLE's RIDE/RIDE Mapper as a substitute for a Phase I ESA rather than a complement to it -- it is a genuinely useful, current, queryable public GIS layer, but it is not itself the ASTM-standard environmental review MSHDA requires at threshold.
- Relying on a prior year's MSHDA income/rent limits (Tab E) instead of pulling the current version -- MSHDA's applicable implementation date does not always match HUD's national release date.
- Confusing MSHDA's Statewide Housing Plan / Regional Housing Partnership framework (referenced in the QAP's General Threshold Requirements as something a project narrative must address) with a scoring category -- it is a narrative-consistency threshold item, not a points line in the Scoring Criteria.
- Assuming this analysis is drawn from a stale QAP. MSHDA already lists a '2028-2029 Qualified Allocation Plan Updates' planning page on its site; that process governs a future cycle and does not supersede the currently effective 2026-2027 QAP and its August 3, 2026-updated Scoring Criteria used throughout this guide.
- HUD
- LIHTC
- State QAPs
- IRS § 42
- Housing Finance Agencies