Site sourcing and screening — South Dakota

A QAP that is short on checklists and long on discretion

The governing document for this research is the 2026-2027 Qualified Allocation Plan, approved by the SDHDA Board of Commissioners on June 15, 2026 and posted as a finalized PDF (internal filename "2026-2027 HTC QAP Final 072026.docx") on August 20, 2026. It is published at sdhousing.org -- the agency's own web presence has been rebranded "SD Housing," and the older sdhda.org domain now 301-redirects there, so a bookmarked or third-party-mirrored sdhda.org link should be treated as pointing at a redirect, not a distinct, possibly stale, copy. No amendment postdating the August 2026 PDF was found in this pass; the QAP's own amendment provision (Section I.R) allows the SDHDA Board to amend at any time following public notice and a public meeting, with substantive amendments additionally requiring the Governor's approval, so a screen started well into this two-year cycle should still check sdhousing.org directly rather than assume the document is frozen.

Section III.G, "Site Suitability," reads in full: "The proposed site must be suitable for the proposed project. SDHDA may reject an application if any detrimental site characteristic exists on or adjacent to the site." That is the entire provision -- no named hazards, no distance standards, no flood-zone rule, no reference to a state or federal environmental checklist. This is a real and confirmed absence, not a gap in this research: the words "environmental," "Phase I," "flood," and "wetland" do not appear anywhere else in the QAP's 67 pages. A South Dakota screen cannot lean on the QAP for a hazard checklist the way a screen in a state with an explicit environmental manual can; it has to import its own standard, knowing that SDHDA's own bar for rejecting a site is whatever it decides, at the time, counts as "detrimental."

The one federal mechanism every screen still has to check is the automatic 30% basis boost for sites in a federal Qualified Census Tract (QCT) or Difficult Development Area (DDA) under 26 U.S.C. Section 42(d)(5)(B) -- it requires no SDHDA action and the QAP does not separately administer it. This research was not able to confirm, from a live, current HUD source, which specific South Dakota tracts or counties carry a QCT or DDA designation for the current allocation year; HUD redetermines both designations annually, and older published nonmetro DDA lists (2001-2005) have shown Butte, Lawrence, and Meade counties -- all in the Black Hills, near Rapid City -- carrying the nonmetro DDA designation in those years. That historical pattern should not be treated as current fact. Any given site's QCT/DDA status should be checked directly against HUD's own lookup tool at the time of screening, not assumed from an old list or from this document.

Where the real points are: Project Location and Local Housing Need

Two scoring categories in Section V do the work a dedicated amenity table does in other states, and together with everything else in the QAP they compete for a place above a minimum score. Section V's own text states applications "must obtain a minimum of 400 points to be considered for award." Exhibit 7, the Self-Scoring Worksheet, states separately that a "minimum score of 350 [is] required for submission." The QAP does not reconcile these two numbers anywhere in its text -- they may be two different gates (a lower floor to submit, a higher floor to actually be considered for an award) or an unresolved drafting inconsistency, and this research did not find language resolving which. A screen sizing up whether a site's likely score clears the real bar should target 400, not 350, and confirm the distinction with SDHDA directly rather than assume either figure alone controls.

Local Housing Need (Section V.E, up to 100 points) is the single largest category in the entire point structure and the vaguest: "SDHDA will award the highest score to projects considered to be facing the highest overall need," with no published rubric for how need is measured. The one hard rule attached to it is a market-saturation check worth building into screening directly: "All communities with two or more low-income housing projects under construction or in the process of rent-up (less than 90% occupied) may receive zero points in this category." A site in a small community that already has two LIHTC projects mid-construction or still leasing up is a real risk to the single largest scoring category available, independent of the site's own merits.

Sparse population, nine tribal nations, and the Rural/Tribal Set-Aside

Outside Sioux Falls and Rapid City, South Dakota is overwhelmingly rural, and a meaningful share of that rural land is also tribal land. The South Dakota Department of Tribal Relations' own list names nine tribes: Cheyenne River, Crow Creek, Flandreau, Lower Brule, Oglala, Rosebud, Sisseton Wahpeton, Standing Rock, and Yankton. Five South Dakota counties sit entirely within a single reservation: Oglala Lakota County (Pine Ridge Indian Reservation, Oglala Sioux Tribe), Todd County (Rosebud Indian Reservation), Corson County (part of Standing Rock Indian Reservation), Dewey County, and Ziebach County (the latter two both part of the Cheyenne River Indian Reservation). A screen that treats "rural South Dakota" as a single undifferentiated category will miss that a meaningful share of it is also Indian country with its own government, land-title system, and (per Phase 2 and Phase 3 of this guide) documentation requirements that diverge from a standard county-recorded deal.

SDHDA's own set-aside structure recognizes this directly. Section I.D.2, "Rural / Tribal Set Aside," states: "SDHDA will set aside up to 20% of the total annual tax credits available for the highest scoring project located in a rural community with a population of less than 5,000 or on tribal land, either held in trust or fee-simple, and within the exterior boundaries of an Indian Reservation. The application must meet the minimum scoring criteria. Any amount not used will revert to the general pool." Two details matter at the screening stage: the set-aside is sized for a single project ("the highest scoring project," singular, not a pool split among every qualifying applicant), and qualification still requires clearing the QAP's general minimum-score threshold discussed above -- the set-aside changes which pool of credits a winning application draws from, not the scoring bar it has to clear to win.