A Qualified Allocation Plan (QAP) is the framework a state housing agency uses to establish priorities and criteria for awarding Low-Income Housing Tax Credits (LIHTC) to affordable housing developments. Because demand for LIHTC funding often exceeds the amount of credits available, the QAP plays an important role in determining which developments receive an allocation.
For affordable housing developers, understanding the QAP early in the development process can help inform decisions about project location, design, energy performance, resident services, financing, and other characteristics that may affect an application.
Below is an overview of what a QAP is, how it relates to LIHTC, and why it matters for affordable housing development.
What Is a Qualified Allocation Plan (QAP)?
A Qualified Allocation Plan, commonly referred to as a QAP, is a document developed by a state housing credit agency that outlines how the agency will evaluate and allocate its available LIHTCs.
Federal law establishes the overall requirements for the LIHTC program, but each state develops its own QAP to reflect its housing priorities and needs.
As a result, QAP criteria can vary significantly by state. A development that is competitive for LIHTC in one state may face different scoring criteria, thresholds, or priorities in another.
How Does a QAP Relate to LIHTC?
The Low-Income Housing Tax Credit is a federal tax incentive designed to encourage the development and preservation of affordable rental housing. State housing agencies are responsible for allocating the available credits to qualifying developments.
The QAP provides the framework those agencies use to make allocation decisions.
Depending on the state and type of LIHTC application, the QAP may establish mandatory thresholds that a project must satisfy as well as competitive scoring opportunities that can help one development rank above another.
Because LIHTCs are limited, understanding the state's QAP can be an important part of developing a competitive affordable housing project.
What Does a QAP Include?
Each state's LIHTC Qualified Allocation Plan is different, but QAPs commonly address areas such as:
- Project location and housing needs
- Development and construction requirements
- Affordability levels
- Resident populations and services
- Financial feasibility
- Development team experience
- Accessibility
- Energy efficiency and sustainability
- Green building standards and certifications
- Long-term affordability
A QAP may also identify specific preferences or set-asides for certain types of affordable housing, geographic areas, or populations.
Developers should review the applicable QAP carefully because criteria, scoring, and available options can change between allocation cycles.
How Do QAPs Affect Affordable Housing Development?
A QAP can influence decisions well before an LIHTC application is submitted.
For example, the location of a proposed development may affect its score based on proximity to transportation, schools, employment, grocery stores, healthcare, or other community resources. A state may also award points for developments serving specific populations or addressing identified housing needs.
Building design and energy performance can also play a role. Depending on the state, a QAP may identify available energy certifications, green building programs, or performance standards that can contribute to project eligibility or competitive scoring.
Understanding these provisions early allows developers to evaluate which options align with the project's design, budget, construction schedule, and LIHTC strategy.
How Do Energy Certifications Relate to QAPs?
Energy efficiency and green building standards are incorporated into many state QAPs, but the specific programs and treatment can vary.
A QAP may reference certifications or standards such as ENERGY STAR®, National Green Building Standard (NGBS), Leadership in Energy and Environmental Design (LEED®), Enterprise Green Communities, Zero Energy Ready Home, or other state-specific programs and performance pathways.
These options should be evaluated during the planning and design stages when possible. Waiting until construction is underway may limit which certifications or pathways remain practical for a project.
It is also important to distinguish between what is available under a state's QAP and what is required. A QAP may offer several pathways or opportunities for additional scoring without requiring every development to pursue the same certification.
Why Should Developers Review the QAP Early?
The QAP can affect site selection, design, financing, construction, energy strategy, and the overall competitiveness of an LIHTC application.
Reviewing the QAP early gives the development team time to identify relevant criteria and determine how they fit into the broader project strategy.
This can be particularly important for energy certifications and building performance requirements because programs require decisions, modeling, documentation, inspections, and verification at specific stages of design and construction.
Do QAP Requirements Vary by State?
Yes. Qualified Allocation Plans vary by state, and state housing agencies may revise their QAPs from one allocation cycle to another.
Developers working across multiple states should not assume that the same LIHTC strategy, certification, or scoring approach will apply to every project.
Reviewing the current QAP and related program guidance for the state where the development is located is important when determining the options available for a specific affordable housing project.
QAP and LIHTC Planning
The Qualified Allocation Plan is an important part of the LIHTC process, providing the framework state housing agencies use to evaluate affordable housing developments and allocate available tax credits.
For developers, understanding the QAP early can help identify opportunities related to project design, energy performance, certifications, and other criteria that may influence an LIHTC application.
Source Advisors works with affordable housing developers and project teams to evaluate energy certification options available under state QAPs and determine which pathways may align with the project's design, schedule, and broader LIHTC strategy. Early coordination can help development teams understand available certification options before key design and construction decisions are made.
