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2. Significant parties who are currently debarred from any Minnesota program, other states' program(s), <br />or any federal program(s); <br />3. At the sole discretion of Minnesota Housing, significant parties who have serious and persistent <br />compliance monitoring violations may not be eligible; or <br />4. At the sole discretion of Minnesota Housing, significant parties having an Identity of Interest with <br />persons or entities falling into any of the above categories may not be eligible. <br />K. Determination of Credit Amount <br />Federal law mandates that, although a proposed project may be eligible for up to 70 percent or up to 30 percent <br />present value credit amount, Minnesota Housing may not allocate more credit than is necessary for the financial <br />feasibility of the project and its viability as a qualified affordable housing project throughout the compliance <br />period. <br />After a project meets the development selection criteria, including marketability, Minnesota Housing will <br />evaluate each proposed project, taking into consideration: <br />1. Development costs, including developer fees, builder profits, contractor overhead, and general <br />conditions. <br />2. All sources and uses of funds. <br />3. Projected income and expenses. <br />4. Proceeds expected to be generated from the sale of tax credits, including historic tax credits. <br />5. The difference between total project costs and total available financing resources, which is referred to <br />as the GAP. A calculation is made to determine the amount of tax credits needed by the project to fund <br />the GAP over a ten-year period, based on the estimated market value of the tax credits. <br />Based on this evaluation, Minnesota Housing will estimate the amount of credit to be reserved for each <br />application. This determination is made solely at Minnesota Housing's discretion and is not a <br />representation as to the feasibility of the project. Rather, it will serve as the basis for making a <br />reservation of credits. The amount of the tax credit can change during the process due to variations in <br />cost, mortgage amount, tax credit percentage, syndication proceeds, etc. <br />This analysis to determine the maximum amount of tax credits must be performed by both Minnesota <br />Housing and the owner/developer at the time of application, at the time a carryover allocation is <br />approved, and at the time the project is placed in service, providing all project costs are finalized and <br />certified. <br />If there are changes in resources and/or uses of funds or other material changes, Minnesota Housing <br />will adjust the tax credit amount to reflect the changes, and the tax credit may be reduced. Tax credit <br />amounts will not automatically be increased above the initial reservation request or allocation amount. <br />Requests for additional tax credits for the project must follow the procedures in Chapter 3.L of the <br />manual and will depend upon the availability of credits. <br />L. Requests for Additional Credit Amounts <br />Projects that have had a justifiable increase in eligible basis or previously received a partial allocation may be <br />eligible to apply for supplemental tax credit amounts. To receive a supplemental tax credit amount, the owner <br />must submit an application when applications are due for Round 1, Round 2, or at the time the carryover <br />application is submitted. <br />9 12012 Housing Tax Credit Procedural Manual Rev. 04/2011 <br />