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areas designated as a QCT, DDA or developments utilizing the State designated basis boost may be eligible for an <br />increase in allowable basis. <br />M. Qualified Basis <br />Qualified basis is the portion of the eligible basis applicable to low income housing units in a building. Qualified <br />basis is the product of a project's eligible basis multiplied by the applicable fraction. <br />N. Applicable Fraction <br />The applicable fraction is the lesser of: <br />1. The unit fraction, which is the number of low-income units in a building divided by the total number of <br />residential rental units; or <br />2. The floor space fraction is the total floor space of the low-income units in the building divided by the <br />total floor space of the residential rental units in the building. <br />A full time resident manager's unit is not considered a residential unit and must not be included in the <br />numerator or denominator for calculating the applicable fraction. <br />Throughout the planning, construction and placed in service periods, the applicable fraction has different <br />nuances. At initial application and at carryover, the "estimated project applicable fraction" will be used. It is an <br />approximate goal that the developer is striving to attain. It is calculated by project in order to obtain a rough <br />estimate of the percentage of eligible units and square footage needed and an estimate of the total amount of <br />tax credits necessary for a particular project. <br />At the time that the placed in service application for 8609 is made, the "targeted applicable fraction" for each <br />building is calculated. The targeted applicable fraction is determined on a building -by -building basis. Each <br />building in a multiple building development could have a different applicable fraction. Because the estimated <br />project applicable fraction is approximate, the targeted applicable fraction calculated by building will frequently <br />differ unless the project has a 100 percent applicable fraction. The targeted applicable fraction is also listed as <br />part of the extended use criteria in the Declaration of Land Use Restrictive Covenants, which is recorded and <br />remains with the property. <br />O. Economically Integrated Projects <br />Project Economic Integration: <br />Projects under common ownership and management that have tax credit units and market rate units are <br />considered to be economically integrated. These projects receive priority points for selection. (See Selection <br />Priority #5, Self -Scoring Worksheet.) In an economically integrated project each building must have an <br />applicable fraction of less than 100 percent. Unless otherwise approved by Minnesota Housing, all buildings <br />must be expected to have comparable applicable fractions with necessary variations due to building size. The <br />number of tax credit units will be determined by the developer. A complete application for the entire project <br />will be necessary at the time of application. HTC selection points will generally be based upon the characteristics <br />of only the tax credit units, with the exception of economic integration points and similarly classed categories. <br />Note: The actual number of restricted units within the project must be consistent from selection, through <br />carryover and to approval of an 8609 and maintained throughout the term of the declaration. <br />Community Economic Integration: <br />Projects located in higher income communities that are close to jobs are considered to promote economic <br />integration. Projects with these characteristics are awarded points for being located in such communities (refer <br />to the methodology description, maps and census tract list attachments referenced in the Self -Scoring <br />Worksheet). <br />21 12012 Housing Tax Credit Procedural Manual Rev. 04/2011 <br />