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New Construction or Substantial
<br />Rehabilitation
<br />Units 51 and over
<br />8%
<br />Consultant Fees: Consultant application processing fees will be included within the developer fee limitation and
<br />should not exceed 2 percent of total mortgageable costs. Syndication related consultant fees are not to be
<br />included in the eligible basis of the project.
<br />Net Construction Cost: Construction costs and on -site work not including contractor profit, general
<br />requirements, and overhead. Minnesota Housing will limit the amount of contractor fees for the purpose of
<br />calculating eligible basis to determine the amount of tax credit.
<br />Contractor Profit: The maximum contractor profit is 6 percent of net construction costs.
<br />General Requirements: Items of costs to be considered in this allowance include: on -site supervision, signs, field
<br />office expenses, temporary sheds and toilets, temporary utilities, equipment rental, clean-up costs, rubbish
<br />removal, permits, watchmen's wages, material inspection and tests, all of the builder's insurance (except
<br />builder's risk), temporary walkways, fences, roads and other similar expenses. The maximum general
<br />requirements allowed is 6 percent of the net construction cost.
<br />Contractor Overhead: Minnesota Housing allows a contractor an overhead allowance based on a percentage of
<br />the net construction cost. The permitted maximum allowance is 2 percent.
<br />It is possible to exceed expenses in one area, if other areas are not at their maximum. Minnesota Housing will
<br />allow the collective balance of contractor profit, general requirements and contractor overhead to equal 14
<br />percent.
<br />Developer as Contractor: When the developer and the contractor are the same entity, in addition to the fee
<br />limits stated above, the combined balance of developer fee, contractor profit, contractor overhead and general
<br />requirements may not exceed 20 percent of the total development cost.
<br />Total Mortgageable Cost: The following is a partial listing of cost items that are mortgageable within total
<br />development costs:
<br />1. Construction costs, including material and labor costs for all residential structures site preparation,
<br />residential parking facilities and site improvements, demolition, general requirements, general
<br />contractor's overhead, and profit;
<br />2. Fees, including architectural design and construction administration, soils exploration, environmental
<br />analysis, survey, attorney, and other consultant fees, Housing Tax Credit Program syndication fees,
<br />developer's fees (subject to maximum amounts set by Minnesota Housing), reasonable marketing costs,
<br />and contractor's bond premium;
<br />3. Financing and carrying costs, including interest during construction, insurance, real estate taxes,
<br />Minnesota Housing financing and inspection fees, title and recording costs, and where applicable, the
<br />Development Contingency fund(Minnesota Housing retains the right to limit carrying costs);
<br />4. Land and improvements, building acquisition, subject to Minnesota Housing property valuation policy;
<br />5. Development Cost Escrow (DCE);
<br />6. Furnishings and equipment; and
<br />7. Cost of providing Letters of Credit.
<br />2012 Housing Tax Credit Procedural Manual I 26
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