Section 10315. Set-asides and Apportionments.

CTCAC will accept applications from Qualified Nonprofit Organizations for the Nonprofit set-aside upon the request of the qualified applicant, regardless of the proposed housing type. Thereafter, CTCAC shall review each non-rural pending competitive application applying as an at-risk or special needs housing type under subsection (h) below, first, within that housing type’s relevant set-aside. Non-rural applicants meeting the criteria for both the special needs and at-risk housing types pursuant to Section 10325(g) may request to be considered in both set-asides. Applicants receiving an award from either the At-Risk or Special Needs set-aside shall be considered as that housing type for purposes of paragraph (h).

• (a) Nonprofit Set-Aside. Ten percent (10%) of the Federal Credit Ceiling for any calendar year, calculated as of February first of the calendar year, shall be set-aside for projects involving, over the entire restricted use period, Qualified Nonprofit Organizations as the only general partners and developers, as defined by these regulations, and in accordance with IRC Section (42)(h)(5).

• (b) Nonprofit Set-Aside Homeless Assistance Project Priority.

  • (1) Each funding round, credits available in the Nonprofit set-aside shall be prioritized for qualified Homeless assistance , meaning the greater of 15 Low-Income Units or twenty-five percent (25%) of the Low-Income Units within the project are designated for people experiencing Homelessness and the average targeted income for those units is no more than forty percent (40%) AMI, in the following priority order:

    • (A) Qualified Homeless assistance projects with 1) McKinney-Vento Homeless Assistance Act, HCD Multifamily Housing Program (MHP), HCD Veterans Housing and Homeless Prevention Program (VHHP), HCD Homekey, Mental Health Services Act (MHSA), CalHFA Local Government Special Needs Housing Program, Governor’s Homeless Initiative, Housing for a Healthy California, or HCD No Place Like Home development capital funding committed of at least $500,000 or $10,000 per unit for all Low-Income Units in the project, whichever is greater; or 2) projects with rental or operating assistance funding commitments from federal, state, or local governments where the rental assistance is sponsor-based or project-based and the remaining term of any project-based assistance contract is no less than one (1) year and applies to no less than twenty-five percent (25%) of the Low-Income Units in the proposed project. For local government funding sources, ongoing assistance may be in the form of a letter of intent from the governmental entity.

    • (B) Second priority will be given to other qualified Homeless assistance projects.

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• (2) For all projects receiving a reservation under (b)(1)(A) or (B), owners, property managers, and service providers shall comply with the core components of Housing First and the tenant selection requirements of Section 10336(b)(2)(B)(ii).

• (c) Rural set-aside. Twenty percent (20%) of the Federal Credit Ceiling for any calendar year, calculated as of February first of the calendar year, shall be set-aside for projects in rural areas as defined in H & S Code Section 50199.21 and as identified in supplemental application material prepared by CTCAC. For purposes of implementing Section 50199.21(a), an area is eligible under the Section 515 program on January 1 of the calendar year in question if it either resides on the Section 515 designated places list in effect the prior September 30, or is so designated in writing by the USDA Multifamily Housing Program Director. All Projects located in eligible census tracts defined by this Section must compete in the Rural set-aside and will not be eligible to compete in other set-asides or in the geographic areas unless they are not awarded in the Rural set-aside and they qualify to compete in the At-Risk set-aside by meeting the At-Risk housing type requirements under Section 10325(g)(4), in which case they will no longer be considered rural in that set-aside and will be evaluated as such for purposes of these regulations; or the Geographic Region in which they are located has had no other Eligible Projects for reservation within the current calendar year. In such cases the rural project may receive a reservation in the last round for the year, from the geographic region in which it is located, if any.

Within the Rural set-aside competition, the first tiebreaker shall be applied as described in Section 10325(c)(9), except that the Seniors, Large Family New Construction in Highest or High Resource Tract, and Acquisition and/or Rehabilitation housing type goals established by Section 10315(h) shall be calculated relative to the Rural set-aside dollars available each round, rather than against the total credits available statewide each round.

• (1) RHS, HOME, and CDBG-DR program apportionment. In each reservation cycle, fourteen percent (14%) of the rural set-aside shall be available for new construction projects which have a funding commitment from RHS of at least $1,000,000 from either RHS’s Section 514 Farm Labor Housing Loan Program, RHS’s Section 515 Rural Rental Housing Loan Program, or a reservation from a Participating Jurisdiction or the State of California of at least $1,000,000 in HOME or CDBG-DR funding.

All projects meeting the RHS, HOME, and CDBG-DR program apportionment eligibility requirements shall compete under the RHS, HOME, and CDBG-DR program apportionment. Projects that are unsuccessful under the apportionment shall then compete within the general rural set-aside described in subsection (c). Any amount reserved under this subsection for which RHS, HOME, or CDBG-DR funding does not become available in the calendar year in which the reservation is made, or any amount of Credit apportioned by this subsection and not reserved during a reservation cycle shall be available for applications qualified under the Rural set-aside.

within the general rural set-aside described in subsection (c). Any amount reserved under this subsection for which RHS, HOME, or CDBG-DR funding does not become available in the calendar year in which the reservation is made, or any amount of Credit apportioned by this subsection and not reserved during a reservation cycle shall be available for applications qualified under the Rural set-aside.

• (2) Native American apportionment. In each reservation cycle starting in 2024 and each year thereafter, ten percent (10%) of the rural set-aside shall be available for applications proposing projects on land to be owned by a Tribe, whether the land is owned in fee or in trust, and in which occupancy will be legally limited to tribal households, except that up to 20% of Low-Income Units may serve non-tribal households if required by the HOME Program. Apportioned dollars shall be awarded to projects sponsored by Tribes using the scoring criteria in Section 10325(c), and achieving the minimum score established by CTCAC under Section 10305(h). In addition, the application shall receive the minimum points available for both general partner and management company experience under Section 10325(c)(1), except that the management company minimum scoring cannot be obtained through the point category for a housing tax credit certification examination.

• (d) At-Risk set-aside. After accounting for the second supplemental set-aside described in (g), five percent (5%) of the Federal Credit Ceiling for any calendar year, calculated as of February first of the calendar year, shall be set aside for projects that qualify and apply as an At-Risk housing type pursuant to subsection (h) below. Any proposed project that applies and is eligible under the

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Regulations Section 10315

Nonprofit set-aside or Rural set-aside but is not awarded credits from that set-aside shall be eligible to be considered under this At-Risk set-aside if the project meets the housing type requirements in Section 10325(g)(4). Rural projects competing in the At-Risk set-aside shall only be considered if credits remain after awarding all eligible non-rural projects. Rural projects competing in the At-Risk set-aside that are not awarded from the At-Risk set-aside are not eligible to compete in other setasides or in the geographic areas unless the Geographic Region in which they are located has had no other Eligible Projects for reservation within the current calendar year. In such cases, the rural project may receive a reservation in the last round for the year, from the geographic region in which it is located, if any.

• (e) Special Needs set-aside. After accounting for the second supplemental set-aside described in (g), four percent (4%) of the Federal Credit Ceiling for any calendar year, calculated as of February first of the calendar year, shall be set aside for projects that qualify and apply as Special Needs. Any proposed Special Needs project that applies and is eligible under the Nonprofit set-aside, but is not awarded credits from that set-aside, shall be eligible to be considered under this Special Needs set-aside.

(4%) of the Federal Credit Ceiling for any calendar year, calculated as of February first of the calendar year, shall be set aside for projects that qualify and apply as Special Needs. Any proposed Special Needs project that applies and is eligible under the Nonprofit set-aside, but is not awarded credits from that set-aside, shall be eligible to be considered under this Special Needs set-aside.

• (f) First supplemental set-aside. After accounting for the second supplemental set-aside described in (g), an amount equal to three percent (3%) of the Federal Credit Ceiling for any calendar year, calculated as of February first of the calendar year, shall be held back to fund overages that occur in the second funding round set-asides and/or in the Geographic Apportionments because of funding projects in excess of the amounts available to those Set Asides or Geographic Apportionments, the funding of large projects, such as HOPE VI projects, or other Waiting List or priority projects. In addition to this initial funding, returned Tax Credits and unused Tax Credits from Set Asides and Geographic Apportionments will be added to this Supplemental Set Aside, and used to fund projects at year end so as to avoid loss of access to National Pool credits.

• (g) Second supplemental set-aside. For each calendar year an amount of the Federal Credit Ceiling determined by the Executive Director, calculated as of February first of the calendar year, shall be held back to fund projects designated as DDA project pursuant to Section 10327(d)(3).

• (h) Housing types. To be eligible for Tax Credits, all applicants must select and compete in only one of the categories listed below, exclusive of the Acquisition and/or Rehabilitation and Large Family New Construction located in a Highest or High Resource Area housing types which are listed here solely for purposes of the tiebreaker in Section 10325(c)(9), and must meet the applicable “additional threshold requirements” of Section 10325(g), in addition to the Basic Threshold Requirements in 10325(f). The Committee will employ the tiebreaker at Section 10325(c)(9) in an effort to assure that no single housing type will exceed the following percentage goals where other housing type maximums are not yet reached:

For purposes of the Acquisition and/or Rehabilitation Housing Type goal within the Rural set aside, a project will be considered an acquisition and/or rehabilitation project if at least 50% of the units were previously residential dwelling units.

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Regulations Section 10315 - 10317

A large family new construction project that receives a tiebreaker increase in Section 10325(c)(9) for being located in a Highest or High Resource census tract shall count against both that housing type and the general Large Family housing type.

• (i) Geographic Apportionments. Annual apportionments of Federal and State Credit Ceiling shall be made in approximately the amounts shown below:

• (j) Credit available for geographic apportionments. Geographic apportionments, as described in this Section, shall be determined prior to, and made available during each reservation cycle in the approximate percentages of the total Federal and State Credit Ceiling available pursuant to Subsection 10310(b), after CTCAC deducts the federal credits set aside in accordance with Section 10315(a) through (g) from the annual Credit Ceiling.

Note: Authority cited: Section 50199.17, Health and Safety Code; Sections 12206, 17058 and 23610.5, Revenue and Taxation Code.

Reference: Sections 12206, 17058 and 23610.5, Revenue and Taxation Code; and Sections 50199.4, 50199.5, 50199.6, 50199.7, 50199.8, 50199.9, 50199.10, 50199.11, 50199.12, 50199.13, 50199.14, 50199.15, 50199.16, 50199.17, 50199.18, 50199.20, 50199.21 and 50199.22, Health and Safety Code.