(a)

1. (1) As the administrator of the low-income housing tax credit and HOME Investment Partnerships Program funds, Arkansas Development Finance Authority determines the reasonableness of project costs, both hard and soft costs, annually by comparing aggregate cost data based on all applications received compared to historical cost certification data of completed projects and current cost data provided by the authority’s third-party construction consultant reports.
2. (2) The authority has used the same methodology in determining the maximum per-unit development subsidy limit for housing assisted with national Housing Trust Fund funds for all areas of the state.

(b)

1. (1) No single recipient may receive more than one million dollars ($1,000,000).
2. (2) However, the authority has the right to waive this per-recipient allocation cap.

(c)

1. (1) Per-unit cost is calculated by dividing the total development cost by the total number of units.
2. (2) The maximum per-unit development subsidy limit is adjusted every two (2) years through the Arkansas Administrative Procedure Act, Arkansas Code § 25-15-201 et seq., also known as the “APA” process.
3. (3) The authority’s maximum costs limits are deemed reasonable, based on actual costs, and adjusted at time of staff underwriting for the number of bedrooms and geographic location of the project. Maximum Cost Per Unit and Minimum Area Requirements

   Property Type	#Bedrooms	#Baths	Min.Bedroom Net Area	Max.Cost Per Unit
   Rental Unit	3-4	2	120 sq. ft.	$151,000
   Rental Unit	1-2	1-2	120 sq. ft.	$120,000
   SFD	3-4	2	120 sq. ft.	$162,000
   SFD	2	1-2	120 sq. ft.	$140,000
   Assisted Living	1	1	120 sq. ft.	$179,000

   Unit areas do not include outside storage, covered porches, patios, balconies, etc.

(d)

1. (1) At time of the authority’s underwriting of each application, the costs are thoroughly reviewed and adjusted for under-estimates or excessive costs.
2. (2) The authority uses discretion to determine reasonableness of all costs stated in the proposed development budget regardless of whether the costs per unit comply with the maximum costs per unit limitation set forth above.
3. (3) The authority may, within its discretion, deny applications based upon the unreasonableness of costs, regardless of whether the costs per unit complies with the maximum costs per unit limitation set forth above.
4. (4) Upon request by the authority’s staff, applicants may provide justification and supporting documentation of costs.
5. (5) The authority will review the items submitted and make a final determination.
6. (6) The authority’s determination will be set forth in writing as to whether the application will be further considered or rejected.