info@desertskiesenergy.com
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LOW INCOME HOUSING TAX CREDIT

Each year, the United States Department of Housing and Urban Development (HUD) allocates funding to the states for low income housing assistance.  Desert Skies Energy works closely with the Arizona Department of Housing to provide mandatory energy services for Low Income Housing Tax Credit (LIHTC) projects.

ADOH publishes the annual Qualified Allocation Program or QAP once per year– this document serves as the guidelines for the LIHTC program.  The QAP provides exact instructions for any project owner seeking tax credits. Regardless of whether your project is seeking 4% or 9% tax credits, we are able to help guide you through the program specifically helping you satisfy the utility allowance schedule for tenant paid utilities as well as the energy modeling for ensuring the project meets the energy requirements.

Desert Skies Energy has been providing LIHTC services since 2014 with two core focuses:

  1. Satisfy and fulfill all ADOH requirements to help ensure project is awarded
  2. Deliver consulting advice on a per project basis to ensure long term success

Timing of LIHTC submittals is important and we work rapidly to turn around projects in less than 2 weeks– and in extreme cases we will work evenings and weekends to ensure your project is fulfilled prior to the ADOH deadline. For new construction, we can perform our reviews from schematic plans.  For rehab properties, we will need to visit the site to conduct a preliminary site assessment.

Consulting advice is incredibly important especially for owners who are new to the LIHTC program.  We are able to guide you through the submittal process as well as the testing and inspecting required throughout the project.  With our involvement, we are able to help produce homes with low monthly utility bills — a huge win / win for owners and tenants alike. Desert Skies Energy is a RESNET Sampling Provider making us the ideal candidate for large scale projects seeking tax credits.

GREEN CERTIFICATION

There are several reasons to consider a sustainability or “green” certification for your multifamily project.  If well executed, the final product will be a more durable, lower maintenance building with lower utility bills for your tenants.

For years, sustainability certifications have been associated with high cost and unrealistic expectations.  Our team has designed an offering that eliminates both of those concerns.

Most of our projects seek sustainability certifications in order to take take advantage of the MIP reduction available through HUD financed deals.  Desert Skies Energy has partnered with Home Innovation Research Labs to offer NGBS Certification (ICC 700) for multifamily buildings. We have chosen to offer this certification in lieu of others (e.g. LEED) due to the comprehensive nature of the program and the affordability of the program.  This certification meets HUD standards for the green building requirement.

NGBS Certification requires a certified inspector to inspect 100% of multifamily units at rough for air sealing, insulation and duct sealing details.  This lofty requirement has helped our team find significant building failures such as completely disconnected ducts and entire wall systems that were sheetrocked before insulation was installed.  Our team is able to provide both the energy and sustainability inspections meaning that the process is more direct and streamlined.

Because of this level of inspections, ownership is typically drawn to this service.  Costs are controlled because we are only performing visual inspections. Diagnostic testing (e.g. blower door, duct testing) is reserved only if the project is seeking advanced certification.  Projects seeking certification that will be completed after December 31, 2021 will need to discuss additional program requirements.

Creating a spec that meets NGBS criteria can be challenging for architects and owners who are not familiar with the program.  Even if your specifications do meet the intent of the program, there are often feasibility issues that arise once the inspection process begins.  The issues that cause the most headaches are also typically the ones that occur the most frequently. It is highly advisable that you bring our team onto the project prior to the construction drawings being finalized so that we can help score the project appropriately and provide a simple and affordable spec that can be discussed with all parties.

STATEMENT OF ENERGY DESIGN INTENT (SEDI)

While the green certification gets the bulk of the attention in HUD financing, another key component is the Statement of Energy Design and Intent, or SEDI.

The SEDI only refers to the projected energy consumption of the entire building.  An energy professional must perform a whole building energy model of the design to determine the baseline.  That consumption data must then be transferred into the ENERGY STAR Portfolio Manager to compare to typical building consumption.  Ultimately, a score will be produced that will determine eligibility. If the score is too low, certain features of the building must be improved.

Because our team is made up of professionals carrying both green building and energy certifications, we are able to generate both the SEDI and green building certification for the project.  This saves time, money and cuts down on confusion between parties.

If we are involved early in the process before construction documents are underway, we will typically provide a letter of intent for your lender indicating that we are involved in the project and planning to produce both the SEDI and pursue NGBS (ICC 700) certification.  We will also provide consulting for the project in order to achieve any ownership goals including hitting the minimum lender requirements. In certain cases, this can reduce costly building design changes. We offer both building envelope, lighting and HVAC consulting.

STATEMENT OF ENERGY PERFORMANCE (SEP)

GOT A HUD LOAN AND SEEKING MIP REDUCTION? LET’S BRAKE IT DOWN BY PHASE:

  1. Design Phase – SEDI
  2. During Construction – Green Building Verification (NGBS)
  3. Post Occupancy – Annual SEP

The Statement of Energy Performance (SEP) is HUD’s way of ensuring that your project is actually performing.  Energy modeling and ENERGY STAR Portfolio Manager Scores are all estimates; HUD is concerned about actual energy consumption.  That’s why the inspections during construction are so important.

The biggest challenge for completing the annual SEP is obtaining the data from management and importing the data into the ENERGY STAR Portfolio Manager.  We must create a specific plan for this and outline the strategy in your letter of intent to your lender.

Desert Skies Energy has created a generic plan for data acquisition that works for most management companies.  We share this plan with our clients but also cross check with your management company to ensure that our plan matches their internal processes.  If it doesn’t, we’ll work to develop a custom win/win strategy that uses management’s existing processes to deliver annual utility bill data.

After 12 months of occupancy, we are able to create the SEP.  HUD requires the SEP to be delivered within 15 months of occupancy giving us a three month window for delivery.

The SEP ultimately delivers an annual ENERGY STAR Score.  A Score of 75 must be achieved each year to continue to qualify for the MIP reduction.

OUR DIFFERENCE

Our team is built to deliver on the project goals of the owner.  Once we understand the mission of ownership, we become an advocate for achieving these goals in all aspects of the project– starting with design.

Having the right specifications outlined in the construction drawings and project manuals allows for accurate billing and reduces costly change orders down the road.  It also benefits the architect to have us involved early because we can reduce the amount of RFIs that are submitted to their team during construction.

Our recommended specs are always proposed with cost and performance in mind.  We are typically advocates for a quality building shell before high efficiency mechanical equipment.  However, in most circumstances we feel a quality building shell is achievable through conventional materials.  The trick is knowing which materials to use in which circumstance– and that is part of what makes our projects successful.

Once construction is underway, we prioritize our multifamily clients.  Because NGBS certifications require 100% inspections, we are typically available within one to two days for scheduling.  Avoiding construction delays is a top priority. Our reports are sent out immediately upon completion of the inspection via email and stored on a shared Dropbox drive for all members of the project team to access.  This gives anyone with permission access to all our reports, photos and any other documentation we choose to share.

We can also evaluate your project for any local, state or utility rebates that may be available for your project.  This is entirely based on availability but we monitor these and if you are a candidate, we will let you know.

Overall, our goal is to be a one stop shop for energy and green building certifications for your multifamily projects.  We strive to always be in sync with ownership and we truly care about your project’s success.

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