This blog takes a look at Phius-related policy advancements in several states and the impact on Phius' growth in those areas.
This week’s blog provides a brief explanation of low-income housing tax credits (LIHTCs) and qualified allocation plans (QAPs) and examines how each impacts Phius-related policy. It also highlights some recent Phius-related policy updates in Minnesota, Michigan, Wisconsin and Arizona.
LIHTCs are part of a federal policy passed by Congress in 1986 designed to provide capital funding for the construction and rehabilitation of low-income housing. These federal tax credits are distributed through state housing agencies, and each state adopts its own unique criteria that often, but not always, uses a point system.
QAPs are documents that outline the criteria used by state housing agencies to determine which projects should be awarded LIHTCs. As mentioned above, the criteria outlined in QAPs is often a point-based system and generally, the more points one project can obtain, the more likely it is to be selected for an LIHTC award.
Many affordable housing projects rely heavily on LIHTCs for funding. Project teams aim to maximize the amount of points they can achieve to increase their chances of receiving a LIHTC award. Oftentimes, QAPs are broken out into various sections (i.e. transportation, access to amenities, design characteristics, green policies, etc) with each section often creating a hierarchy of importance and/or difficulty.
The Phius policy team mostly focuses on the green or energy related sections, striving to get Phius Certification included in the scoring criteria. If Phius is already written in, the goal is to modify the existing language and point structure to better incentivize Phius by increasing the point value of Phius Certification.
Overall, the goal of getting Phius included in QAPs is to create more Phius projects. The section below highlights one state in particular where the QAP has produced a number of projects, and two states that exemplify the process of getting Phius written into QAPs.
Minnesota’s 2026-2027 QAP includes an “Enhanced Sustainability” section that is broken into four tiers: Tier 1 (worth 2 points), Tier 2 (worth 4 points), Tier 3 (worth 6 points), and Tier 4 (worth 8 points). Phius is written into Tier 4, which has led to three different projects beginning the Phius certification process. These projects are currently registered with Phius and will begin the Design Certification process in the near future.
In Michigan, both the 2024-2025 and 2026-2027 QAPs have an Energy Efficient Building Policy that includes threshold requirements and optional scoring items. There are five optional scoring items in this section, with Phius Certification being the highest scored item at 4 points. Similarly to Minnesota, Phius being written into Michigan’s QAP has allowed for another project to begin the Phius Certification process. This project is already Design Certified with the expectation of being fully Certified in the near future.
For the 2025-2026 QAP, Wisconsin included an additional appendix, Appendix W - Energy Efficiency and Sustainability. In Appendix W, Phius is listed as a “threshold certification requirement,” an “advanced certification,” and “net zero certification.”
There are four threshold certification requirements, and any project applying for the LIHTC must achieve at least one. There are also four advanced certification options that award 10 extra points to teams who achieve them. This structure allows for teams whose projects achieve Phius CORE certification to meet not only the threshold requirement, but also receive an additional 10 points without anything beyond achieving Phius Certification. Additionally, Phius ZERO certification is worth 20 points.
Though the final 2026-2027 QAP has yet to be released, the Phius policy team recently joined a focus group meeting through the Arizona Department of Housing to offer advice on how to restructure Arizona’s energy efficiency section. Phius certification was already written into the existing language, so the focus was to improve Phius’ position.
The strategy here was to propose a tiered system that laid out threshold requirements – a 5-point tier, a 10-point tier, a 15-point tier, and a 20-point tier. The thought process behind this strategy was to use the diagram below to create building blocks within the tiers. For example, the building blocks to reach Phius would look like the following:
As of this writing, the Arizona Department of Housing is in the process of finalizing and releasing the 2026-2027 QAP.
As of today, there are more than 20 states that include Phius in their QAPs. It’s our goal, as we cover more ground in new and existing QAPs, to broaden familiarity with Phius as a certification standard and to generate more Phius projects by advocating for policies that incentivize Phius certification. To stay up to date with the QAPs that include Phius, visit the Phius Policy Database.
