Small Deal Fund – Frequently Asked Questions How old does a building have to be to qualify for the federal rehabilitation credit? Age is not the issue—it is a factor, but there are other factors as well. The building must either be located in a historic district and contribute to the historic significance of the district or be listed on the National Register to be deemed a certified historic structure eligible for the 20% federal rehabilitation credit. In some instances the National Park Service has approved rehabilitation plans for buildings constructed post 1950. Developers are strongly encouraged to consult the National Park Service in advance of any rehabilitation project, regardless of the perceived historic nature of the building, as it may well qualify for the federal rehabilitation credit. What Standards must a developer meet to have the project qualify as a “certified rehabilitation”?
The historic character of a property shall be retained and preserved. The removal of historic materials or alteration of features and spaces that characterize a property shall be avoided. Each property shall be recognized as a physical record of its time, place, and use. Changes that create a false sense of historical development, such as adding conjectural features or architectural elements from other buildings, shall not be undertaken. Most properties change over time; those changes that have acquired historic significance in their own right shall be retained and preserved. Distinctive features, finishes, and construction techniques or examples of craftsmanship that characterize a historic property shall be preserved. Deteriorated historic features shall be repaired rather than replaced. Where the severity of deterioration requires replacement of a distinctive feature, the new feature shall match the old in design, color, texture, and other visual qualities and, where possible, materials. Replacement of missing features shall be substantiated by documentary, physical, or pictorial evidence. Chemical or physical treatments, such as sandblasting, that cause damage to historic materials shall not be used. The surface cleaning of structures, if appropriate, shall be undertaken using the gentlest means possible. Significant archeological resources affected by a project shall be protected and preserved. If such resources must be disturbed, mitigation measures shall be undertaken. New additions, exterior alterations, or related new construction shall not destroy historic materials that characterize the property. The new work shall be differentiated from the old and shall be compatible with the massing, size, scale, and architectural features to protect the historic integrity of the property and its environment. New additions and adjacent or related new construction shall be undertaken in such a manner that if removed in the future, the essential form and integrity of the historic property and its environment would be unimpaired.
A qualified rehabilitation expenditure is a cost or expense that is “properly chargeable to capital account” for certain classes of depreciable real estate. For example, expenditures for improvements to the structural components typically qualify. Similarly, expenditures for site survey fees, legal fees, architectural and engineering fees, insurance premiums, development fees and other construction related costs will qualify if they are added to the basis of the property. Examples of expenses or costs that would not be counted include land and interest carry on land, building acquisition costs and interest carry, enlargements and demolition, expenditures related to installation of parking, sidewalks, landscaping and other improvements not related to the historic structure. Placement in service. CO (certificate of occupancy), TCO (temporary certificate of occupancy) or U & O (use and occupancy certificate) would be evidence of placement in service. When should I bring my project to the Fund? Any time during the development process, however, before serious consideration can be given to a project you will need to have the following: • Part I and II from the National Park Service Will the Fund share in cash flow from the project? The Fund receives a $1,000 annual Asset Management Fee to cover costs, and an annual 3% return on capital invested in the project. So what is my net price? A project with $1,000,000 in credits allocated to the Fund will net approximately $.60/$1.00 of credits, as shown below:
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The property shall be used for its historic purpose or be placed in a new use that requires minimal change to the defining characteristics of the building and its site and environment. 
What are “qualified expenditures” on a typical small historic project?
