The agency & primary document
- Allocating agency
- Tennessee Housing Development Agency (THDA)
- QAP / guidelines
- https://thda.org/rental-housing-partn/lihtc-allocations-qaps-and-statistics/
- Governing document
- 2026 Market Study Guidance (THOMAS Documents Page) — the QAP delegates market study rules to this standalone document
- Methodology
- NCHMA Model Content Standards
Required market study sections
Tennessee market studies follow the NCHMA Model Content Standards. The required sections are:
- Executive Summary — Concise summary of each section including data, analysis, and conclusions. 11 minimum content items including feasibility opinion, strengths/weaknesses, absorption estimate.
- Introduction and Scope of Work — Purpose, intended use, intended users, scope of work, effective date, physical inspection date.
- Project Description — Unit mix, utilities, target market, unit and community amenities, construction date. If rehab: scope of work, existing rents and vacancies.
- Location — Site description, site photos/maps, community services map, neighborhood evaluation (visibility, accessibility, crime).
- Market Area Definition — PMA description and rationale, PMA map. Extended/secondary market area if applicable.
- Employment and Economy — Employment trends, employment by sector, unemployment rates, major employers and proximity, planned expansions/reductions.
- Demographic Characteristics — Population and household estimates/projections, building permits, household characteristics (income, tenure, size). Senior/special needs: target-market data.
- Competitive Environment — Comparable profiles and photos, map of comps, vacancy and rents analysis, subject comparison, affordable housing alternatives, pipeline projects.
- Affordability Analysis, Demand Analysis, Capture Rates, and Penetration Rates — Demand estimate, affordability analysis, capture rate, penetration rate.
- Local Perspective of Rental Housing Market and Housing Alternatives — NEW in MCS 3.1 (September 2025). Local market context and housing alternatives beyond standard comparable analysis.
- Analysis / Conclusions — Absorption rate and lease-up timeline, market feasibility statement, strengths and weaknesses, key conclusions reconciling any conflicting indicators, recommendations if any.
- Other Requirements — Analyst qualifications, data sources, physical inspection date, limiting conditions, signed certification.
Key Tennessee rules
- Staleness window
- Less than 6 months old at the time of application submission
- Capture-rate threshold
- Combined test: capture rate × penetration rate ≤ 0.02 (e.g., capture < 8% when penetration < 25%; ≤ 6% when penetration is 34%) — not a single flat percentage
- Absorption / occupancy
- No fixed month target — analyst must state the absorption rate in months, identify lease-up pace by unit configuration and set-aside, and state the target stabilized occupancy
Tennessee-specific overlays
- Analyst/firm must be on THDA's Approved Market Study Listing — subcontracted studies are not accepted
- Specify each set-aside as a percentage of AMI (20/30/40/50/60/70/80%)
- Capture × penetration ≤ 0.02; qualitative context (Rapid Growth, Underserved Rural, High Barriers to Entry, Uniquely Competitive) required when outside acceptable ranges
- Shapefile geometry must conform to County Assessor / TN Comptroller records or THDA fails the submission
- PMA attribute table must carry Penetration Rate, Project Capture Rate, Target Occupancy, and Absorption Period in Months
Required companion documents
- Three GIS shapefiles uploaded to THOMAS: PMA polygon, Subject Property polygon, Development Location point (EPSG 6576, NAD_1983_2011 StatePlane Tennessee)
- CSV file listing the census tracts comprising the PMA
- Supporting documentation for the demand analysis
- Analyst must be on THDA's 2026 Approved Market Study Listing
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Start a free Tennessee report →Frequently asked questions
Who reviews LIHTC market studies in Tennessee?
Tennessee Housing Development Agency (THDA) sets the market study requirements and reviews submissions for Tennessee Low-Income Housing Tax Credit applications.
How current must a Tennessee LIHTC market study be?
Less than 6 months old at the time of application submission
Does Tennessee follow NCHMA standards?
Tennessee market studies follow the NCHMA Model Content Standards section structure — NCHMA-based with THDA overlays — must follow the current NCHMA Model Content Standards plus the additional information specified by THDA..
Is there a capture-rate threshold in Tennessee?
Combined test: capture rate × penetration rate ≤ 0.02 (e.g., capture < 8% when penetration < 25%; ≤ 6% when penetration is 34%) — not a single flat percentage
What absorption/occupancy does Tennessee expect?
No fixed month target — analyst must state the absorption rate in months, identify lease-up pace by unit configuration and set-aside, and state the target stabilized occupancy
Other states
This summary is for general reference and reflects Tennessee Housing Development Agency (THDA)'s published guidance as understood by StudyScribe; it is not legal or compliance advice. Always confirm requirements against the current QAP / market study guidelines before submission.