Specific criteria must be met in order for a multifamily project to qualify for the MFTE. Eligibility depends upon the type of project being proposed (new construction, rehabilitation to existing units) and whether or not the length of the exemption desired is for 8 years or 12 years.

New Construction Projects (8 year exemption)

• Must be within one of the targeted areas specified in the section below
• Must provide for a minimum of 50% of the space for permanent residential occupancy
• Must include at least 10 units of multifamily housing within a residential structure or as part of an urban development
• Must be completed within 3 years from the date of the approval of the application
• Must be designed to comply with the city's Comprehensive Plan, building, housing, and zoning codes, and any other applicable regulations, including any other standards and guidelines adopted by the City Council for the residential targeted area

Rehabilitation to Existing Units (8 year exemption)

• Must be within one of the targeted areas specified in the section below
• Must provide for a minimum of 50% of the space for permanent residential occupancy
• Must include at least 10 units of multifamily housing within a residential structure or as part of an urban development
• Must be completed within 3 years from the date of the approval of the application
• Must be designed to comply with the city's Comprehensive Plan, building, housing, and zoning codes, and any other applicable regulations, including any other standards and guidelines adopted by the City Council for the residential targeted area
• Must, in the case of existing multifamily housing that is occupied or which has not been vacant for 12 months or more, provide for a minimum of 4 additional multifamily units for a total project of at least 14 units. An affidavit stating the occupancy record of the property for a period of 12 months prior to filing the application will be required.
• Must not displace any residential tenants of structures that are proposed for redevelopment. If the property proposed to be rehabilitated is not vacant, an applicant shall provide each existing tenant housing of comparable size, quality, and price and a reasonable opportunity to relocate
• Must be proposed to rehabilitate existing multifamily housing that fails to comply with 1 or more standards of the applicable State or city building codes. A report prepared by a registered architect affirming noncompliance with the building codes will be required with submission of the application

Either New Construction or Rehabilitation Projects that include Affordable Housing (12 year exemption)
In addition to the aforementioned requirements, when affordable housing is proposed, the following additional requirements apply:

• A minimum of 20% of the multifamily units must be affordable to low- and moderate-income households. A low-income household is defined as a household earning 80% of the Area Median Income or less while a moderate-income household is defined as earning 115% of the Area Median Income or less.
  • The median income of Kitsap County, broken down by household size, is released by HUD each year. The most current numbers can be found online at the HUD website.
• Tenants to occupy the affordable units must meet income eligibility requirements, which will be reviewed each year that the MFTE is in effect
  • Affordable units must be rented to low- and moderate-income households in which their monthly housing costs, including utilities other than telephone / cable / internet, do not exceed 30% of that household's monthly gross income
• If the project is intended exclusively for owner occupancy, the minimum requirement can be satisfied solely through housing affordable to moderate-income households