LIHTC compliance monitoring

Section 42 of the Internal Revenue Code (IRC) requires IHDA to monitor all LIHTC developments for compliance with the requirements of the IRC throughout the project’s compliance period. IHDA is required to have procedures for monitoring a project’s compliance with the provisions of the IRC and notifying the Internal Revenue Service (IRS) of any noncompliance of which it becomes aware, whether or not the compliance deficiency is corrected.

Compliance information for 9% LIHTC projects

Carryover Allocation

A carryover allocation is required for all projects that will not be placed in service during the year in which a reservation letter is issued. Projects are expected to be placed in service no later than the end of the second year following the year when the reservation letter is issued. 

  • Carryover Allocation Documentation [Please check back]

10 Percent Test

Each project issued a carryover allocation letter must provide evidence to the satisfaction of IHDA that the project will meet the 10 percent test.  Documentation of project costs incurred to meet the 10 percent test must be certified by an independent, third-party, certified public accountant or attorney, must contain all information required by IHDA, and must meet all applicable Section 42 conditions and requirements. 

  • 10 Percent Test Documentation Sample [Please check back]

Issuance of 8609s

The Authority will not issue 8609(s) until the final draw request has been submitted and approved by the Authority.  The Authority also will not issue 8609(s) unless all fees and payments due to the Authority in connection with any Authority program have been paid.  All documentation must be submitted in an unbound package with original signatures in blue ink, as appropriate.  

  • 8609 Issuance Checklist Form [Please check back]
  • 8609 Owner Certification Form [Please check back]
  • Final Financing Form [Please check back]

Annual Compliance Monitoring Requirements

Tax credit projects are typically subject to an annual review of their management activities. Owners will be notified annually as to the extent of their reporting requirements, which will include, at minimum, furnishing of one or more of the documents described below. Projects, which also received mortgage financing from IHDA, may be subject to additional or different reporting requirements.

  • Compliance Documentation [Please check back]
  • Placeholder for Form [Please check back]
  • Placeholder for Form [Please check back]

Qualified Contract Process

The Qualified Contract option was designed to permit owners of LIHTC properties an option to exit the program after the initial 15-year compliance period without continued affordability restrictions under the extended use period. IHDA has documented its policies and procedures regarding qualified contract requests in the Qualified Contract Process and Guidelines packet.