Compliance, Year 15, and CNMI's scored extended-use term — not a single fixed number — Northern Mariana Islands

The federal floor every award gets: 15 years, then at least 15 more

NMHC's QAP sets the initial Term of Compliance in one sentence: "Projects must comply with the eligibility requirements for the initial fifteen (15) year period ('compliance period')" (§V.2.D). The QAP does not restate the federal rule that the compliance period runs from the first taxable year of the credit period (IRC §42(i)(1)); that's federal law operating in the background, not language NMHC's own QAP spells out. What NMHC's QAP does spell out, in its Qualified Contracts section, is the extended-use floor on top of that 15 years: "The Omnibus Reconciliation Act of 1989 required that all properties receiving an allocation of Housing Credits after January 1, 1990 are subject to an additional use period that extended the minimum affordability period of credit properties from 15 to 30 years" (§VI). That is a restatement of the federal statutory floor under IRC §42(h)(6)(D) — not a CNMI-specific enhancement of it.

The instrument that records whatever term ultimately applies to a given project is called, in the QAP's own language, the "Declaration of Restrictive Covenants for Low Income Housing Credit" (also referred to elsewhere in the QAP simply as the "Restrictive Covenant Document" or "Restrictive Covenant document") — the CNMI equivalent of a mainland LURA. That is the document to check for any specific project's actual committed term; the QAP's own scoring structure, described next, means that term is not the same for every award.

NMHC's scored menu: up to 45-plus years, and the Qualified Contract trade-off

Selection Criterion 1 in the QAP's point system awards 0 to 10 points for "Project will provide low-income units for a longer period than is required under Section 42 IRC," described as an election to commit to "an additional use period beyond the 15-year LIHTC compliance period (collectively the Extended Use Period)." The QAP is explicit about the trade-off: "By making this election, the applicant elects to waive its right to exercise a request for a qualified contract pursuant to Section 42(h)(6)(E)(i)(II)."

Because the QAP scores this as an open-ended election rather than mandating a single figure, there is no one "CNMI number" to report for the extended-use period the way a flat state-mandated floor (for example, a state that requires every award to carry a fixed 45- or 60-year term) would produce. A project's real total commitment is whatever its applicant elected on Criterion 1 and whatever ended up recorded in its Restrictive Covenant Document.

Qualified Contract: this research's reading is that it stays live for owners who don't take the scoring points

NMHC's Qualified Contracts section (§VI) opens by restating the federal QC mechanism generally, then narrows eligibility: "Owners that elected to waive their option to request a Qualified Contract are not eligible. After the last day of the fourteenth year of the compliance period of the last building placed in service or the last day of the last year of a multiple year allocation, an eligible owner of the project utilizing federal LIHTCs may request a QC." Read together with Criterion 1's own text — that electing any additional-use scoring tier is what waives the QC right — the two sections imply that an owner who elects "No additional use period" (0 points on Criterion 1) has not waived that right and remains QC-eligible. The QAP never states that conclusion in a single sentence; it is this research's own reading of how the two sections cross-reference each other, not a direct quotation, and it should be confirmed with NMHC's Corporate Director's office for any specific deal before an owner relies on it.

For an eligible owner, the QC process itself runs close to the federal template: a written request to the Corporate Director, followed by an application including a QC Report from an independent CPA calculating the price "in accordance with the Internal Revenue Code §42(h)(6)(F)," a full due-diligence document set (audited financials, loan documents, partnership agreement, a current title report, a physical needs assessment, a third-party appraisal, and a Phase I environmental — each no more than 60 days old at application), and a $150-per-unit QC processing fee. "The 1 year period does not start until the Owner submits a complete QC Application with all required documents to the satisfaction of NMHC" — matching the general federal one-year period for an agency to present a qualified contract under IRC §42(h)(6). An owner may only request a QC once during the entire additional-use period of a project, and withdrawing an application counts as that one use.

One further NMHC-specific policy is worth flagging directly: "In keeping with the purpose of IRC §42, NMHC will resolve any case of doubt or interpretation in determining the QC price, both with regard to the overall process and particular projects, in favor of the lower QC price" (§VI.3.J). That is a real, stated tilt toward the buyer's side of any pricing ambiguity, not a neutral tie-breaking rule — an owner planning around a QC exit should not assume any disputed pricing question will be read in their favor.

What changes at Year 15 under NMHC's Additional Use (AU) Compliance Policy

NMHC's QAP describes its post-Year-15 compliance regime concretely as the "AU Compliance Policy," effective "on the first day after the expiration of the initial 15 year compliance period for the last building placed in service in the project" and generally beginning "on January 1 of the year after" that expiration (§V.12.A). Unless the QAP notes otherwise, initial-compliance-period procedures continue to apply during the AU period — but several specific things do change.

The AU period also introduces a defined compliance status with a real downstream consequence: "Any owner and constituent entities involved in management and ownership of a project with an unresolved finding of non-compliance beyond the initial correction period may be deemed to be Not in Good Standing by NMHC. Owners must clear all outstanding non-compliance issues to be deemed in Good Standing with NMHC" (§V.12.J). That label is not just descriptive — the Qualified Contract eligibility criteria in §VI.1.D require that "the project and owners are in compliance and all programmatic requirements and are in good standing with NMHC," so an owner Not in Good Standing during the AU period can be blocked from a QC exit even if otherwise eligible.

What NMHC's materials don't address: property tax/PILOT, and labor law during and after construction

This research found no mention anywhere in NMHC's QAP of property-tax treatment or a payment-in-lieu-of-taxes (PILOT) arrangement for LIHTC properties during either the Compliance Period or the Additional Use Period. Confirm CNMI real-property-tax treatment for an extended-use LIHTC property directly with CNMI's own tax authorities (the Department of Finance / Division of Revenue and Taxation) — it is outside what NMHC's own program materials cover.

On labor law: as a matter of general federal law, Davis-Bacon prevailing-wage requirements are not triggered by a Section 42 Low-Income Housing Tax Credit allocation on its own — Davis-Bacon coverage typically attaches only when a project separately carries other federally assisted financing that independently requires it (for example, HUD HOME funds, project-based Section 8 assistance, USDA Rural Housing Service 515 financing, or certain CDBG-funded work). NMHC's QAP does not mention Davis-Bacon anywhere, and this research found no CNMI-specific prevailing-wage statute referenced in NMHC's materials either. Confirm labor-law exposure for a specific project's actual funding stack directly with CNMI's Department of Labor and with counsel, rather than assuming either that Davis-Bacon automatically applies or that it doesn't.