Compliance, Year 15, and Mississippi's 30-year extended-use floor — Mississippi

The compliance/extended-use math: 30 years confirmed, not assumed — and specifically not 55

MHC's Affordability Period language states the number directly: "The development owner must commit to keeping the HTC residential units at the elected restricted rents for a minimum affordability period of thirty (30) years after the units are placed in service," with the LURA running "as covenants running with the land for a minimum of 30 years (or additional years if the development owner has committed to a longer use period)."

The QAP's own Definitions section reaches the same total independently. "Compliance Period" is defined as "the 15 year period over which a project must continue to satisfy the various LIHTC requirements in order to avoid tax credit recaptures," beginning "with the first taxable year of the credit period"; "Extended Use Period" is defined as "the period beginning on the first day after the compliance period and ending on the date specified by the agency or 15 years" — a loosely worded but direct restatement of IRC §42(h)(6)(D)'s statutory floor. Fifteen plus fifteen is thirty, confirmed a second, independent time in the same document.

It holds for bond-financed 4% deals too. Mississippi's Tax-Exempt Bond Developments provisions state separately that "the development must also commit to a thirty (30) year extended low-income use on the portion supported by tax credits" — the identical 30-year figure, stated a third time for a different financing structure.

The one confirmed way past 30 years: Deeper Targeting's 40-year commitment — and its automatic QC waiver

Mississippi's Deeper Targeting scoring item (5 points) awards points to developments that "set aside at least fifteen percent (15%) of the total units for persons whose income does not exceed thirty percent (30%) of the area median gross income" — calculated, per the QAP's own instruction, as "the straight-line calculation of the 50% AMI and not the 30% AMI published in the MTSP limits by HUD," a distinction worth underwriting carefully since the two income ceilings are not the same number. Electing it requires that "a Land Use Restrictive Agreement (LURA) committing to serve tenants at this income level for a period of forty (40) years or longer must be executed and recorded prior to issuance of Forms 8609."

The QAP pairs that longer term with an automatic Qualified Contract waiver, stated as its own note: "Applicants applying for deeper targeting points are automatically waiving their right to a qualified contract by agreeing to extend the affordability period for this income level for forty (40) years." The QAP's phrasing ties the 40-year, QC-waived term to "this income level" — the deeper-targeted set-aside units specifically — and this research could not confirm from the QAP text alone whether MHC's practice is to record one blended term for the whole property or a bifurcated LURA distinguishing the deeper-targeted units from the rest of the development. Confirm against the specific recorded LURA and MHC's current practice rather than assuming either way.

This is a materially different mechanism from states that impose a blanket, QAP-wide Qualified Contract waiver on every award. Mississippi's default rental HTC award keeps a live, functioning QC process — covered next — and only the Deeper Targeting election, or the separate homeownership prohibition below, forecloses it.

Qualified Contract: live by default, not blanket-waived — with two carve-outs

Section 8.12 describes an operating, federally grounded Qualified Contract process, not a waived one. An owner who wants to terminate low-income use after 15 years "can only do so after first making the development available for purchase by parties who want to maintain low-income use at a price determined by a formula set forth in section 42(h) (6) (E) (i) (II)." A preliminary application "can be submitted any time after the end of the 14th year of the compliance period unless the owner agreed to extend the rental restrictions as specified in the development's extended use agreement," after which MHC gets a one-year period to find a qualified buyer at that formula price.

If no buyer materializes, the LURA restriction can end, but current residents don't lose protection immediately: "the low-income use period is extended an additional three (3) years even if the owner is able to avoid the extended use period because there is no buyer willing to purchase the development at the formula price," during which "an owner is prohibited from evicting residents for other than good cause, and from raising their rents beyond the tax credit maximum rents." This framework applies "to developments receiving an allocation of credits after 1989 or automatically receiving credits as a result of tax exempt financing issued after 1989" — effectively Mississippi's entire modern HTC portfolio.

Two carve-outs remove that live process. First, Deeper Targeting: MHC's QAP states directly that "owners of developments that were awarded points for deeper targeting are not eligible to apply for an Eligibility Determination Request" for that income tier's 40-year term. Second, single-family homeownership: "Any HTC application submitted and reviewed by MHC as a single family homeownership development is prohibited from requesting a qualified contract at the end of the initial compliance period. In short, the owner will not be allowed to 'opt-out' of the development at the end of initial compliance period."

Outside those two situations, this research found no Mississippi statute, QAP clause, or compliance-manual excerpt imposing a blanket, QAP-wide Qualified Contract waiver on every rental HTC award the way some other states now require. Treat the QC process as genuinely live for a standard Mississippi rental deal unless it specifically elected Deeper Targeting or is structured as single-family homeownership.

Extended Use Period monitoring: the Declaration, the fee, and what continues

The Extended Use Period is evidenced by its own instrument, separate from the original LURA: "a development's extended use period will be evidenced by an executed and recorded Declaration of Land Use Restrictive Covenant agreement between MHC and the owner," with monitoring continuing "in accordance with the post year fifteen (15) monitoring procedures" set out in the Compliance Monitoring Plan.

That ongoing monitoring isn't free: beginning in the first year of the Extended Use Period, MHC "will assess an annual servicing/monitoring fee of twenty ($20.00) dollars per low-income unit to cover staff costs to monitor tax credit developments during the extended use period," reduced to $10 per unit for RHS-financed developments, due the same date as the Annual Owner Certification (AOC) report.

MHC's inspection authority doesn't lapse at Year 15 either — it holds "the right to perform an on-site inspection of all housing developments for which an allocation of housing tax credit is/was awarded at least through the end of the compliance period, including any extended use period," on top of the routine review cadence (at least once every three years, covering the lesser of 20% of low-income units or the Minimum Unit Sample Size Reference Chart figure).

Replacement reserves must keep funding through both periods per the development's 15-year proforma, and MHC's own language tightens what an owner can do with them once the extended use period starts: "depletion of replacement reserves during the extended use period shall be strictly limited. Reserve fundings may only be withdrawn for necessary capital improvement, essential to sustaining housing quality and compliance with program standards," and "any proposed use of replacement reserves during the extended use period required prior written approval by MHC."

Two things Mississippi's own materials don't address: property tax and prevailing wage

Property tax / PILOT. This research found no MHC-published QAP language, LURA-template provision, or compliance-manual excerpt addressing property-tax treatment, an ad valorem exemption, or a payment-in-lieu-of-taxes arrangement for HTC developments during either the compliance period or the extended use period. Unlike states whose QAPs spell out an optional PILOT arrangement, Mississippi's QAP is silent on the subject; any property-tax relief a Mississippi HTC development obtains would run through the state's general ad valorem tax code or through a specific public-housing-authority ownership structure — entirely outside MHC's own program materials. Confirm directly with the local county tax assessor and the Mississippi Department of Revenue rather than assuming any exemption applies.

Prevailing wage / Davis-Bacon. This research found no prevailing-wage, Davis-Bacon, or state labor-standard requirement anywhere in the 2026 QAP or its addenda, for either the construction period or the extended-use period. Standard 9%/4% Housing Tax Credits do not themselves trigger federal Davis-Bacon labor standards. A development that layers in HOME Program funds — which MHC's own QAP lists as an available, optional gap-financing source of up to $750,000 per development — could independently trigger Davis-Bacon under HUD's own HOME regulations (24 CFR §92.354) once it crosses HOME's own unit-count or contract-size thresholds, but that obligation would flow from the layered federal HOME award itself, not from anything in MHC's Housing Tax Credit QAP.