Construction monitoring, cost certification, and Connecticut's path to Form 8609 — Connecticut

Whose observer visits the site depends on who is financing the job

CHFA's current Construction Guidelines draw a sharp, deal-specific line on who actually watches the job get built. “For all developments with CHFA construction funding, or other funds administered by CHFA, construction observation is required by an assigned CHFA Field Observer,” who performs bi-weekly site visits and provides field reports and progress photos to CHFA. For a development financed only through 9% or 4% tax credit equity — with no CHFA construction loan behind it — the standard is materially weaker: “CHFA staff may periodically visit the development to conduct on-site observations of the construction process,” with observations occurring “at any time within the duration of the construction process” at CHFA's discretion, not on a guaranteed cadence. A screening or scheduling tool that assumes every Connecticut LIHTC deal gets the same bi-weekly CHFA presence would be wrong for the (common) case of a tax-credit-only capital stack.

The architect of record carries the heavier day-to-day burden regardless of who is lending. CHFA's Guidelines direct that “the Architect shall conduct field inspections and lead job meetings weekly during construction,” with a CHFA Field Observer additionally attending “as CHFA's representative on a bi-weekly basis” when one is assigned. CHFA recommends the architect's construction-administration fee run 30–35% of the total architectural fee specifically so weekly site visits and job meetings can actually happen, and requires the on-site administering architect to be Connecticut-licensed. As-built drawings verified by the architect must be submitted before CHFA will execute the IRS Form 8609 and/or release final retainage.

Cost certification is a full CPA audit, not a certification letter — and two different accountants have to sign it

Every Connecticut LIHTC development of more than ten units, with or without CHFA financing, is required to complete a General Contractor's Cost Certification and a separate Mortgagor's-LIHTC Cost Certification. Both must be “prepared by an independent, third-party CPA” in accordance with Generally Accepted Accounting Standards, Generally Accepted Government Audit Standards, and AICPA-acceptable audit standards, and each must be “accompanied by an Independent Auditor's Report, including the unqualified opinion of the CPA” — a full audit-level opinion, not a compilation or a agreed-upon-procedures letter. CHFA's guideline is explicit that the same CPA cannot sign both certifications for one project (“The General Contractor's Cost Certification shall not be prepared by the same CPA preparing the Mortgagor's-LIHTC Cost Certification”), though the same accounting firm may prepare both as long as different accountants within it do the work. If more than one general contractor worked on a development, CHFA requires a separate GC certification from each one.

The certification package runs on its own clock, distinct from the construction schedule itself. Within 120 days of Substantial Completion, the mortgagor and general contractor must submit the cost certifications to CHFA, covering eligible costs incurred within 120 days after that same Substantial Completion date. CHFA then requires a minimum of 60 days from the date it receives the final Mortgagor's-LIHTC Cost Certification before it will issue the Form(s) 8609 — a floor, not a promise; CHFA “reserves the right to return any request(s) for the issuance of Form(s) 8609 if the mortgagor fails to communicate with CHFA regarding delays and concerns.” A supplemental cost certification is due within 60 days of final closing if any payables remain outstanding on the original submission. Records supporting the certifications must be kept for three years following Substantial Completion and made available to CHFA on request.

The certified numbers are not a formality — they resize the deal. “Consistent with Section 42(m)(2) of the Internal Revenue Code and industry best practices, CHFA limits the award of LIHTC and other State controlled resources to the funding gap necessary to make a transaction viable,” so any excessive cost, regardless of what it's actually paid from, can widen the gap CHFA is filling. Per CHFA's LIHTC Program Guideline, the tax credit amount originally reserved will be reduced if the audited cost certification shows a smaller financing gap than originally projected; for 4% deals specifically, the final credit amount can instead come in higher than the original estimate, subject to CHFA's final underwriting review. All outstanding fees must be paid before an 8609 is issued.

The governing document for all of this — CHFA's Cost Certification Preparation Guideline — is dated January 2018. CHFA's current LIHTC Program Guideline (effective 11/1/2025) still points developers to “the CHFA Cost Certification Preparation Guideline on the CHFA website” without citing a newer edition, and no more recent version is listed on CHFA's own Design and Construction Criteria document page as of this research. Treat the 2018 edition as the operative one unless CHFA's Multifamily Underwriting group confirms a newer version directly.

Design and accessibility: Section 504, UFAS/2010 ADA Standards, and the Fair Housing Act are CHFA design requirements, not afterthoughts

CHFA's current Multifamily Design & Construction Standards list, as a regulation that may apply, “Section 504 of the Rehabilitation Act of 1973 (Section 504), the Department of Justice 2010 ADA Standards for Accessible Design and the Uniform Federal Accessibility Standards (UFAS) for all federally-assisted newly constructed developments with 5 or more units”, setting a floor of 5% of units (or at least one unit, whichever is greater) accessible for persons with mobility disabilities, plus an additional 2% (or at least one unit) accessible for persons with hearing or visual disabilities. The same Standards separately list “Fair Housing and Equal Opportunity (FHEO) including the barrier-free requirements of the Fair Housing Act (FHAct), Section 504, the Americans with Disabilities Act (ADA), the Architectural Barriers Act (ABA), and the Housing of Older Persons Act (HOPA)” as applicable regulations, and require “Type B” adaptable dwelling-unit compliance with ICC/ANSI A117.1 for units not otherwise built to the “Type A” accessible standard.

One nuance is worth flagging rather than glossing over: Section 504 by its own terms reaches programs and activities that receive federal financial assistance, and whether a Connecticut development financed solely with CHFA tax-exempt bonds and 9%/4% federal tax credits — with no HOME, CDBG, Section 8, or other direct federal grant layered in — is itself “federally-assisted” for Section 504 purposes is a fact-specific legal question this research could not resolve definitively from CHFA's published Standards alone. What is unambiguous is that CHFA applies the same 5%/2% accessible-unit percentages as its own Standards for new multifamily construction regardless of that underlying nexus question, so the design requirement lands the same way in practice — but a developer relying on the technical federal-assistance trigger for any other purpose should confirm the analysis with CHFA and counsel on a deal-specific basis rather than assume the Standards resolve it.

Prevailing wage: CHFA puts the burden on the applicant, and two different statutes — not one — can pull it in

CHFA's Construction Guidelines are direct about where responsibility sits: “State Prevailing Wages and/or Davis-Bacon Wages may be required. It is the responsibility of the applicant to determine if these requirements apply to their project. Please contact the necessary State and Federal authorities to determine the applicability of prevailing wages and/or Davis-Bacon wage rates prior to submitting an application.” The applicant must include the rationale for including or excluding either wage standard in its hard-cost budget, and, where either does apply, a labor-category-by-labor-category analysis supported by the actual State of Connecticut prevailing wage sheets or Davis-Bacon wage determinations. CHFA's LIHTC Program Guideline similarly lists “Applicability of Federal Davis Bacon or State prevailing wage rates” as a topic to be worked out at the pre-application conference — CHFA facilitates the conversation but does not itself declare the answer.

The reason CHFA leaves this to the applicant is that Connecticut's state prevailing-wage statute, Conn. Gen. Stat. § 31-53, is not a blanket rule for state-financed housing — it is a public-works statute keyed to direct ownership. By its own text it applies to “the construction, remodeling, refinishing, refurbishing, rehabilitation, alteration or repair of any public works project by the state or any of its agents, or by any political subdivision of the state or any of its agents”, and does not apply at all where the combined cost of new construction is under $1,000,000, or under $100,000 for remodeling/repair work (thresholds raised from $400,000 by 2017 legislation — an older $400,000 figure still circulates in some secondary sources and should not be relied on). A privately-owned limited partnership that merely receives a CHFA bond allocation or LIHTC award is not, on that basis alone, “the state or any of its agents” undertaking the construction.

A second, narrower statute, Conn. Gen. Stat. § 31-53c, extends the identical prevailing-wage obligation to privately-owned construction projects where the Department of Economic and Community Development (DECD) — defined in that section as providing “any and all forms of loans, cash payments, extensions of credit, guarantees, equity investments, tax abatements or any other form of financing totaling one million dollars or more” — is the funding source, as a condition DECD itself must write into the assistance contract. Two things about this section matter for a Connecticut LIHTC deal specifically: it is triggered by the dollar amount of DECD assistance, not by CHFA or LIHTC involvement as such, and its text still names the Department of Economic and Community Development — not the Department of Housing (DOH), which is the agency that in practice administers most of Connecticut's soft-money housing subsidy today. Whether DOH-sourced gap financing triggers § 31-53c the same way DECD financing does is not something this research could confirm from the statute's plain text; the housing-specific chapter of the general statutes (Chapter 133) was amended over the years to substitute “Commissioner of Housing” for “Commissioner of Economic and Community Development,” but § 31-53c sits in a different chapter (557) and its own text and amendment history still say DECD.

Whichever statute (if either) applies, enforcement is not CHFA's job. Both § 31-53 and § 31-53c are administered by the Connecticut Department of Labor's Labor Commissioner: the Commissioner sets the prevailing wage rate for each town and trade (adopting the applicable Davis-Bacon rate where no local collective bargaining agreement exists), collects monthly certified payrolls from contractors, and can fine a noncomplying contractor or subcontractor up to $5,000 per offense and refer repeat or large-dollar violators for debarment from future public contracts. A federally-funded layer (HOME, CDBG, or other HUD money) instead triggers the federal Davis-Bacon Act, enforced by the U.S. Department of Labor. Nothing in CHFA's QAP, LIHTC Guideline, or Construction Guidelines states that CHFA's own bi-weekly or periodic Field Observer visits include verifying prevailing-wage payroll compliance — that oversight function, where it applies at all, runs through the Connecticut or U.S. Department of Labor, not through CHFA's construction-monitoring program.