"IHDA's construction chapter reads like a payment-processing manual, then almost in passing says the Illinois Department of Labor -- not IHDA -- is the one who actually polices prevailing wage. Who is checking what on my job site, and what exactly has to be signed, certified, and recorded before IHDA will release my 8609?"
The DCRC, not the QAP, runs the construction-period paperwork
The 2027-2028 QAP disposes of construction and monitoring in four short subsections at the very end of the document (Section XII), and its own Mandatory Components section (Section VIII.H) resolves the rest by pointing sponsors somewhere else entirely: "All Projects must meet the requirements contained in the Authority's DCRC." The Design, Construction & Regulatory Compliance Requirements -- current version dated August 3, 2026 -- is where the actual construction-period mechanics live: a Coordinator of Construction Compliance assigned to every deal, a mandatory pre-construction meeting with the applicant, architect of record, and general contractor before work starts, and then a running payment-and-inspection cycle for the life of the job.
The monthly cycle is document-heavy by design. Before IHDA's Construction Compliance Coordinator will process a draw, the applicant, architect of record, and contractor must schedule a monthly pay-request meeting, and five days ahead of it the contractor has to submit AIA Document G702 and G703, a Contractor's Sworn Statement in a format IHDA accepts, matching subcontractor G702s/G703s, and any other backup IHDA deems necessary. Stored materials can only be reimbursed up to 60 percent of that line's contract value, must move from storage to installation within 120 days without prior IHDA approval, and require proof of the architect's shop-drawing approval, the vendor invoice and proof of payment, a bill of lading, storage photos, and an insurance rider naming IHDA. Deposits on materials, including furniture, fixtures, and equipment, cap out at 50 percent of total material cost, and missing a scheduled delivery voids the deposit-funding agreement and freezes the next Developer Fee installment in an amount equal to IHDA's share of the deposit.
| Item | Requirement |
|---|---|
| Retainage rate | 10% of trade labor, materials, general conditions, overhead, profit, and all change orders, until 50% completion; reducible to 5% with the Construction Compliance Coordinator's approval |
| What retainage does not apply to | Insurance, bonds, and permits |
| Punch-list holdback at close-out | Punch-list cost multiplied by 150% is held in escrow against the signed AIA G704 |
| Documents required before final 5% retention release | Certificate of Occupancy or final inspection; signed AIA G704; IHDA's Permission to Occupy and Construction Completion Form, both digitally signed; environmental clearance for any demolition; blower-door/duct-leakage test reports where applicable |
| Labor compliance gate at close-out | "All prevailing wage, Davis-Bacon, certified payrolls, and HUD Section 3 compliance requirements are met and satisfied" before final retention releases |
Single-family and scattered-site projects get one accommodation the rest of the program doesn't: IHDA will consider reducing retainage on a site-by-site basis, off each contractor's individual sworn statement for that site, rather than waiting for the whole scattered-site project to reach 50 percent completion.
Two wage regimes that are deliberately mutually exclusive, plus a third that layers on top
The DCRC states the Illinois-specific wage rule in one direct paragraph, and it is worth reading exactly as written: "The Illinois Housing Development Authority (the Authority) administers funds from state sources for housing development activities. The Authority and the recipients of these funds must ensure that all applicable Illinois Prevailing Wage requirements are followed as identified in 820 ILCS 130 -- Prevailing Wage Act. The Illinois Department of Labor, not IHDA, monitors for compliance with Illinois Prevailing Wage. For projects with federal sources that require compliance with Davis Bacon, compliance with Illinois Prevailing Wage is not required." IHDA's own construction-monitoring staff verify draws, inspect the job, and process pay requests, but the substantive question of whether a contractor is actually paying the state's prevailing rate is enforced by a different state agency entirely -- and only one of the two wage regimes ever applies to a given contract, not both.
The trigger for Illinois Prevailing Wage is broader than it might look. The Act's own definition of "public works" -- the term that determines coverage -- is "all fixed works constructed or demolished by any public body, or paid for wholly or in part out of public funds," and the statute goes on to list a long, non-exclusive set of state bond and loan programs that count. An IHDA construction loan or trust-fund advance sitting alongside a project's tax credit equity is exactly the kind of state funding that can pull a private LIHTC deal's construction contract into "public works" coverage under that definition, independent of anything the QAP itself says about wages.
| Regime | Trigger | Who monitors | Interacts with the others how |
|---|---|---|---|
| Illinois Prevailing Wage Act (820 ILCS 130) | Project paid for wholly or in part with state public funds (a broadly defined "public works" test) | Illinois Department of Labor -- not IHDA | Not required once a federal source triggers Davis-Bacon on the same project |
| Davis-Bacon and Related Acts | Federal assistance where the standard is "assisted, not financed" -- generally triggered once 12 or more units in the development are assisted | U.S. Department of Labor wage determinations; IHDA determines when DBRA applies and verifies certified payrolls | Supersedes Illinois Prevailing Wage on the same project; both are still checked at close-out |
| HUD Section 3 | Federal funding sources including HOME, Risk Share, National Housing Trust Fund, and CDBG/NSP-funded activity, generally where assistance exceeds $200,000 | IHDA, per HUD's Section 3 regulations at 24 CFR 75 | A labor-hours and hiring-preference benchmark (25% of hours to Section 3 workers, 5% to Targeted Section 3 workers) layered on top of whichever wage regime applies -- not a wage-rate rule itself |
The close-out checklist requires all three categories -- prevailing wage, Davis-Bacon, and Section 3 -- to be confirmed satisfied before IHDA will approve release of the final 5% retention, regardless of which specific regime actually governed the contract.
Accessibility stacks up to five separate codes, and the QAP is explicit that the strictest one wins
The DCRC does not let a sponsor pick a single accessibility standard. It lists five, states that "one or more" will apply to any Authority-funded development depending on funding source, unit count, and building type, and then says plainly: "When there is a conflict in the design requirements of the various standards and codes, the most stringent requirements will prevail."
| Standard | What triggers it |
|---|---|
| Americans with Disabilities Act (ADA) | Any project with common areas open to the public -- leasing office, community room, public toilets, lobbies, corridors |
| Federal Fair Housing Act (FFHA) / ICC-ANSI A117.1 (2009) | New construction of 4 or more dwelling units, and buildings first occupied after March 13, 1991 |
| 2018 Illinois Accessibility Code (IAC), Section 233 | Housing owned or financed by a governmental unit, consisting of 5 or more dwelling units per site |
| Uniform Federal Accessibility Standards (UFAS) / Section 504 of the 1973 Rehabilitation Act | Projects receiving federal financial assistance -- HOME, National Housing Trust Fund, Risk Share, Section 811, etc. -- not LIHTC alone |
| HUD Title 24 CFR Section 8.23 (alterations of existing housing) | Projects that receive federal financial assistance and involve alterations to existing facilities |
Section 504/UFAS is keyed to federal financial assistance specifically -- a 9% or 4% award standing alone, with no HOME, Trust Fund, Risk Share, or Section 811 layered on it, does not by itself trigger UFAS under this list; the Fair Housing Act and IAC standards, not Section 504, are what typically apply to a stand-alone LIHTC deal.
Universal Design is a separate, additive layer on top of all of this, not an alternative compliance path. The QAP requires every project to build in 15 Universal Design items -- selected from a list on the Architectural Standards, Universal Design, and Amenities Certification (ASUDA) -- into 100 percent of units, and states outright that Universal Design "is not a safe harbor from other required accessibility codes." A sponsor seeking an exception has to submit a detailed narrative explaining why the features cannot be provided, reviewed and approved or denied entirely at IHDA's discretion. Visitability requirements -- a minimum 36-inch accessible route, a zero-step main entrance, and a ground-floor half-bath meeting UFAS or ICC/ANSI standards -- apply on top of both, across single-family, townhome, and multi-story product, whenever not structurally infeasible.
Cost certification is a CPA letterhead certification, not an audit -- and it does not apply under 10 units
IHDA's checklist for 8609 issuance states the cost-certification requirement in one sentence, and it is deliberately narrower than a full audit opinion: "CPA certification of costs prepared by an independent third-party certified public accountant. Must be on CPA letterhead, and must contain the project's total actual cost amount and the project's total eligible basis amount -- the amounts being certified. This requirement is not applicable for projects of 10 or fewer units." Nothing in that language, or in the QAP itself, calls for a GAAS audit opinion, a review, or a compilation under professional accounting standards -- IHDA's own checklist asks only for a signed CPA letter stating two dollar figures, and a sufficiently small project is exempted from even that.
That 10-unit cost-certification carve-out is a distinct, narrower obligation from the recurring annual audited financial statements IHDA requires separately whenever it is a lender on the deal. IHDA's Financial Reporting Guidelines for Mortgagors of Multifamily Housing Projects -- the version located in this research is dated December 2012 -- requires financial statements "examined by a CPA licensed to practice within the State of Illinois," accompanied by the CPA's opinion, conducted to GAAS, Government Auditing Standards (Yellow Book), IHDA's own guidelines, and HUD's Consolidated Audit Guide, with the first such report due for the year following cost certification. That is a real, recurring obligation, but it only attaches through the regulatory agreement on an IHDA-financed deal -- not through the LIHTC award by itself -- and given the document's age, a sponsor should confirm with IHDA's Loan Portfolio Management group whether its specific terms still govern before relying on the 2012 text for a current closing.
| Category | Key items |
|---|---|
| 8609 issuance fee | $1,000 per 8609 for a new-construction building; two 8609s (and two fees) per acquisition/rehabilitation building; no fee for a 1602-program portion of a project; a $1,000 reissuance fee applies if an error in the owner's own submitted data requires a corrected 8609 |
| Cost certification | CPA letterhead certification of total actual cost and total eligible basis -- not required for projects of 10 or fewer units |
| Extended Use Agreement | Executed, original, recorded with the county recorder of deeds -- and its recorded Applicable Fraction must match the lesser of (units/total units) or (affordable floor area/total floor area), recalculated independently at 8609 issuance |
| Placed-in-service verification | Certificates of occupancy for each new-construction building; for rehab, the Owner Certification form's own item 5 serves as the placed-in-service election and confirmation |
| Housing locator registration | Verified registration at ILHousingSearch.org -- the checklist states plainly, "you will not receive your 8609" until this is confirmed |
| Compliance paperwork | Signed Compliance Monitoring Agreement; color photographs of each completed building; net-cent-raise certification from accountant, attorney, or syndicator |
This checklist is a 2021-vintage document still linked from IHDA's Developer Resource Center; its cost-certification and Extended Use Agreement requirements are consistent with the current QAP, but it also still lists 1602-program items from a federal cash-grant program that stopped making new awards years ago. Confirm directly with IHDA's Multifamily Finance staff that no line items have quietly changed since this document was last dated.
What the QAP leaves genuinely unresolved on construction-period inspections
The QAP's own Required Monitoring section scopes its construction-period field inspections narrowly: "In addition to visiting proposed Project sites during the Application review period, Projects receiving an Allocation of 9% Tax Credits will be subject to field inspections by Authority staff during the construction period." Read on its own, that sentence names only 9 percent Tax Credit Projects. The DCRC's own Construction Activities chapter, by contrast, describes the Coordinator of Construction Compliance's monitoring role in general terms, without carving 4 percent or bond-financed deals out of the draw-review, retainage, or close-out process -- and the DCRC's cover material states it applies to 9% LIHTC, 4% LIHTC, and Permanent Supportive Housing projects alike. This research could not find language in either document that squarely reconciles the QAP's 9%-only field-inspection sentence with the DCRC's project-wide construction-compliance regime; a 4 percent sponsor should not assume a lighter on-site inspection cadence than a 9 percent deal without confirming it directly with IHDA's Construction Compliance staff.
Where this goes wrong
- Assuming Illinois Prevailing Wage and Davis-Bacon both apply, stacked, on a HOME-layered deal. The DCRC states the two are mutually exclusive on the same project: "For projects with federal sources that require compliance with Davis Bacon, compliance with Illinois Prevailing Wage is not required."
- Assuming that because the Illinois Department of Labor -- not IHDA -- monitors state Prevailing Wage compliance, IHDA has no role in it. IHDA's own construction close-out checklist still requires confirmation that "all prevailing wage, Davis-Bacon, certified payrolls, and HUD Section 3 compliance requirements are met and satisfied" before the final 5% retention is released.
- Treating the 8609 cost certification as a full audit opinion. IHDA's checklist calls only for a CPA letterhead "certification of costs" stating total actual cost and total eligible basis -- and the requirement does not apply at all to a project of 10 or fewer units.
- Assuming 4% Tax Credit or bond-financed deals get the same QAP-guaranteed field-inspection cadence as 9% deals. Section XII.D.i's field-inspection language names only "Projects receiving an Allocation of 9% Tax Credits"; the QAP text does not restate an equivalent guarantee for 4% deals, even though the DCRC's own construction-monitoring chapter otherwise applies project-wide.
- Missing the retainage step-down mechanic and its escrow multiplier. Retainage runs at 10% until 50% completion, reducible to 5% only with the Construction Compliance Coordinator's approval, and any punch-list items at close-out are escrowed at 150% of their cost, not 100%.
- Picking a single accessibility code and assuming it satisfies the whole project. The DCRC stacks up to five different standards -- ADA, FFHA/ICC-ANSI, the 2018 Illinois Accessibility Code, UFAS/Section 504, and HUD's 24 CFR 8.23 -- depending on funding source, unit count, and building type, with the most stringent applicable requirement controlling on any conflict.
- Treating Universal Design as an alternate accessibility compliance path rather than an addition on top of code. The QAP states outright that Universal Design "is not a safe harbor from other required accessibility codes."
- Assuming Section 504/UFAS applies to every LIHTC deal. The DCRC keys UFAS specifically to projects that receive federal financial assistance -- HOME, National Housing Trust Fund, Risk Share, Section 811 -- not to a stand-alone 9% or 4% award.
- Forgetting to register the project at ILHousingSearch.org before requesting Form 8609. The checklist states plainly that IHDA will not issue the 8609 until that registration is verified.
- Treating IHDA's 2021-dated 8609 checklist and 2012-dated Financial Reporting Guidelines as fully current without confirming with IHDA staff. Both remain linked as the operative documents, but their age (and, in the checklist's case, still-present references to the long-closed federal Section 1602 program) means a sponsor should verify nothing has quietly changed before relying on either for a current closing.
- HUD
- LIHTC
- State QAPs
- IRS § 42
- Housing Finance Agencies