Construction, the 10% test, and getting to 8609 — New Hampshire

The clocks you are now running against

New Hampshire Housing Finance Authority — doing business as New Hampshire Housing, and referred to throughout its own rules as "NH Housing" — is the sole state housing credit agency: it allocates both the 9% and 4% credit, and it is also the tax-exempt bond issuer for most deals. There is no CTCAC/CDLAC-style split into two agencies with two rulebooks. That does not make this phase less deadline-driven. This phase starts the moment the Board of Directors votes to approve your reservation — for the current 9% round that vote is scheduled for December 17, 2026, roughly three months after the September 25, 2026 final-application deadline — and from there the calendar runs on its own.

Notice what is missing from that last row. Unlike the Progress Phase (120 days) and Carryover (October 1) deadlines, the QAP does not fix a submission deadline for the Appendix C final allocation package the way a rule tied to "one year from the final certificate of occupancy" would. The only commitment that runs in the other direction is NH Housing's own — 8609s go out within 30 days of a complete submission. That makes the 30-day promise a genuine asset, but it also means nothing in the QAP itself forces the sponsor to submit promptly; the pressure to move comes from the federal side, particularly the first-year certification deadline discussed below.

The 10% test — a federal number, New Hampshire's own paperwork

The statute is explicit: the taxpayer's basis in the project as of the date one year after the allocation was made must exceed 10 percent of reasonably expected basis as of the close of the second calendar year following the allocation year (IRC §42(h)(1)(E)(ii)). NH Housing's QAP applies the same 12-month window and adds one condition of its own that goes beyond the federal minimum: the cost certification "must be completed by a professional Certified Public Accountant (CPA) in accordance with generally accepted auditing standards and IRC §42" (QAP Appendix B). The federal regulation offers a second, lighter-weight path — taxpayer self-certification under penalty of perjury (26 CFR §1.42-6(c)(2)) — but New Hampshire's own carryover paperwork does not carry that option forward; a CPA-prepared certification is what the Carryover Allocation Agreement calls for.

There is also an unresolved federal wrinkle that applies in New Hampshire exactly as it applies everywhere else. 26 CFR §1.42-6(a)(2)(i)–(ii) still contains pre-2008 language tying the test deadline to the close of the calendar year (for allocations made before July 1) or six months (for allocations made after June 30) — language that predates the HERA amendment that moved the statute to a uniform 12 months. No IRS guidance formally reconciling the regulation's text with the statute has been identified. The statute controls, and NH Housing's own 12-month rule matches it, but the older regulatory language has not been struck.

Fees, reserves, and the developer-fee holdback — cash timing into the closing table

New Hampshire prices this phase specifically, and most of the price is due at the same moment: with the final allocation package, before the 8609 is issued.

One number NH Housing does not fix for LIHTC deals is the developer-fee payment schedule. For projects with LIHTCs, NH Housing follows whatever the partnership or operating agreement specifies with the equity investor — but it reserves the right to reject a schedule that front-loads too much fee before completion, requiring "sufficient performance-based incentives" tied to timely construction completion, final closing, and rent-up (Underwriting Standards §5.02.B). That is a negotiated investor term, not a published percentage, and it is worth pinning down early rather than assuming a market-standard holdback will automatically satisfy NH Housing's discretion.

For a project that runs into real cost or pricing trouble mid-construction, New Hampshire keeps a small standing pool for exactly that: $90,000 per year is set aside for supplemental LIHTC requests from projects that already hold a reservation, capped at $30,000 per project (though NH Housing may exceed that cap at its discretion), available where a project shows unforeseen cost increases, an unanticipated drop in equity pricing, or a reduction in needed NH Housing capital subsidy (QAP HFA 109.03.C). It is a narrow tool — a few tens of thousands of dollars, not a rescue for a materially broken deal — but it is a real, budgeted mechanism most sponsors don't know to ask for until the gap has already appeared.

The bond track: NH Housing's own conduit, and the OBBBA's new 25% test

On the 4% side, NH Housing wears both hats — allocating agency and bond issuer — through two separate rule sets: HFA 114 (the Multi-Family Bond Financing Program, where the Authority makes the mortgage loan and generally provides credit enhancement) and HFA 116 (Conduit Bond Rules, for third-party-lender conduit deals). There is no separate committee comparable to a state's bond-allocation authority standing between the QAP and the bonds. And as of its most recent guidance, NH Housing states plainly that it is "not currently constrained by bond volume cap" — a materially different starting position than a state where private activity bond authority is itself scarce and competitively awarded.

The financing math changed federally, and recently. H.R. 1 — enacted July 4, 2025 — lowered the tax-exempt bond financing threshold for 4% LIHTC eligibility from 50% of aggregate basis (the old "50% test") to 25%, for any deal where both the bonds are issued after December 31, 2025 and the property is placed in service after December 31, 2025. NH Housing did not simply drop its own target to the new floor. Its policy, effective April 17, 2026, allocates bond volume cap to 4% transactions equal to the greater of 30% of aggregate eligible basis or the amount necessary to support the project's maximum construction/permanent debt plus reserves and issuance costs — deliberately keeping a cushion above the new 25% statutory minimum.

At final cost certification, NH Housing still calls this the "financed-by test (formerly referred to as the '50% test')" in its own paperwork — the terminology hasn't fully caught up to the 25% statutory change even where the substance has — and requires a separate certification that the project meets the bond "95-5 test" (QAP Appendix C.2).

Getting to the 8609

Certificates of occupancy alone get a New Hampshire sponsor nothing. NH Housing issues the 8609 only after a complete Appendix C package — deed and site control documentation, a recorded Land Use Restriction Agreement (LURA), the final cost certification (with the tax-exempt bond financed-by and 95-5 certifications where applicable), Developer's Certifications of Development Costs and Equity Proceeds, an As-Built Architect's Certification, construction close-out approval, and payment of the final allocation fee and tax credit monitoring fee. NH Housing completes and signs Part I of Form 8609; the owner completes and signs Part II and returns a copy.

Then the federal step that has nothing to do with New Hampshire's own paperwork. The owner must certify first-year information to the IRS following the close of the first taxable year of the credit period, and no credit is allowable for any taxable year ending before that certification is made (IRC §42(l)(1)). That deadline runs on its own schedule regardless of how promptly NH Housing turns around its own 8609 package.

New Hampshire's scoring criteria carry a real memory of what goes wrong at this stage. Under the "Developer Experience" scoring item, NH Housing may deduct 1 to 20 points — in its sole discretion — from a sponsor's next application for outstanding arrears of more than 30 days on any NH Housing-financed or tax-credit project, non-compliance on another NH Housing or state-agency-financed project, or credits "awarded in the past that were subsequently returned or otherwise unused" absent good cause (QAP HFA 109.07.A, Item 14.a). A separate, automatic 5-point deduction applies to any GP who has pursued a qualified contract in New Hampshire within the last five years, unless the sponsor can show the pursuit was investor-driven rather than the GP's own (Item 14.c). Both are direct evidence that this exact failure mode — an allocation reserved and then not delivered — is something NH Housing has built its scoring rules to anticipate, not a hypothetical.

For nonprofit-sponsored deals, the IRC §42(i)(7) right of first refusal must run for a term of at least 24 months from the end of the compliance period, priced at the statutory minimum under §42(i)(7)(B), and every investor or syndicator the Sponsor selects must be free of any history of "aggregator" activity that undermines a nonprofit ROFR (QAP HFA 109.06.J).

Lease-up and long-term compliance

Qualified basis and applicable fraction lock in at the end of the first credit year (26 CFR §1.42-5(b)(1)(viii)). A household certified into a unit incorrectly in year one is a mistake New Hampshire's own paperwork cannot undo — it is a federal reduction that runs for the length of the compliance period, no matter how the state processes anything else.

NH Housing's monitoring responsibilities begin "at the time the first building is placed in service" (QAP HFA 109.10.B) — which in a multi-building phased project can start well before the final building, and well before the 8609, is in hand.

Record retention runs long. Each year's records must be kept 6 years past the due date (with extensions) of that year's federal return; the first-year credit-period file must be kept 6 years beyond the due date for the last year of the compliance period — roughly 21 years of custody in total (26 CFR §1.42-5(b)(2); QAP Appendix I.A, which restates the federal rule without adding a New Hampshire-specific extension). Annual tenant-data uploads and certifications to NH Housing are due March 1 of each year throughout the Extended Use Period (QAP Appendix I.B).

Missing a date, and New Hampshire's narrower relief valve

New Hampshire's equivalent of a deadline-relief mechanism is the LIHTC Exchange (QAP HFA 109.08.E), and it is deliberately narrower and more discretionary than an enumerated list. NH Housing "will permit" an exchange only when all of the following hold: the appropriate amount of LIHTCs remains available; the sponsor shows an inability to meet the placed-in-service, 10% test, or other funding deadline; that inability stems from litigation, municipal approval delays, or other genuinely unforeseeable circumstances beyond the sponsor's control; and the project still meets the threshold and eligibility criteria that were in effect when the credits were originally awarded. Where those conditions are met, NH Housing can reissue a reservation letter for the same or a lesser amount without a fresh Board vote — but ordinary cost overruns, financing delays the sponsor could have managed, or a simple failure to keep pace are outside that list, and the QAP does not describe any other path back.

Unused or returned credits move on a fixed clock of their own. Credit returned 60 or more days before the next preliminary application deadline may be offered — at NH Housing's sole discretion — to projects that applied in the immediately preceding funding round; credit returned within 60 days of the next deadline rolls into the upcoming round instead (QAP HFA 109.08.A).

One structural point worth naming: New Hampshire's cost-reasonableness ceilings are largely front-loaded at application, not continuously re-underwritten the way a readiness-stage cost check would be. The TDC Weighted Average — (2 × TDC/unit + TDC/bedroom) ÷ 3 — may not exceed $397,000 (or $425,000 for enumerated high-cost categories such as adaptive reuse, Historic Tax Credit use, brownfield sites, or projects in Grafton, Carroll, or Coos County), the unweighted per-unit TDC cap is $464,000, and the capital-subsidy-plus-equity investment limit is $315,000 per unit — but that investment limit is evaluated using pricing as of application, and "subsequent changes in equity pricing will not trigger a re-evaluation" of it (QAP HFA 109.04.C). That cuts the other way from a system that re-prices a deal against current costs at every later stage: a New Hampshire sponsor who priced conservatively at application is not automatically punished for a later market shift on this particular test, though the general Cost Reasonableness threshold criterion still requires each updated financing application — submitted at both Progress Phase and Carryover — to comply with NH Housing's Underwriting Standards (QAP HFA 109.06.G).

What the sources do not settle

A few things are genuinely open, and worth treating as inputs rather than settled facts.

No New Hampshire-specific published distribution of construction or lease-up durations was found — not even the kind of unverified practitioner range that circulates in larger markets. With a 9% program this size (11 project applications scored in the most recent posted round, of which only 6 actually received a reservation), the sample of comparable deals any one sponsor can draw on for scheduling purposes is thin; a schedule for this phase should be built from the sponsor's own completed New Hampshire deals, not an assumed industry average.

The QAP fixes a submission deadline for the Progress Phase (120 days) and the Carryover package (October 1), but not for the Appendix C final allocation package itself — the placed-in-service filing that leads to the 8609. NH Housing's only stated commitment running the other direction is the 30-day issuance turnaround once a complete package is in hand. Whether that gap is a deliberate policy choice or simply unwritten was not something these sources resolved.

The federal conflict between 26 CFR §1.42-6(a)(2)'s pre-HERA test-timing language and the statute's uniform 12-month rule has not, as far as this research could determine, been formally reconciled by the IRS anywhere in the country — New Hampshire included. NH Housing applies the 12-month statutory rule; the older regulatory text remains on the books unamended.

No New Hampshire-specific NSPIRE or HOTMA implementation memo — of the kind some larger agencies have issued with their own rollout calendars — was located in the sources reviewed. NH Housing's compliance appendix cross-references the federal REAC protocol and Treasury Regulation §1.42-5(c)(2)(iii)(C)(4) directly, without adding a state-specific timeline on top of the federal one.