"Our 10% Test cleared and the project's under construction — what exactly does OHFA need before it will cut the 8609, and when is the $2,550-a-unit compliance fee actually due?"
One agency, one committed chain of custody: carryover to 8609
OHFA administers construction, compliance, and asset management for LIHTC deals inside a single agency, so an Ohio project doesn't get handed between separate development and compliance authorities the way it does in some states — it moves through one QAP-defined sequence: Carryover Allocation Agreement, 10% Test, assignment to a Project Administration Analyst, quarterly construction reporting, a Compliance Next Steps (CNS) meeting, and the 8609 request itself, which then transfers the file to OHFA's Office of Program Compliance.
For a same-year reservation (a 2026 application awarded 2026 credits), the Carryover Allocation Agreement buys two additional calendar years to place buildings in service; a forward-allocated award (a 2026 application awarded 2027 credits) instead receives its Carryover Allocation the following July. Either way, OHFA checks the federal 10% Test — at least 10% of reasonably-expected basis expended by the close of the second calendar year following the year of allocation (26 U.S.C. §42(h)(1)(E)(ii); 26 C.F.R. §1.42-6) — before the file moves to a Project Administration Analyst, who owns the relationship through construction and closeout.
| Milestone | Timing / deadline | What happens if it's missed |
|---|---|---|
| Carryover Allocation Agreement | 2 additional calendar years to place in service (same-year reservation) | Underlying allocation at risk if the 10% Test or PIS deadline then isn't met |
| 10% Test | Close of the 2nd calendar year following the allocation year | Allocation may be revoked absent a Credit Refresh/Exchange request |
| Quarterly Construction Monitoring Form | Jan 1 / Apr 1 / Jul 1 / Oct 1, from first reporting period after Board approval through 100% completion | Can delay future award funding and reimbursement, and feeds Good Standing review |
| Compliance Next Steps (CNS) meeting | At 50% construction completion (new construction/HDAP) or at ownership transfer (acq/rehab) | 8609 issuance is delayed until CNS is complete |
| 8609 request | Within 365 days of the last building's placed-in-service date | Noncompliance with the Good Standing Policy (Appendix B) |
OHFA also has three named relief valves if a deadline slips for reasons outside the owner's control — but none are automatic. A Credit Refresh/Exchange (for a missed 10% Test) requires returning the original allocation, demonstrating real progress, and paying a new reservation fee equal to 1% of the allocation; Placed-In-Service Relief requires the same return-and-reapply structure plus roughly 75% demonstrated construction progress and a 10% reservation fee; both extend the deadline by up to one year. A third path, the Future Credit Ceiling Special Allocation, exists only where an unrelated third party's action (HUD, USDA Rural Development, a local government, a property owner) blocked the deal, and the reapplication must happen within two years of the original allocation being returned or revoked.
The 8609 package, cost certification, and the fee that lands with it
The 8609 request itself is a document package, not a single form: OHFA maintains separate Owner's Cost Certification and Contractor's Cost Certification workbooks (distinct from the earlier Carryover Cost Certification tied to the 10% Test), and projects completed ahead of their deadline must also submit a Final Performance Report with the request. None of this can be submitted until the CNS meeting has closed out the file.
OHFA's Compliance Monitoring Fee is currently $2,550 per unit under the PY2026-2027 9% LIHTC QAP fee schedule — up from $2,400 per unit as recently as the 4% LIHTC QAP's March 2025 fee schedule — and it is listed as due "with IRS Form 8609 request," not as a recurring annual charge. Treat it as a closing-stage cost to underwrite for at 8609 (a 100-unit deal owes $255,000 at that moment), and confirm the live rate against OHFA's current fee schedule before finalizing a sources-and-uses budget, since OHFA's own QAP language notes fees may change without a QAP amendment.
Missing any of this feeds directly into OHFA's Good Standing Policy (Appendix B of both QAPs), which lists 14 grounds for a not-in-good-standing designation — including uncorrected Forms 8823, failure to request the 8609 in a timely manner, failure to pay applicable program fees, and deviating from an approved project plan without OHFA approval. A designation blocks the developer or any listed team member from participating in any OHFA program, not just the flagged deal, until it's resolved; appeal runs to the Multifamily Committee and then the OHFA Board, whose decision is final.
Prevailing wage is a funding-stack question, not a blanket LIHTC rule
Ohio Revised Code Chapter 4115 — the state's general "Wages and Hours on Public Works" prevailing wage law — applies by its own terms only to a "public improvement" undertaken or financed by a "public authority" (ORC §§4115.03–.04). A privately owned LIHTC new-construction or rehab deal, on its own, doesn't meet that definition, so ORC 4115 is not the statute that reaches a typical Ohio LIHTC construction contract; don't assume it applies by default.
The statute that actually can reach an OHFA-funded residential deal is ORC §176.05 (Residential Prevailing Wage), triggered when the project is financed in whole or part with state moneys — in practice, Ohio Housing Trust Fund (OHTF) or National Housing Trust Fund (NHTF) gap financing layered onto the LIHTC deal, not LIHTC or tax-exempt bonds by themselves. ORC 176.05 carries its own exemptions worth running the numbers on: developments with fewer than 6 units are exempt for a for-profit sponsor, fewer than 25 units for a 501(c)(3) nonprofit sponsor, and — separately — a nonprofit-sponsored project that draws more than 12% of its costs from federal loans, grants, LIHTC equity, or insurance is exempt outright. A lot of standard nonprofit-GP 9% deals with substantial federal LIHTC equity end up landing in that federal-funding exemption once it's actually calculated.
Federal Davis-Bacon wages are a separate trigger again, tied to federal money in the capital stack — most commonly HOME funds, where 12 or more HOME-assisted units bring Davis-Bacon along, and Federal Historic Tax Credit layering, which OHFA's own cost-containment underwriting-exception language names as a recognized cost driver. OHFA's Project Administration team (the same group running quarterly construction monitoring) is explicitly tasked with overseeing prevailing wage compliance where it applies — so confirm which statute, if any, actually attaches to a given deal's specific funding stack rather than assuming Chapter 4115, or assuming nothing applies at all.
| Funding layered into the deal | Wage law | Key exemption to check |
|---|---|---|
| LIHTC / tax-exempt bonds alone | Neither ORC 4115 nor ORC 176.05 applies | N/A — private construction, not a "public improvement" |
| Ohio Housing Trust Fund / National Housing Trust Fund | ORC §176.05 (Residential Prevailing Wage) | <6 units (for-profit) or <25 units (501(c)(3)) exempt; >12% federal-funded costs exempt for nonprofits |
| HOME / HOME-ARP (12+ HOME-assisted units) | Federal Davis-Bacon Act | Fewer than 12 HOME-assisted units in the development |
| Federal Historic Tax Credits | Federal Davis-Bacon Act (per OHFA's own cost-containment guidance) | Project-specific; confirm with the Historic Tax Credit financing terms |
Where this goes wrong
- Assuming Ohio Revised Code Chapter 4115 blanket-applies prevailing wage to LIHTC construction — it's scoped to public-authority "public improvements," and the real trigger analysis runs through ORC §176.05 (OHTF/NHTF layering) and federal Davis-Bacon (HOME/federal layering), each with its own exemption thresholds.
- Missing the Compliance Next Steps trigger points — 50% construction completion for new construction/HDAP, or the ownership-transfer date for acquisition/rehab — since CNS is a hard gate and 8609 issuance is delayed until it's complete.
- Letting Quarterly Construction Monitoring Form deadlines (Jan 1 / Apr 1 / Jul 1 / Oct 1) slip — outstanding submissions can hold up future award funding and reimbursement, and feed into Good Standing review.
- Treating the 8609 request as open-ended — it's due within 365 days of the last building's placed-in-service date, and missing it is itself a named Good Standing Policy violation.
- Underestimating the 8609 document package — separate Owner's and Contractor's cost certifications, a distinct Carryover cost certification tied to the 10% Test, and a Final Performance Report for early-completed projects, on top of the CNS documentation.
- Forgetting the Compliance Monitoring Fee is due with the 8609 request itself, not staged as an ongoing opex line — budget the current per-unit rate (verify it against the live QAP fee schedule, since OHFA can adjust it without a QAP amendment) as a closing cost.
- Assuming 10% Test or placed-in-service relief is automatic for a delay outside the owner's control — both the Credit Refresh/Exchange and Placed-In-Service Relief paths require formally returning the original allocation before a new one is issued, plus a real reservation-fee cost (1% and 10% of the allocation, respectively) and documented construction progress.
- Skipping direct contact with OHFA's Compliance Next Steps team (ComplianceNextSteps@ohiohome.org) — since CNS is the literal handoff from OHFA's Development office to its Office of Program Compliance, and the 8609 clock doesn't clear until that handoff is documented.
- HUD
- LIHTC
- State QAPs
- IRS § 42
- Housing Finance Agencies