"We have the reservation and we're moving into construction -- what does OHFA actually require while we build, and what has to be true before it will execute Carryover, accept Placed-In-Service, and release our 8609s?"
The construction-start clock and the two federal ceilings behind it
This phase opens once a Credit Reservation is in hand, and three deadlines govern nearly everything that follows. The first is Oklahoma's own, and it is easy to miss because it lives in Chapter 36 Rules rather than the Application Instructions: "Construction must begin within nine (9) months of the last calendar day of the month of the Credit Reservation, unless extended for cause by OHFA" (OAC 330:36-4-2.1(f)). The other two are federal, and OHFA's own rules restate them without modification.
| Deadline | Timing | Citation |
|---|---|---|
| Construction commencement | Within 9 months of the last calendar day of the month of the Credit Reservation, unless OHFA extends for cause | OAC 330:36-4-2.1(f) |
| 10% test | Owner's basis must exceed 10% of reasonably expected basis, measured 1 calendar year after the Allocation date | OAC 330:36-2-16(c) |
| Placed in service | Not later than the close of the second calendar year following the calendar year of the Allocation | IRC Section 42(h)(1)(E); OAC 330:36-2-16(a) |
The construction-start rule is enforced with the same remedies as any other Chapter 36 violation -- up to and including return of Credits (OAC 330:36-6-3) -- so it is not merely aspirational guidance.
As in other states running the same federal placed-in-service rule, the unit of measure matters: the deadline is stated in calendar years, not elapsed months, so a late-year Allocation buys materially less real runway than the nominal "two more years" suggests. Building a schedule against the actual close-of-year date, not a mental 24-month bar, is the safer practice.
The 10% test is a CPA certification OHFA accepts, not a determination OHFA makes
Chapter 36 Rules are explicit that OHFA's role in the 10% test is procedural, not adjudicative: "The ten percent (10%) test must be certified by the Owner's certified public accountant, in a form acceptable to OHFA. OHFA's determination as to the satisfaction of the ten percent (10%) requirement is not binding upon the IRS and does not constitute a representation by OHFA to the taxpayer or any other party to that effect" (OAC 330:36-2-16(c)). A Development that fails the test simply "will not have a valid Carryover Allocation" -- there is no cure period written into the Rules for a missed test itself, only for the paperwork around it.
The QAP's own late-fee schedule treats the 10% test as a filing deadline as much as a substantive one: Applicants who fail to timely file "Agreement, Application, ten percent (10%) cost Certifications, opinions, and documents" for a Carryover Allocation incur a $100 per calendar day late fee, with no stated cap.
Construction monitoring: two OHFA site visits, and real dollar caps on developer and contractor fees
OHFA's own description of its construction-period field presence is brief: "Once a Development is Allocated Affordable Housing Tax Credits, OHFA Staff, or its assigns, will make 2 visits, or more as necessary, to the construction site of the proposed Development. OHFA will contact the owner of the Development to ensure that someone will be at the construction site the day of the planned visit." No separate dollar fee for these visits appears anywhere in Attachment A's otherwise itemized fee list -- unlike several other line items on that same schedule, this one carries no stated charge, which this research treats as a genuine absence rather than an omission to fill in.
| Item | Cap | Detail |
|---|---|---|
| Developer Fee (9% Applicants) | 15% of Eligible Basis | Before any boost, excluding the Developer Fee itself |
| Developer Fee (4% Applicants) | 20% of Eligible Basis | Before any boost, excluding the Developer Fee itself |
| Contractor Fee, Small Developments (≤ 60 units) | 16% of Hard Construction Costs | General requirements ≤ 6%, general overhead ≤ 2%, builder's profit ≤ 8% |
| Contractor Fee, Large Developments (> 60 units) | 14% of Hard Construction Costs | General requirements ≤ 6%, general overhead ≤ 2%, builder's profit ≤ 6% |
| Construction contingency | 5% (new construction) / 10% (rehabilitation) | Of a defined Hard Construction Costs base |
| Cost per square foot | $250 ceiling (excludes land) | Failed Threshold item if exceeded, except Historic Rehabilitation or Federal Opportunity Zone deals |
This research also looked specifically for an Oklahoma tornado- or severe-weather-season construction accommodation -- something a state with Oklahoma's storm exposure might reasonably be expected to address -- and found none. The only storm-related construction content in the QAP is an optional Selection Criteria amenity: a Storm Shelter or Safe Room, worth 5 of the 10 available Development Amenities points, which "must be constructed in accordance with the most recent State of Oklahoma Uniform Building Code Commission minimum State requirement for storm shelters," currently ICC/NSSA 500, FEMA 320, or FEMA 361. That is a scoring incentive for a building feature, not a construction-timeline extension. The only weather-adjacent scheduling lever this research located anywhere in the primary sources is the general "unless extended for cause by OHFA" language in the 9-month construction-start rule itself -- a discretionary, deal-by-deal request, not a codified right or a defined extension period.
Cost certification: an audited certification of total costs, plus a separate contractor certification
Chapter 36 Rules set the substantive bar directly, and it reaches further than a contractor-only audit: before a Final Allocation, OHFA requires "An audited Certification of the Total Development Costs, and the Eligible Basis and qualified basis of each Building in the Development and the sources and uses of funds for the Development prepared by an independent certified public accountant" (OAC 330:36-2-17(c)(1)), with "all opinions" required to reflect the professional's own "independent inquiry into the matters contained therein."
OHFA's own Form B -- "Independent Accountant's Report for Final Allocation," filed alongside Form A, the Final Cost Certification -- shows exactly what that audit commits the CPA to. The operative sentence is unambiguous: "We conducted our audit in accordance with auditing standards generally accepted in the United States of America." That is a full GAAS audit opinion, not a review or compilation. The same form frames the certification as being on OHFA's own special-purpose basis of accounting -- "a comprehensive regulatory basis of accounting other than generally accepted accounting principles" tied to Section 42 eligible-basis rules -- with the CPA opining that costs and eligible basis are "presented fairly, in all material respects" on that basis.
Separately, and on top of that accountant's opinion, "Beginning with any development awarded Tax Credits in 2022; OHFA will require a General Contractor Cost Certification to be submitted with all of the final documents associated with the proposed Development." The QAP allows the same accountant to complete both certifications where an identity of interest exists between the General Contractor and the Developer, but the two certifications remain distinct deliverables, not one document doing double duty by default.
The paperwork deadlines that end the phase, and the fees gating 8609 issuance
| Requirement | Deadline / amount | Consequence if missed |
|---|---|---|
| Placed-In-Service Acknowledgment (with Certificate of Occupancy) | Within 30 calendar days of each Building's Certificate of Occupancy | $10/day late fee; no negative points, but may factor into a general capacity review |
| Final Cost Certification | Due February 28th after the placed-in-service year | "No exceptions, no drafts, no extensions"; $100/day late fee; a late "corrected" cert restarts the $100/day clock |
| LURA / Final Packet | Due November 1st of the placed-in-service year | 3 negative points plus $100/day late fee; the QAP's electronic-submission allowance explicitly excludes the LURA |
| Allocation fee | 11% of the total Allocation (min. $1,000), due within 14 calendar days of award notice | Carryover Allocation Agreement will not be executed and Form 8609(s) will not be issued until paid |
| Processing fee | 1% of the total Allocation, due with the Final Allocation request | Form 8609(s) will not be issued until paid |
| Form 8609 issuance conditions | Executed Regulatory Agreement and exhibits; permanent Certificates of Occupancy for each Building; all applicable fees paid | OHFA will not issue Form 8609(s) until every condition is resolved to its satisfaction (OAC 330:36-2-17(e)) |
The state credit rides on the same back end: the Owner's Eligibility Statement for the Oklahoma Affordable Housing Tax Credit "will be issued and provided to the Owner along with the 8609s for the project after all final cost certifications and accountant reports have been submitted to OHFA and OHFA has performed a final underwriting." A late or incomplete cost-certification package delays the state credit exactly as it delays the federal 8609.
The 4% bond track runs its own parallel closing clock
On a 4% deal, a separate closing deadline runs from the credit award rather than from Carryover: "Developments that are financed with 4% Credits and Multifamily Bonds must close on the issuance of multifamily bonds within 18 months of the date of the award of 4% credits," with an appeal to the OHFA Board of Trustees available if a Development cannot close in time. A second, federally-driven clock applies specifically to developments in a QCT or DDA at the time of application: per HUD guidance the QAP restates directly, if the area later drops off the QCT/DDA list, the multifamily bonds must still be issued -- and the building placed in service -- within a 730-day period after a complete application, or the 130% basis boost is lost outright. The same Feb. 28 Final Cost Certification and Nov. 1 LURA deadlines described above apply to 4% Bond Developments without modification.
Where this goes wrong
- Assuming OHFA runs a lender-style monthly draw-inspection regime or a quarterly inspection cadence during construction. OHFA's own fee schedule describes two site visits, or more only "as necessary" -- a materially lighter field presence than several other states' programs, and one this research found no separate dollar fee attached to.
- Treating the February 28th Final Cost Certification deadline as negotiable. The QAP's own language is categorical -- "No exceptions, no drafts, no extensions" -- and a late "corrected" certification restarts the $100/day late-fee clock rather than pausing it.
- Submitting the LURA/Final Packet electronically because other Carryover and Final documents accept electronic filing. The QAP explicitly carves the LURA out of that allowance; it must be filed in recordable form by the November 1st deadline.
- Assuming a single accountant sign-off satisfies OHFA's cost-certification requirement. Chapter 36 Rules require an audited certification covering total development costs, eligible basis, qualified basis, and sources and uses (OAC 330:36-2-17(c)(1)), and separately, for any Development awarded credits in 2022 or later, a distinct General Contractor Cost Certification -- the same accountant may complete both only where an identity-of-interest disclosure applies.
- Assuming Form B's accountant opinion is a review or compilation rather than a full audit. The form's own operative sentence commits the CPA to an audit "in accordance with auditing standards generally accepted in the United States of America" -- GAAS, not a lesser-assurance engagement.
- Missing the 9-month construction-start clock because it lives in Chapter 36 Rules rather than the Application Instructions. It is measured from the last calendar day of the month of the Credit Reservation, not from Carryover execution or a financing closing, and it carries the same remedies as any other Rules violation, including return of Credits.
- Assuming Oklahoma's tornado or severe-weather season is addressed anywhere in the construction-timeline rules. This research found no codified weather-delay or force-majeure extension provision in the QAP, the Compliance Manual, or Chapter 36 Rules -- the only lever located is OHFA's discretionary "extended for cause" language in the 9-month construction-start rule, and the only tornado-specific text found anywhere addresses an optional Storm Shelter/Safe Room scoring amenity, not a construction deadline.
- Not budgeting the Allocation fee -- 11% of the total Allocation, minimum $1,000, due within 14 calendar days of the award notice. OHFA will not execute the Carryover Allocation Agreement or issue Form 8609 until it is paid.
- Treating the 1% Processing fee at Final Allocation as optional or deferrable. Form 8609 issuance is expressly conditioned on its receipt, on top of the Allocation fee already paid at Carryover.
- Treating the $250-per-square-foot cost ceiling as a soft guideline. Exceeding it is a Failed Threshold item outright (excluding land costs), with narrow exceptions only for Historic Rehabilitation and Federal Opportunity Zone deals.
- HUD
- LIHTC
- State QAPs
- IRS § 42
- Housing Finance Agencies