Carryover to cost certification: OHCS's placed-in-service sequence, and Oregon's prevailing-wage blind spot — Oregon

Carryover, the 10% test, and the one permitted credit swap

9% LIHTC Applicants must, on or before November 1st of the LIHTC Allocation Authority Year, submit either an application for LIHTC Carryover Allocation (if the Project is still in the construction phase) or a final application indicating the Project has been placed in service. Carryover Allocations are made on a per-project basis, as a lump sum, with the actual credit amount for any specific building apportioned from that lump sum once the building satisfies the placed-in-service allocation requirements -- meaning the Carryover Allocation Agreement itself does not lock in a fixed per-building number, only the project total.

The 10% test runs on its own clock, separate from the calendar-year Carryover deadline: within twelve (12) months of the date of the Carryover Allocation Agreement, the Applicant must demonstrate to OHCS's satisfaction that it has incurred more than 10% of the reasonably expected basis of the Project, both by certifying to OHCS that it has met the requirement and by submitting a CPA's certification that itemizes all costs incurred to satisfy the test. If any portion of the developer fee or consultant fees is being counted toward the 10%, the certification must include a detailed breakdown of the services performed and the fee apportioned to each service, along with copies of the underlying developer and consultant contracts. OHCS may require additional documentation and may exclude or limit costs it cannot determine to be reasonable and appropriate -- this is a real substantive review, not a rubber-stamp on the CPA's number.

Federal law -- not the QAP -- sets the placed-in-service deadline this test protects against missing: IRC §42(h)(1)(E) requires 9% buildings to be placed in service by the close of the second calendar year following the year the allocation was made. OHCS built a single, limited escape hatch into the QAP for a project that will miss that date: an Applicant may request, no later than March 31st of the year following the reservation of LIHTC, to return its allocation and exchange it for an award of the same credit amount from the next year (a "credit swap" or "credit refresh"), on a showing of good cause, and "is limited to one return per application." The QAP's own worked example: a 2025-awarded Project with a forward reservation of 2026 credits that will not be placed in service by December 31, 2028 can swap, if requested by March 31, 2026, for 2027 credits and a new December 31, 2029 deadline. After the swap, the project must comply with the requirements applicable in the initial year of award and all its original representations, unless OHCS specifically and explicitly waives them.

Placed-in-service: what OHCS needs before it will move on your Form 8609

All LIHTC Applicants must complete a final application with required documentation, and any changes from Equity Closing forward are subject to OHCS review and approval before Form 8609 issuance. OHCS states plainly that it "will accept and process final application documents and issue IRS Form 8609(s) throughout the year" and "reserves the right to set a schedule for review and approval of 8609(s)" -- there is no fixed quarterly or semi-annual batch date published in the QAP. The operative deadline that does exist runs the other direction: a Project Owner must submit a complete application with all Placed-In-Service documentation -- including the independent Certified Public Accountant's Report (Cost Certification) and the certificates of occupancy for every building in the Project -- at least sixty (60) days before the Owner expects to receive Form 8609. Commercial costs must be broken out from the residential cost certification, in a separate column or deducted from residential totals, with both components identified on the budget use pages.

What the QAP does not specify is the level of CPA engagement that satisfies "the independent Certified Public Accountant's Report (Cost Certification)" -- unlike some other states' QAPs, this research found no reference in either the 2025 QAP or the OHCS LIHTC Compliance Manual to a required audit standard (for example, a full GAAS or Government Auditing Standards opinion versus a review or agreed-upon-procedures engagement). Confirm the expected engagement level directly with OHCS's Multifamily Finance division before assuming a lower-cost engagement will be accepted.

For 4% LIHTC Projects, upon completion the Borrower must additionally provide OHCS an analysis of the breakdown of bond-funded costs, to meet the federal tax requirements described in the Project's Tax Certificate and Agreement (or similar document), certified by an authorized Borrower representative -- commonly called a "Good Costs Certificate" -- together with more detailed backup information as requested by OHCS or Bond Counsel for the State. This is a separate deliverable from the CPA cost certification, tied to the bond-financing side of a 4% deal rather than the tax-credit side.

OHCS's LIHTC Compliance Manual separately confirms that "OHCS issues the IRS Form 8609 for each building in a property once the cost certifications have been completed" -- consistent with the QAP's own sequencing (one complete, whole-project cost certification and CO package triggers the process), after which individual per-building 8609s are generated because Form 8609 is inherently a per-building instrument under Section 42. The owner then completes Form 8609 Part II, including the Line 8b multiple-building-project election, and must send a completed copy back to OHCS for its own recordkeeping and compliance-monitoring file.

Project changes during construction: a defined list, a 30-day OHCS response target

An Applicant must notify OHCS in writing of, and obtain written consent to, any material change in a Project, as soon as the change is first identified. OHCS "will endeavor to respond within thirty (30) days" of receiving that notice and request for consent, though it may give, withhold, or condition consent at its reasonable discretion. The QAP defines "material change" by a specific, twelve-item list rather than a general standard, including: a change in the number of buildings or units; the project contact person; the Identity of Interest disclosure; the development team; total project costs; any financing source (debt or equity); operating revenue or expenses shifting by more than 10%; anything that would change the standards OHCS uses to evaluate the project; a scope change (adding or subtracting buildings, square footage, units, or design elements affecting budget or livability); a change in project type or intended tenant population; a sponsor/ownership change with financial impact; and a funding gap, after approval but before closing and construction start, of more than 10% of OHCS's investment (excluding tax credits).

A written request for approval of a material change must include a narrative description, supporting documentation, and the applicable revised application pages. OHCS decides whether the change is substantial enough to send the project back to a previous step in the ORCA (Oregon Centralized Application) process, and if it grants the request -- as submitted, modified, or conditioned -- it may adjust the funding allocation amount to keep the pro forma feasible.

Accessibility: a mandatory federal floor, and a separately scored "Enhanced Accessibility" ceiling

Oregon's LIHTC accessibility requirements come in two distinct tiers that are easy to conflate. The mandatory floor is federal and applies regardless of anything in the QAP: OHCS's Compliance Manual states that in covered multifamily housing of 4 or more units with an elevator, built for first occupancy after March 13, 1991, all units must meet the Fair Housing Act's seven design-and-construction requirements -- accessible entrance on an accessible route, accessible public and common-use areas, usable doors, an accessible route into and through the dwelling unit, accessible light switches/electrical outlets/thermostats/environmental controls, reinforced bathroom walls, and usable kitchens and bathrooms -- and that in similarly covered buildings without an elevator, the same seven requirements apply to ground-floor units only.

Section 504 of the Rehabilitation Act is a separate, stricter standard, but the Compliance Manual scopes its applicability narrowly and explicitly: "TCAP funds qualify as federal financial assistance, resulting in Section 504 becoming applicable to developments that receive any funding through the program," and separately, "HUD has confirmed that Section 504 of the Rehabilitation Act applies to all TCAP grants" and to "developments receiving funds from the Exchange Program." Section 504 mandates that at least 5% of a new building or substantial rehabilitation be accessible to those with mobility impairments, plus an additional 2% accessible to persons with hearing or vision impairments, and that housing providers pay for reasonable modifications rather than merely allow them as the Fair Housing Act requires. Critically, this research found no statement in either the QAP or the Compliance Manual that Section 504 attaches automatically to every OHCS LIHTC award -- on OHCS's own text, it is triggered by a specific federal-funding hook (TCAP, the Section 1602 Exchange Program, or comparable federal financial assistance actually flowing through OHCS to the project), not by the LIHTC allocation alone.

Layered on top of both is the QAP's Enhanced Accessibility Standards checklist (Appendix A) -- a scored incentive, not a baseline requirement. A project seeking the associated scoring points must, among other things: hold at least one accessible/universal/inclusive design strategy workshop at the start of Schematic Design, facilitated by an accessibility/universal/inclusive design expert, with a written summary submitted during the ORCA Financial Eligibility Phase; achieve equivalency with ADA Title II Accessibility Requirements at double the standard scoping ratios under 2010 ADA Standards §233 -- 10% of dwelling units fully accessible for mobility impairments (versus the underlying standard's 5%) and 4% with "communication" design elements (versus 2%); make at least 20% of dwelling units (rounded up) comply with Type A unit requirements, with at least one Type A unit regardless of project size; and meet unit-size and clothes-washer/dryer requirements under what the QAP calls "CDM v3.1" -- an acronym this research could not independently expand or locate a source document for; confirm what "CDM" refers to directly with OHCS before relying on those two checklist items.

Oregon's prevailing wage law: broad by design, and entirely absent from OHCS's own LIHTC file

This research found zero references to "prevailing wage," BOLI, Davis-Bacon, or ORS 279C anywhere in the 2025 QAP or the OHCS LIHTC Compliance Manual. OHCS's construction-through-placed-in-service paperwork does not verify Oregon Prevailing Wage Rate (PWR) compliance at any point -- that determination and its verification sit entirely with the developer, the general contractor, and Oregon's Bureau of Labor and Industries (BOLI), outside the LIHTC file altogether.

Oregon's PWR law, ORS 279C.800 to 279C.870, does reach further than federal Davis-Bacon in one respect the task brief flagged: "public works" under ORS 279C.800(6)(a) includes not only projects a public agency directly contracts for, but also "[a] project that uses $750,000 or more of funds of a public agency for constructing, reconstructing, painting, demolishing, removing hazardous waste from, or performing a major renovation on, a road, highway, building, structure or improvement of any type," and separately, a privately funded project in which "a public agency will use or occupy 25 percent or more of the square footage of the completed project." A typical LIHTC apartment deal is not publicly occupied, so the operative question for most Oregon LIHTC deals is the $750,000 public-funds threshold, not the occupancy test.

Two provisions of ORS 279C.810 (Exemptions) matter directly for LIHTC financing structures. First, the statute's own definition of "funds of a public agency" for purposes of that $750,000 threshold expressly excludes "[t]ax credits or tax abatements" (ORS 279C.810(1)(a)(C)) -- meaning the Housing Credit allocation and the resulting equity are never counted toward the threshold on their own. It also excludes several other items common in LIHTC capital stacks: government grants to a nonprofit unless issued specifically for construction/renovation, waived permit fees, land sold at fair market value, and bond proceeds loaned to a private entity unless used for a public improvement (ORS 279C.810(1)(a)(A), (B), (D), (H)). Second, and separately, ORS 279C.810(2)(d) provides a freestanding exemption -- not conditioned on the $750,000 or 25% tests -- for "[p]rojects for residential construction that are privately owned and that predominantly provide affordable housing." The statute defines its own terms precisely: "affordable housing" means housing serving occupants at or below 60% of area median income (or 80% AMI for owner-occupants); "predominantly" means 60% or more of the project; "privately owned" specifically includes housing on public land ground-leased for 50+ years, and housing owned by a partnership, nonprofit, or LLC in which a housing authority is a general partner, director, or managing member without being a majority owner; and "residential construction" is defined, by reference to a 1978 U.S. Department of Labor memorandum, as "single-family houses or apartment buildings not more than four stories in height" and incidental site work.

That four-story cap is the exemption's clearest limit for a growing share of Oregon's LIHTC pipeline: higher-density urban infill LIHTC buildings running five stories or more do not fit the statute's own definition of "residential construction," and would need a public-funds-threshold or occupancy-based analysis instead of relying on this exemption -- the statute does note that BOLI's commissioner "may consider different definitions of residential construction" from local codes or trade practice, but that is discretionary, not a guarantee.

The exemption's practical reach was also just tested in court. BOLI had determined that a nonprofit developer's plan to convert a century-old church building into 17 affordable apartments -- gutting the interior while preserving the foundation and exterior walls -- did not qualify for the affordable-housing exemption because, in BOLI's reading, the project involved "the renovation of a church building which is neither an apartment building or a single-family home" and therefore fell outside "residential construction." On September 16, 2026, the Oregon Court of Appeals reversed, holding, as reported by Willamette Week and KLCC, that the legislature intended the exemption to cover affordable housing regardless of whether it reuses materials or structure from a prior building. This research reviewed press coverage of the decision (Willamette Week, KLCC, and other outlets), not the court's published opinion itself, so treat the exact holding and any case citation as reported secondhand rather than independently verified against the primary legal text -- but the practical direction is clear: BOLI has been construing the affordable-housing PWR exemption narrowly for adaptive-reuse and conversion projects, and that practice is now under active appellate correction. An Oregon LIHTC deal built inside a converted non-residential structure should not assume BOLI will apply the exemption without a fight, even after this ruling, and should get its own PWR determination from BOLI in writing rather than relying on this guide's summary or on general practice.