Construction monitoring, the CPA cost certification, and the path to Form 8609 — South Carolina

Progress reporting and a fixed 25/50/75/100% inspection cadence

Every awarded development — 9% or 4%/TEB — is subject to SC Housing's Progress Monitoring chapter (Appendix E §III). The owner must submit a quarterly Exhibit L Progress Report accurately describing the development's status, with the first report due April 7 of the calendar year following the Reservation or Carryover, and subsequent reports due July 7, October 7 and January 7 until the PIS application is submitted. Separately, and regardless of the Exhibit L cadence, every development is subject to four fixed construction progress inspections tied to physical completion — 25%, 50%, 75% and 100% — and the 100% inspection must be requested within 60 days of receiving the Certificate of Occupancy on the last building completed.

This deal-by-deal clock is a real structural difference from states that publish a single placed-in-service date for an entire competitive round: in South Carolina, two developments awarded in the same 9% cycle can have different 12-month, 15-month and PIS deadlines simply because their Reservation Certificates were executed on different dates. Missing the 10% Test deadline (eleven months after Carryover, extendable to at most twelve) or the PIS deadline outright is one of the enumerated grounds for a three-year suspension from every Authority-administered program, not just forfeiture of that one award (Appendix E §VII.A).

Accessibility: a mandatory third-party consultant who inspects three times, not a paper certification

Appendix B's Code Compliance section requires construction to meet, in addition to every applicable federal, state, county, city and local code, the Fair Housing Act, Section 504, HUD Housing Quality Standards (HQS), HUD Minimum Property Standards (MPS) and HUD Uniform Physical Condition Standards (UPCS) (Appendix B §I.A). But SC Housing does not treat that as a paperwork requirement satisfied by an architect's stamp: every owner must contract with a third-party Qualified Accessibility Consultant — someone with no identity of interest with any Development Team member and at least five years of accessibility-compliance-assessment experience on affordable rental housing — who performs a pre-construction plan review, at least two training sessions for the architect, general contractor, job superintendent and every affected subcontractor trade (one held on site), an inspection of the site after framing, and a final inspection after construction completion. The Authority must receive the consultant's report and documentation that every identified issue was resolved before cost certification can be submitted (Appendix B §II.A).

The 5% and 2% pools cannot share a unit — the same unit may not be used to satisfy both the Type A and Type B counts — and for Older Persons 55+ developments, 100% of the non-Type-A units in new construction must additionally be accessible and adaptable (Type B) under the Fair Housing Amendments Act of 1988 (Appendix B §II.C, §II.E). Because the post-framing inspection is a distinct, mandatory checkpoint separate from the final inspection, an accessibility defect caught only at final inspection — after drywall, flooring and fixtures are in — is a materially more expensive fix than the same defect caught after framing.

Cost certification: a GAAP/GAAS CPA audit you cannot amend once filed

The PIS application must include Exhibit J-2, the schedule of actual costs incurred in construction, and "a Certified Public Accountant must perform an audit and issue an opinion letter in accordance with Generally Accepted Accounting Principles and Generally Accepted Auditing Standards and execute the CPA Certification Form" (Appendix E §IV). That is a materially lighter standard than the Yellow Book (GAGAS) audit some other states require of their contractor cost certifications — South Carolina's text names only GAAP and GAAS. The development team must additionally certify that all costs have been reported for inclusion in the cost certification, and that the eligible-basis review excluded any ineligible costs after careful review; the Authority may still require an attorney opinion for costs it finds questionable, and it independently applies industry standards to determine total actual allowable construction cost, reducing the LIHTC allocation if the audited or Authority-determined actual cost comes in under the budgeted cost at application (as amended by approved change orders).

The QAP's own text on finality is unusually blunt: "Once submitted Owners may not modify or resubmit a certification. All underwriting decisions based on the submitted certification are final" (Appendix E §IV). There is no described cure path for an error discovered in the cost certification after submission — which puts real pressure on getting the CPA audit right the first time, including reconciling any line item that moved from the Application budget.

Form 8609: held for the whole multi-building development, then executed and mailed

After a complete PIS application, every unit must be 100% complete and available for immediate occupancy by the placed-in-service deadline, documented by Certificates of Occupancy (or a local-government equivalent); missing either the completeness or timing criterion can cancel the LIHTC allocation outright. Only once that PIS application is complete does the Appendix E text turn to issuance: "the Authority will execute and mail Form 8609(s), but not until the last building in a multi-building development has been placed in service" (Appendix E §IV) — SC Housing does not release 8609s building by building as each one is placed in service. The Fee Schedule prices a $100 charge per form for any subsequent Reprocessing of Form 8609, which is worth budgeting for if a building-identification-number (BIN) or unit-count correction surfaces after issuance.

Prevailing wage: no South Carolina law of its own — Davis-Bacon shows up only through federal layering

The U.S. Department of Labor's own state-by-state prevailing wage page lists South Carolina under "States without Prevailing Wage Laws" — confirmed directly against DOL's published list rather than assumed. Neither the 2025-2026 QAP, Appendix B, nor Appendix E (the LIHTC Manual) mentions prevailing wage or Davis-Bacon anywhere in connection with the tax-credit-only construction requirements described above. Davis-Bacon and its related prevailing-wage requirements do surface in South Carolina, but only on the HOME side of a deal: SC Housing's HOME/LIHTC Developments Implementation Manual (Rev. 2/2023) lists Davis-Bacon compliance among the federal cross-cutting requirements for HOME-funded developments, requires confirming the applicable Davis-Bacon wage decision as an underwriting step, and requires an SC Illegal Immigration Reform Act certification (Form M-56) for every subcontractor specifically "if development is subject to Davis-Bacon requirements." A standard 9% or 4%/TEB LIHTC deal with no HOME, CDBG, or other federal construction subsidy layered in has no Davis-Bacon exposure under any South Carolina-specific rule this research could locate; a deal that does layer in HOME funds should expect Davis-Bacon wage decisions, certified payrolls, and the related federal labor-standards paperwork regardless of what the QAP itself says.

Suspension and debarment risk runs through the construction phase, not just compliance

Appendix E §VII ties several construction-phase failures directly to Authority-wide sanctions rather than just the single award. Failing the 10% Test or the placed-in-service deadline by the Code's own deadline, allowing a Carryover to lapse, removing a General Partner (absent death, bankruptcy, or cessation of business), or providing a false or inaccurate certification can each trigger a three-year suspension from every Authority-administered program — not only the LIHTC program. Providing false or misleading information to the Authority or a Hearing Officer, or structuring a partnership or developer agreement to circumvent Authority requirements, can result in permanent debarment, and for nonprofit-sponsored developments a breach of the continuous-material-participation requirement debars the nonprofit and all of its officers and directors. Separately, once a development reaches 75% construction completion, the owner must schedule a mandatory compliance training session for the on-site management staff who will handle day-to-day eligibility determinations — a requirement that is easy to let slip because it lands mid-construction, well before lease-up planning normally starts in earnest.