The post-award readiness clock — Colorado

One QAP, three post-award tracks that don't share a start date

Colorado Housing and Finance Authority (CHFA) administers the federal 9 percent credit, the federal 4 percent credit paired with private activity bonds, and Colorado's own state Affordable Housing Tax Credit under a single Qualified Allocation Plan — currently the 2025–2026 QAP, Second Amendment, adopted by the CHFA Board on September 26, 2025 and approved by the Governor on November 13, 2025. CHFA's own Project Readiness criteria state the stakes plainly: the agency "will pay particular attention to the ability of the Applicant to meet all the Carryover requirements or state credit Milestone requirements identified in the Preliminary Application, within 13 months or 18 months, as applicable, of Application reservation." Those two numbers — 13 and 18 — are not interchangeable, and which one applies depends on which credit is actually driving the award.

Federal 9 percent: the 13-month Carryover deadline and its certified 10 percent test

A federal 9 percent award starts as a Preliminary Reservation letter, valid for 13 months from its date of issuance and revocable if the Applicant fails to show "financial feasibility, sufficient progress toward placement in service, or eligibility for a Carryover Allocation." Inside that same 13 months, the QAP requires the Applicant to "incur more than 10 percent of the total project costs, meet all other QAP requirements for Carryover listed in the 9 percent Carryover Application Checklist, and meet any additional requirements set forth in the Preliminary Reservation letter." Miss it, and the consequence is explicit: the project "will lose the Reservation and may not re-apply for a minimum of six months," unless the Applicant notifies CHFA in writing before the deadline that it is voluntarily returning the credit.

The 45-business-day processing window is not slack time — it's a hard floor. The QAP requires Applications to be "received at least 45 business days prior to the deadline when locking in the Applicable Percentage Rate (APR)," which means the practical filing deadline sits roughly nine weeks earlier than the headline 13-month date, not on it.

The 10 percent test itself is not a narrative assertion — it's a certified exhibit. Item 8 of CHFA's 9 Percent Housing Tax Credit Carryover Application Checklist (version 01/26.v3) requires an "Accountant Opinion Letter and 10 percent test" that "will follow CHFA's Accountant Opinion Carryover template," matched to "the application worksheet '10 Percent Test for Carryover.'" The same checklist requires a fully executed "Certificate as to Ownership and Basis," and notes that "the signature block provided on this document will be duplicated on the Carryover Allocation Agreement" itself — the Carryover paperwork and the legal instrument are built from the same signed document, not separately reconciled afterward.

Even after the Carryover Allocation Agreement executes, the credit isn't locked in. CHFA states plainly that it "retains the right to recapture a Carryover Allocation of Housing Tax Credits to a project prior to the end of the two-year Carryover Allocation period allowed under the Code" if the project fails the agreement's own conditions.

The state Affordable Housing Tax Credit's 18-month Milestone clock — and when it disappears

A state credit award starts with its own Preliminary Reservation Letter of State Credits, and the QAP states that "the determination as to compliance with the QAP shall remain valid and effective through the end of the third year after the issuance of the Determination Letter" — roughly three times longer than the federal 9 percent track's 13-month runway to Carryover. Inside that longer window sits a separate, shorter gate: the state credit Milestone. "Documentation will be required by the first business day of the eighteenth (18th) month following the reservation letter," with the same 45-business-day CHFA processing floor and the same 10-business-day cure window as the federal Carryover process, and the same consequence for silence — the Preliminary Reservation "is subject to revocation."

The genuinely distinctive Colorado mechanic is the exception clause: "The Milestone requirement does not apply to state credit awarded with federal 9 percent Housing Tax Credit." CHFA pairs a fixed $500,000 of standard annual state credit with federal 9 percent Applications on request, and when that pairing happens, the state credit rides on the federal 9 percent Carryover clock (13 months, 10 percent cost test) instead of running its own 18-month Milestone clock. A state credit that stands alone, or that pairs with the noncompetitive federal 4 percent credit in Round Two, is the one that actually has to clear the 18-month Milestone gate.

The two checklists confirm the split. CHFA's State Housing Tax Credit Milestone Checklist (version 01/26.v2) shares most exhibits with the federal Carryover checklist — Applicant Certification, financing-commitment evidence, executed Partnership Agreement, executed General Contractor contract, Energy Efficiency election, an updated environmental report — but it does not include the Accountant Opinion, the "10 Percent Test for Carryover" worksheet, the Attorney Opinion, or the Certificate as to Ownership and Basis that the federal Carryover checklist requires. It does add items the federal checklist doesn't carry as standalone entries: "evidence of local government contribution received," and an executed Development Agreement, if applicable and not included in the partnership agreement. At Final Allocation, the state credit's closeout document is also its own: CHFA "will issue a Colorado Allocation Certification form (similar to the IRS Form 8609) for the project," not an IRS Form 8609 itself.

Federal 4 percent bond deals skip the carryover gate for a flat three-year runway

A federal 4 percent award never produces a Carryover Allocation Agreement at all. Instead, the Applicant receives an "Initial Determination" — a Section 42(m) letter — and the same three-year compliance-validity language that governs the standalone state credit track applies here too: the determination "shall remain valid and effective through the end of the third year after the issuance of the Determination Letter." There is no intervening percentage-of-cost test and no separate carryover paperwork package between the Initial Determination and placed-in-service.

That's not an oversight — it follows directly from how the federal 4 percent credit is authorized. The QAP notes that "under Section 42(h)(4) of the Code, projects financed with tax-exempt bonds may be entitled to 30 percent present-value Housing Tax Credits outside the federal Housing Tax Credit ceiling." Because bond-financed 4 percent credits sit outside the state's per-capita volume cap, they were never allocated through the carryover mechanism that IRC Section 42(h)(1)(E) governs in the first place — that provision's 10 percent test and its own placed-in-service clock apply to credits allocated from the capped pool (the federal 9 percent credit, and any state credit paired with it), not to bond-financed 4 percent deals. CHFA's QAP structure — Carryover Agreement for 9 percent, none for 4 percent — is a direct reflection of that federal distinction, not a Colorado-specific shortcut.

After placed-in-service: the same short paperwork clocks run underneath all three tracks

Once a building actually places in service, CHFA layers identical short deadlines onto all three tracks, worded almost verbatim in Sections 3.D.3 (federal 9 percent), 3.E.3 (state credit), and 3.F.2 (federal 4 percent). "A written notification of the placed-in-service date must be provided to CHFA within 15 days of the actual placed-in-service date," and the full Placed-in-Service Documentation package is due "within 45-days after the first building places in service" — needed so CHFA can record the Land Use Restriction Agreement (LURA) before the close of the first year of the credit period under Section 42(f)(1) (for the federal 9 percent track) or before the close of the placed-in-service year under IRS Notice 88-116 (for the state credit and federal 4 percent tracks alike).

The remaining Final Allocation requirements then carry their own clock and their own stated penalty: "The remaining requirements for the Final Allocation must be received within six months from the date of receipt of the Placed-in-Service documentation. Starting with the seventh month, a $2,000 per month late fee may be assessed until the remaining requirements are received." That fee language is identical across all three tracks. The Final Application itself is due no later than the first business day of November of the year the project places in service, with a minimum 45 business days for CHFA to process it before releasing the IRS Form 8609 (federal tracks) or the Colorado Allocation Certification form (state track).

A request for supplemental (additional) federal credit can only be made at the time of the Carryover or Final Application, and the QAP cuts it off hard: a project is "not eligible for additional federal credits if they have not been awarded a supplemental Allocation by December 31st of the year in which the project is placed in service" — one more deadline stacked onto the same placed-in-service date, on top of the LURA-recording and Final Allocation clocks above.