Post-award readiness clock — Delaware

The fork at award: placed in service by November 1, or a Carryover by year-end

The QAP's Placed in Service Requirements state the rule directly: "All developments receiving a Preliminary Reservation of credits must be placed in service either by November 1st of the year in which they receive Reservation or must receive a Carryover Allocation of credit prior to the end of the year in which they have received the Preliminary Reservation." For any development that takes the Carryover path -- which is the realistic path for nearly every new construction or substantial rehabilitation deal -- the next deadline is federal: the development must have "incurred more than 10% of reasonably anticipated development costs, no more than twelve (12) months after the issuance of the Carryover Allocation." DSHA's own text names this requirement "the 10% Test" and requires "written certification from a certified public accountant that they have incurred expenditures for more than 10% of the reasonably-expected basis" by the close of the calendar year of allocation or 12 months from the Carryover date, whichever applies. Developments that miss this procedure are subject to credit allocation revocation, and DSHA's separate Cost Certification and Draw Guide governs the mechanics in more detail. Independent of the 10% Test's own timing, every project -- Carryover or not -- must be placed in service by the end of the second calendar year following the year of allocation, matching the federal two-year outer limit.

The 60-day kickoff meeting and what has to be true before DSHA will execute Carryover

DSHA schedules a kickoff meeting within 60 days of the preliminary award notice, and attendance is mandatory for four specific Development Team roles: the Applicant, the Development Consultant, the Architect, and the General Contractor -- a narrower, named list than "the development team" generally, meaning a missing General Contractor or Architect at this meeting is a real compliance gap, not a formality. Before DSHA will execute the Carryover Agreement itself, the QAP requires: applicable land use approvals or "satisfactory progress" toward them; evidence that the equity investor has been finally selected (not merely a term sheet or short list); the Architect's submission of 80% Plans and Specifications conforming to DSHA's Minimum Design and Construction Standards; a Memorandum of Agreement with the Delaware Transit Corporation; and, where applicable, USDA transfer approval.

The preliminary reservation award itself carries an explicit caveat baked into its own definition: it "is subject to amendment, change, cancelation, or modification based on DSHA's underwriting, satisfaction of conditions to carryover, and the timely finalization of financing commitments." A Preliminary Reservation is a strong signal, not a locked allocation.

The Declaration of Restrictive Covenants, and how broadly DSHA can cancel an allocation

Every award requires "a minimum thirty (30)-year low-income housing commitment," memorialized in a Declaration of Restrictive Covenants that must be "signed, recorded and returned to DSHA before the carryover allocation is awarded or the development is placed in service" -- whichever comes first, on the same logic as the November 1/year-end fork above. DSHA's cancellation authority is written broadly, not narrowly: "Should any of the requirements listed in this document not be met or the characteristics of the development be changed or modified at any time after receiving the Carryover Allocation, DSHA shall have the right to cancel the credit allocation and the owner shall acknowledge the return in full of the credit allocation to DSHA." That is a standing, ongoing condition -- not a single deadline check -- and it runs alongside DSHA's express disclaimer that it "does not represent or warranty that the amount of credit allocated is sufficient to make a development feasible or viable."

The 2026 round's actual dates

Final closing, cost certification, and an 8609 process that can take 60 days on its own

The final credit allocation happens only once the development is placed in service and DSHA has received cost certification from both the owner/mortgagor and the general contractor, following DSHA's own Cost Certification and Draw Guide and covering all sources and uses of funds including syndication fees. To actually receive IRS Form(s) 8609, DSHA requires the final approved cost certification; proof of the placed-in-service date (a Certificate of Occupancy for each building, or substantial-completion documentation where a local jurisdiction does not issue COs); documentation of all permanent DSHA loan closing requirements, if applicable; registration on Delaware's housing search website; and confirmation that all tenant data has been uploaded to DSHA's database. DSHA states plainly that "the review process may take as long as sixty (60) days to complete," and for any project carrying DSHA financing, "IRS Form(s) 8609 will not be issued until permanent closing" -- meaning a DSHA-financed deal's 8609 timeline is gated by loan closing, not just by the cost-certification review itself.

When a deal cannot hit its date: Forward Reservation, not automatic grace

If circumstances beyond an applicant's control threaten the placed-in-service date, the applicant must notify DSHA "within thirty (30) days of such applicant's knowledge of the delay." The actual request for a return-and-Forward-Reservation of credits, though, is only accepted in a fixed annual window: "between September 16 and November 1 of the applicable year," submitted to DSHA's Director of Housing Development by email or certified mail -- "Requests will not be accepted outside the stated window." The request must name the development and applicant, state the statutory placed-in-service deadline, and document the due diligence performed, the specific cause of delay, and the mitigation steps attempted.

If DSHA agrees the delay is outside the applicant's control, it may allow the credits to be returned without penalty and grant a Forward Reservation of the same dollar amount from a future year -- but only up to two times per development, and each use carries a $15,000 fee that is "non-refundable, non-basis eligible," due before the Forward Reservation is executed. Critically, a project that returns and reapplies "must comply with the current QAP in place at the time of re-application" -- not the QAP its original award was scored under -- and DSHA may require revision of exhibits at its discretion. A Forward Reservation is real re-underwriting risk, not a simple deadline extension: scoring categories, dollar caps, and threshold items can all have changed by the time a returned project comes back.

Appeals, and the fees and cash constraints that follow the award

An applicant who disagrees with DSHA's ranking decision has 15 days from the ranking announcement to submit a written request for reconsideration to the DSHA Director, with "a comprehensive discussion of the basis for the reconsideration" -- the Director's decision "shall constitute final agency action," and if no reconsideration request is filed, the original ranking announcement date itself becomes the date of final agency action.

Cash available to actually repay deferred developer fee or deferred DSHA debt after stabilization is itself capped: DSHA's Underwriting Guidelines limit annual distributions on 9% DSHA-financed deals to 1% of initial equity investment (with accumulated distributions capped at five years' worth), and on 4% DSHA-financed deals to 2% of initial equity investment up to $200,000 annually for up to 10 years -- or until the required cash-flow fee described in Phase 7 is repaid, whichever is shorter -- after which distributions split 50/50 between the development and DSHA until deferred debt is satisfied. Non-DSHA-financed developments are not subject to these caps and follow a standard partnership waterfall instead. A development's Phase 7 deferred-fee plan and its Phase 9 distribution caps are the same math viewed from two different points in the deal's life -- a fee deferral that assumed faster repayment than these caps actually allow will not resolve itself simply by reaching stabilization.