No deadline exhibit, no restated 10 percent test — Hawaii's post-award clock is federal, and it crosses an ocean — Hawaii

What HHFDC's QAP actually commits to in writing

Section IV, Rights of HHFDC, gives the agency wide discretion over the post-award period: HHFDC "may disapprove or defer consideration of any application or project for any LIHTC reservation or allocation, regardless of ranking," may "hold back a portion of the annual state and federal housing credit ceiling for use during later reservation cycles," may "carry over a portion of the current year's housing credit ceiling for allocation to a project which has not yet been placed in service," and "under certain conditions, issue a forward commitment for up to 25% of the next year's housing credit ceiling." It also restates Section 42's own minimum-allocation-necessary rule directly: HHFDC "may, at the time of issuance of the IRS Form(s) 8609 for the project, decrease the amount of LIHTC allocated to a project based on the actual cost and financing of the project."

Separately, Minimum Threshold #1 names three specific trigger points at which HHFDC may require changes to a project's design — "amenities, fixtures, layout, materials, parking, and sizes" — as a condition of: award, "carryover allocation agreement or Section 42(m) letter," or loan closing. That single sentence is the QAP's only explicit confirmation that HHFDC issues both a Carryover Allocation Agreement (the standard 9% mechanism) and a Section 42(m) letter (the standard determination letter for bond-financed 4% deals) as part of its post-award process — neither document itself is published or described further in the QAP text.

The Good Faith Deposit: the QAP's one hard post-award financial deadline, and it's tied to scoring integrity

Section V states the mechanics plainly: "A good faith deposit of ten percent (10%) of the first year's federal LIHTC reservation is payable at the time the executed binding agreement is submitted to HHFDC. Upon allocation and issuance of the IRS Form 8609, HHFDC will retain eighty percent (80%) of the good faith deposit as an administrative fee. The remainder of the good faith deposit may be refunded to the Applicant." That structure alone — an automatic 80% retention regardless of performance — is a real, quantifiable cost of the award, not a refundable security deposit in the ordinary sense.

The forfeiture trigger reaches further than construction milestones: "Failure by Owner to meet any of the representations made in the scoring criteria at the time of application will result in HHFDC retaining the entire good faith deposit." A developer who won points under, say, Criterion 12 (Length of Affordability Commitment) for a perpetual affordability election, or under Criterion 16 for a Qualified Non-Profit Organization's material participation, and then fails to actually deliver on that representation risks the entire deposit — not merely the forfeiture of those specific scoring points.

What the QAP does not restate: the federal 10 percent test, and any placed-in-service deadline

The phrase "10 percent test" does not appear anywhere in the 2026 QAP's text, and the QAP does not restate IRC § 42(h)(1)(E)'s own requirement — that more than 10% of a project's reasonably expected basis be incurred by the close of the calendar year following the year of a carryover allocation, for that allocation to remain valid. Nor does the QAP publish a placed-in-service deadline, whether as a fixed calendar date or as a stated number of months or years from award, the way some other states' allocation plans do. Both of those timing rules exist only in federal law itself and in the project-specific Carryover Allocation Agreement or Section 42(m) letter that HHFDC issues per project (documents this research did not obtain, since they are not published program materials). Track your own deadlines against your own award documents and IRC § 42 directly — do not expect to find them in the QAP.

Compliance starts at Placed-in-Service, not at award — and the QAP's own correction-period language is internally inconsistent

That last figure is worth reading closely, because the QAP contradicts itself on it. Section VI.J states: "Upon determination by HHFDC of non-compliance with the LIHTC Program, the owner shall be notified and given forty-five (45) days to correct any discovered violations. In accordance with the IRS published guidelines on compliance monitoring, HHFDC will be required to notify the IRS within forty-five (45) days after the end of the thirty-day correction period, whether or not the non-compliance is corrected." The same paragraph names both a forty-five-day correction period and, one sentence later, "the thirty-day correction period" — a real internal inconsistency in HHFDC's own published text, not a transcription error introduced here. Until HHFDC clarifies which figure controls, treat 45 days as the headline number but confirm directly with HHFDC if a correction deadline is tight enough for the discrepancy to matter.

No qualified contract, ever — and a compliance regime that changes shape after year 15

Minimum Threshold #13.c requires that "all owners will waive their right to request a qualified contract" as a condition of the award itself (see Phase 8). That waiver is a permanent feature of the post-award tail, not a one-time application requirement: it means there is no year-14 federal exit ramp available to any Hawaii LIHTC owner, and the enforceable affordability term runs the entire length the Applicant committed to — a minimum of 45 years, or longer if the Applicant elected additional years or perpetuity under Criterion 12 (whose own point table tops out at 6 points despite its heading advertising 7; see Phase 8).

The compliance regime itself changes after the initial 15-year compliance period ends: under the QAP's Additional Use Period rules, HHFDC is no longer required to report non-compliance to the IRS; annual recertification is not required unless an adult is added to the household; unit transfers are allowed without a new income qualification; and, for projects with market-rate units, both the Available Unit Rule and the 140% Rule are suspended entirely. Site audits during this period shift to at least once every five years (rather than every three), starting within three years after the compliance period expires — a materially lighter-touch regime than the initial 15 years, but one that still runs, with no qualified-contract exit, for the balance of whatever extended affordability term the project committed to.

Readiness on an island chain: what the exhibits ask for, and what the QAP doesn't address

The Reference Guide's application exhibits are exactly where a Hawaii developer has to surface real schedule and material-lead-time risk, because the QAP's scoring and cost criteria do not appear to account for it independently. Exhibit 16 requires a Critical Path Method project schedule covering pre-development through occupancy and operation; Exhibit 15 requires current water, sewer, and electricity provider letters confirming capacity for the proposed unit count; and Exhibit 6 requires a Preliminary Engineering Report (new construction) or Capital Needs Assessment (acquisition/rehab) addressing infrastructure adequacy. None of these exhibit instructions, and nothing in Criterion 3 (Reasonableness of Development Costs, ranked on one statewide cost curve with no stated neighbor-island adjustment — see Phase 8) or Criterion 4 (Applicant's Readiness, which penalizes "unresolved development issues" and inadequate budgets), gives any explicit accommodation for the fact that much of Hawaii's construction supply chain — structural steel, elevators, specialty mechanical and electrical equipment, and a great deal of finish material — typically arrives by ocean freight from the mainland, with neighbor-island projects (Hawaii, Maui, and Kauai counties) adding a further interisland barge leg on top of that mainland-to-Oahu voyage.

This is analysis grounded in what the QAP's own text does and does not say, not a claim that HHFDC has published anything specific about shipping or barge schedules — this research found no such HHFDC-published cost or schedule adjustment anywhere in the QAP or Reference Guide. The QAP does, however, bake in one real, quantified acknowledgment that operating costs in Hawaii outpace rents: Minimum Threshold #9.e requires every Operating Proforma to assume a 2.0% Annual Income Inflation Rate against a 3.0% Annual Expense Inflation Rate for the first 15 years or the term of the first mortgage, whichever is greater (reverting to a 2.0%/2.0% split only after that). Build shipping and material-lead-time contingency explicitly into the Exhibit 16 schedule and the Exhibit 7 cost certification, rather than assuming either the QAP's Readiness criterion or its cost-reasonableness criterion accounts for it on your behalf.