"We got the CQL — are we allocated yet, and which deadline is actually load-bearing?"
The reservation fee lands before the clock even starts
OHFA's Reservation Fee — 6% of the annual LIHTC reservation — is due at Final Application, not at Carryover Allocation, financial closing, or the 8609 request. That means a development team owes a substantial cash obligation while the deal is still working through threshold and underwriting review, well before there's a Carryover Allocation Agreement, an HDAP closing, or construction financing in place. Any readiness-timeline discussion for an OHFA deal has to account for that fee as a near-term capital call, not a closing-table line item.
The CQL issued after Proposal Application reservation is explicitly not a funding commitment. The sequence that actually creates enforceable rights runs Final Application → full threshold/underwriting/architectural clearance → Board approval → Carryover Allocation Agreement (COA) — and it's the COA, not the CQL or even the Board vote, that starts the federal statutory clocks.
Carryover Allocation Agreement, then the 10% Test
For same-year reservations (a 2026 application awarded 2026 LIHTC), OHFA executes the Carryover Allocation Agreement on the date listed in that year's Program Calendar — December 4, 2026, for the 2026 cycle — which gives the development team two additional calendar years to place the project in service. Forward-allocated credits (a 2026 application awarded 2027 LIHTC) instead receive their Carryover Allocation Agreement the following July.
The 10% Test itself follows the federal standard, not an OHFA-specific shortcut: applicants must demonstrate that at least 10% of the project's reasonably expected basis has been expended by the close of the second calendar year following the calendar year the allocation was made, per 26 U.S.C. §42(h)(1)(E)(ii) and 26 C.F.R. §1.42-6. Once OHFA verifies the 10% Test has been met, the project is handed off to a Project Administration Analyst who guides the team through construction, the Form 8609 request, and closeout — and the 8609 request itself has to be filed within 365 days of the last building being placed in service, or the project risks being flagged as out of Good Standing.
Two different "Funding Agreements" — don't conflate them
OHFA's fee schedule lists a $1,000-per-request Amendment fee and a $1,000-per-extension Extension fee tied to "a funding agreement." That instrument is the HDAP gap-financing Funding Agreement — the loan document tied to Housing Credit Gap Financing, Bond Gap Financing, or an HDL award — not the LIHTC Carryover Allocation Agreement itself. The QAP's Good Standing Policy treats violating the terms of an HDAP Funding Agreement as its own separate compliance failure, distinct from missing an LIHTC statutory deadline, which confirms these are two different instruments running on two different clocks.
If the deal includes HDAP or HDL financing, all required closing due diligence has to reach OHFA no later than 30 days before the requested loan closing date, or OHFA won't commence the closing process — a real risk to any construction-start assumption baked into the schedule. Separately, within 30 days of LIHTC equity closing, the team has to submit executed copies of the amended and restated partnership/operating agreement, LIHTC equity documents, loan documents, final title policy, and an updated Phase I environmental report to equitydocs@ohiohome.org.
What happens when a deadline is actually missed
| 10% Test miss (Credit Refresh/Exchange) | Placed-in-service miss (PIS Relief) | |
|---|---|---|
| Trigger | Circumstances outside the applicant's control, unforeseeable before the Final Application date | Same standard, unforeseeable before Proposal or Final Application |
| Progress required | Demonstrated progress toward closing/construction at time of request | Roughly 75% completion of construction/rehabilitation |
| Required steps | Formal request; agree to return the allocation before the 10% Test/PIS deadline | Formal request; agree to return the allocation before the PIS deadline |
| New reservation fee | 1% of the allocation amount | 10% of the allocation amount |
| Result | New allocation extends 10% Test and PIS deadlines up to 1 year | New allocation extends PIS deadline up to 1 year |
Outside those two paths, a team whose site falls through because of an unrelated third party (a failed HUD, USDA Rural Development, or local-government approval, for example) can pursue a Future Credit Ceiling Special Allocation — but only after the original allocation has been returned or revoked, only with a final legal judgment, settlement, or equivalent documentation showing the obstacle is resolved, and only by reapplying within two calendar years under that future year's QAP. The original reservation fee is not refunded, and OHFA has no affirmative obligation to grant the request.
Where this goes wrong
- Budgeting the 6% Reservation Fee as a closing-table cost — it's due at Final Application, well before Carryover Allocation or construction closing.
- Confusing the LIHTC Carryover Allocation Agreement with the HDAP "Funding Agreement" — the $1,000 amendment/extension fees in OHFA's fee schedule apply to the HDAP loan document, not the tax credit allocation instrument.
- Assuming the 10% Test deadline is a flat "12 months from Carryover" rule — Ohio follows the federal standard of the close of the second calendar year after the allocation year, which can run close to two years depending on when the COA issues.
- Treating the 10% Test relief and Placed-in-Service relief as interchangeable — they require different progress showings (any demonstrated progress vs. roughly 75% construction completion) and carry very different reservation-fee penalties (1% vs. 10% of the allocation).
- Missing the 30-day-before-closing due diligence deadline for HDAP/HDL funds — OHFA will not start the closing process without it, which can cascade into missing the construction-start date the pro forma assumes.
- Forgetting the 365-day clock to request Form 8609 after the last building is placed in service — missing it is a standalone Good Standing violation, independent of the project's actual compliance performance.
- Not reserving for the Compliance Monitoring Fee ($2,550/unit on a 9% deal) due with the 8609 request — a five- or six-figure fee that lands at the very end of the process, not spread across construction.
- Assuming a returned or revoked allocation can simply be re-requested — outside the two named relief paths, the only route back is the Future Credit Ceiling Special Allocation, which requires an unrelated third-party cause, legal resolution, reapplication within two years, and a brand-new, non-refunded reservation fee.
- HUD
- LIHTC
- State QAPs
- IRS § 42
- Housing Finance Agencies