"We just got our Reservation Certificate — what's South Carolina's version of the federal 10 percent test, when does our Carryover Allocation actually have to be signed, and what actually gets an award pulled back?"
Reservation to Carryover: a project-specific deadline, not a QAP-wide one
"Any reservation or carryover allocation obtained on the basis of false or misleading information shall be void" — Appendix E opens on that note. SC Housing mails a Reservation Certificate to every funded development once the competitive scoring process is complete; the owner must "execute and return the Reservation Certificate and pay all fees then due within ten (10) business days of receipt," and only once every award in the cycle has executed and returned its certificate does SC Housing release the public LIHTC Awards List. The Manual is explicit that "[i]ssuance of a Reservation Certificate does not guarantee that the development will receive an allocation of LIHTC in the amount stated, or at all," and any violation of the certificate's own terms — or an untimely submission of the documentation it calls for — can cancel it outright.
A Carryover Allocation is not automatic. "Owners seeking a Placed-In-Service (PIS) allocation the year in which the reservation was made must submit a PIS application on or before the second Monday in December" of that same year — no carryover is needed. Any development that will place in service after December 31 of the reservation year must instead "submit an Application for a Carryover Allocation to the Authority no later than the date specified in the Reservation Certificate" — a project-specific date set individually for each award rather than a single fixed date published anywhere in the QAP itself. Once filed, SC Housing sends a Carryover Agreement, which the owner must return, executed, by the date the Agreement itself states.
The 10% test: South Carolina's internal deadline runs a month ahead of the federal floor
The federal statute (IRC § 42(h)(1)(E)(ii)) requires that 10% of a project's reasonably expected basis be incurred within one year of the Carryover Allocation. Appendix E sets a stricter internal deadline: "The Authority requires owners meet the Verification of Ten Percent Expenditure (10% Test) no later than eleven (11) months after the Carryover Allocation date." An extension is available only "under circumstances beyond the Owner's ability to control," and even then "the Authority may not grant an extension longer than twelve (12) months after the Carryover Allocation date" — meaning the maximum available relief brings a developer only back to the federal statutory floor, not beyond it. The 10% Test application itself is then due "within three (3) weeks after the 10% Test deadline," and missing documents follow an escalating path: free correction before the application deadline, a missing-document fee after it, and forfeiture of the entire LIHTC allocation if the documents aren't cured within 7 business days of notification.
Progress deadlines: 12 months, 15 months, and four inspections — with no blanket extensions
| Milestone | Deadline from Reservation Date | Required showing |
|---|---|---|
| 12-month package | 12 months | Final certified plans/specs; recorded deed or land lease; site-specific geotechnical report (≤1 year old); executed construction contract; recorded final construction mortgage; recorded Restrictive Covenants; executed syndication commitment |
| 15-month construction start | 15 months | New construction: footings or monolithic slab in place, photo-documented and certified by the architect/engineer. Rehab: actual rehabilitation of units begun. Work must then be "continuous and progressive" to completion |
| Bond ceiling allocations | Per the separately-posted TEB Schedule | Same document package as the 12-month 9% list |
"The Authority will only accept and grant extensions for individual categories, not an overall blanket extension for all categories" — each extension request needs its own $1,000 fee, filed at least a week before that specific deadline. Owners also file a quarterly Exhibit L Progress Report (due April 7, July 7, October 7, and January 7) and undergo four construction inspections at 25%, 50%, 75%, and 100% completion; the 100% inspection must be requested within 60 days of the Certificate of Occupancy on the last building completed. TEB developments failing to close within the TEB Schedule's own timeline "may not be eligible to apply in any Authority funding cycles the following year."
Placed-in-Service: the 9-month window, cost certification, and when 8609s actually get mailed
The Placed-in-Service (PIS) application and its supporting Exhibit A checklist are due "within nine (9) months of the last building placing in service," but a development expecting to claim credits in the current tax year must instead file "by second Monday in December" regardless of that 9-month window, with a late window running through the last business day of December on payment of a late fee. The package must include Exhibit J-2's actual-cost accounting, a CPA audit and opinion letter under GAAP/GAAS, and a certification that all costs are reported and ineligible costs excluded — and "[o]nce submitted Owners may not modify or resubmit a certification. All underwriting decisions based on the submitted certification are final." SC Housing can independently reduce the eligible basis (and the LIHTC allocation with it) if its own review or the audit finds actual construction costs below what was budgeted. Form 8609s are executed and mailed only "after receipt of a complete PIS application," and — for a multi-building development — not until the last building has itself placed in service. For State Credit deals, Appendix C3 ties SC Housing's own Eligibility Statement to the same event: it issues "along with the Form(s) 8609" once the project is confirmed in compliance after placement in service.
What actually revokes, suspends, or debars — and the fees layered on top
| Consequence | Triggering events |
|---|---|
| 3-year suspension from all Authority programs | Missing the 10% Test or PIS deadline; letting a carryforward allocation expire by missing a closing deadline; GP/managing-member removal (absent death, bankruptcy, or business cessation); a false or inaccurate certification; noncompliance with TCAP/Exchange fund rules; interfering with another applicant's LIHTC application |
| Permanent debarment | False or misleading information to the Authority or a Hearing Officer (regardless of when discovered); a partnership/developer agreement structured to circumvent Authority requirements; for nonprofit-sponsored deals, a breach of continuous material participation (reaching the nonprofit and all its officers/directors) |
| Application disqualification (current/next cycle) | Improper Board contact about scoring, QAP interpretation, or awards; debarment from any federal/state program; fraud on the IRS or another housing program; a foreclosure, deed-in-lieu, property abandonment, restrictive-covenant breach, GP removal, missed bond-closing deadline, or credit return on a team member's other property (each individually waivable, but only if the waiver was requested no later than January 31, 2026); a 10-year look-back for uncured 8823s, mortgage arrearage, HUD 2530 flags, deferred maintenance, unpaid compliance fees, or unreported ownership/management changes |
Material Changes Prohibited is its own independent ground for losing an allocation at any of three checkpoints: "[i]f, upon the submission of the Carryover Allocation Documents, the 10% Test application or the PIS application, the Authority determines that the development is not substantially the same as described in the original Tax Credit Application, the development may not receive an allocation of LIHTCs." Ownership is similarly locked down after award: "[n]either reservations nor carryovers are transferable without the prior written consent of the Authority," and that reaches indirect GP transfers through a special-limited-partner structure engineered to exit the original GP. A one-time escape hatch exists for a prior-cycle 9% award: an owner may return those credits and "receive an allocation from the current tax credit cycle equal to or less than the amount of the original tax credits awarded," but only once per development, only in the current calendar year, and doing so bars that development from the very next 9% application round.
| Fee | 9% LIHTC | TEB/4% LIHTC |
|---|---|---|
| Reservation Fee (due 10 business days after award notification) | 10% of the LIHTC award | n/a |
| State Tax Credit Fee (same due date) | 10% of STC award | 10% of STC award |
| Plan Review/Construction Inspection Fee | $6,600 | $7,000 |
| Extension Fee (per request) | $1,000 | $1,000 |
| Late Delivery Fee | $1,000, reassessed every 5 business days | $1,000, reassessed every 5 business days |
| Re-underwriting Fee | $2,000 | $2,000 |
| Recycle Fee | $10,000 | n/a |
| Reprocessing of Form 8609 | $100/form | $100/form |
| Compliance Monitoring Fee | $80/unit/year, +$50/unit/year for average-income set-aside projects | $80/unit/year, +$50/unit/year for average-income projects (also called the Bond Admin. Fee) |
| Transfer of Ownership / Transfer of Investor LP interest | $1,500 / $500 | $1,500 / $500 |
Compliance monitoring fees are due at PIS submission and by February 1 of each subsequent year "through extended use period to include the decontrol period," with a 10% late penalty (minimum $50) after 30 days past due. The QAP does not itself restate the federal 15-year compliance-period/15-year extended-use structure (IRC § 42(h)(6)) in the sections reviewed for this research — treat the standard federal minimums as governing unless SC Housing states an SC-specific figure elsewhere.
Where this goes wrong
- Assuming the federal 12-month floor for the 10% test is SC Housing's own deadline. Appendix E, Section II sets an internal deadline of 11 months after the Carryover Allocation date — a full month tighter — and caps any Authority-granted extension at 12 months after Carryover, meaning the maximum relief only reaches the federal floor, never beyond it.
- Looking for the Carryover Allocation Application deadline somewhere in the QAP itself. It isn't published QAP-wide — Appendix E states it is "the date specified in the Reservation Certificate," set individually for each award.
- Assuming one extension request covers every progress deadline. The Authority "will only accept and grant extensions for individual categories, not an overall blanket extension for all categories," each needing its own $1,000 fee filed at least a week ahead of that specific deadline.
- Assuming the Placed-in-Service deadline is always "9 months after placed-in-service." A development expecting to claim credits in the current tax year must instead file by the second Monday in December regardless of the 9-month window, with a late-fee path open only through the last business day of December.
- Treating a returned/recycled 9% award as a free second attempt at a cycle. An owner may recycle only once per development, only in the current calendar year, only for an amount at or below the original award, and doing so blocks that development from applying in the very next 9% round.
- Missing the fixed, non-rolling waiver deadline for otherwise-disqualifying events. Several Section VII disqualification triggers (foreclosure/deed-in-lieu, restrictive-covenant breach, GP removal, missed bond closing, credit return) are individually waivable, but only where the waiver was requested no later than January 31, 2026 — a fixed calendar date, not a window measured from when the event occurred.
- Assuming South Carolina states its own extended-use/decontrol period length. Appendix E references compliance fees running "through extended use period to include the decontrol period" without restating a specific number of years in the sections reviewed here; don't assume an SC-specific figure exists beyond the federal 15-year compliance/15-year extended-use structure in IRC § 42(h)(6) without confirming directly with SC Housing.
- Assuming a change in scope discovered at Carryover, the 10% Test, or PIS is a minor issue if the fundamentals are unchanged. The QAP's own "Material Changes Prohibited" standard is whether the Authority finds the development "substantially the same as described in the original Tax Credit Application" at any of those three checkpoints — not whether the change is minor in the developer's own judgment.
- HUD
- LIHTC
- State QAPs
- IRS § 42
- Housing Finance Agencies