Site control and due diligence — Connecticut

The QAP's Basic Threshold Requirements are the actual site-control and due-diligence checklist

Rather than spreading site-readiness items across a scoring rubric the way its own competitive point categories work, CHFA folds due diligence into twenty numbered "Basic Threshold Requirements" in Section III.A of the QAP, evaluated as a pass/fail determination -- the Chief Executive Officer/Executive Director has discretion to deem an Application a "Completed Application" only upon "documented evidence demonstrating the Proposed Development's compliance" with all twenty. Critically, this is not a 9%-only list: Section IV of the QAP extends full Basic Threshold Requirement compliance to every 4% Credit / tax-exempt-bond-financed deal as well, so a bond deal cannot skip any of the items below on the theory that only competitive 9% Applications face them.

Site control itself has a documented floor: an active option, not a handshake

The Department of Housing's own Development Engagement Process instructions state the minimum plainly: "Prospective property owners must, at a minimum, have an active option on the proposed development property... A speculative interest only in a project is not a sufficient relationship to participate." DOH's DEP submission form accepts (but does not require at that early stage) a set of supporting exhibits that map directly onto this phase's work: a Project Narrative, a CEPA Intake form, a Site Control document showing evidence of status, a Site Plan (approved or proposed to the town), a Unit Matrix, Sources and Uses, a Procurement Plan, and Zoning Approval documentation with any conditions noted. None of these are mandatory to submit a DEP response, but DOH is explicit that fuller documentation earns "best consideration of the project's readiness to proceed."

For an occupied acquisition -- almost always a Preservation Classification deal -- Connecticut layers its own relocation statute on top of federal URA obligations that may or may not apply depending on funding sources: the Connecticut Uniform Relocation Assistance Act, Conn. Gen. Stat. § 8-266. DOH requires sponsors contemplating DOH funding for an occupied property to "prepare to comply" with the Act and to be able to provide an outline of the relocation plan as early as the DEP submission -- not merely before closing, which is where relocation planning often lands in other states' processes.

Market studies and appraisals run on CHFA's own Guidelines, not a generic USPAP checklist

CHFA's Appraisal & Market Study Guidelines (the version confirmed in this research is dated August 2016; confirm directly with CHFA whether a newer edition has since superseded it, since the QAP references "the Authority's Appraisal & Market Study Guideline" as a living document) require an acceptable appraisal to be a Self-Contained Comprehensive Appraisal Report, prepared under the Uniform Standards of Professional Appraisal Practice (USPAP) by a Certified General Real Estate Appraiser licensed in Connecticut -- and, whenever CHFA financing or programmatic funding is involved, drawn from CHFA's own list of pre-qualified appraisers. The report must include an as-is value with a separately supported land value, an opinion of highest and best use, a three-year sales history, a final opinion of market value, and a final opinion of investment value using a discounted cash flow approach.

For a proposal seeking a LIHTC allocation only (no CHFA mortgage financing), CHFA may accept the applicant's own appraisal if it meets CHFA's Supplementary Criteria, uses the as-is standard with a separate land value, and is less than 12 months old at the time of the carryover allocation agreement -- otherwise CHFA can require an appraiser's update letter (if there have been no material changes) or an entirely new appraisal, at the applicant's cost.

A market study is required for essentially every development receiving a LIHTC allocation, with a narrow carve-out for not-for-profit sponsors with 15 or fewer units, or developments with project-based rental assistance covering the entire property, where CHFA may accept the market analysis embedded in the appraisal itself or an alternative source instead. The accepted study format follows the Model Content Standards for Rental Housing Market Studies published by the National Council of Housing Market Analysts (NCHMA), layered under CHFA's own Supplementary Criteria, and must name CHFA specifically as an intended user of the report -- not just the party that ordered it. Applicants pay for the study in advance, and that payment is explicitly non-refundable.

Rehab deals carry their own due-diligence layer: a capital needs assessment and a hard hard-cost floor

Preservation Classification deals -- and any 4% Credit deal, regardless of classification -- must clear Basic Threshold Requirement #10: a minimum of $35,000 in construction hard costs per unit, and a capital needs assessment of the structure to be rehabilitated, "in form and content consistent with the Construction Standards." The CNA is not a due-diligence formality that gets filed and forgotten -- it is the primary evidence behind the QAP's single highest Preservation priority ranking factor, which favors "Proposed Developments demonstrating the largest scope of rehabilitation work on an existing and occupied affordable rental housing development, as demonstrated by a capital needs assessment and by Authority review."

This research did not independently confirm the specific technical protocol (for example, whether CHFA's Construction Standards require an ASTM E2018-style scope, a minimum reserve-funding period, or a named third-party credential) that CHFA's current "2027 and 2028 Multifamily Design, Construction and Sustainability Standards" document requires for a CNA in full detail -- that document should be pulled and reviewed directly before scoping a CNA engagement, rather than assuming a generic industry-standard scope will satisfy CHFA's own requirement.

Utility allowance methodology feeds straight into the rent test

CHFA's own Low-Income Housing Tax Credit Program Glossary of Terms (effective 11/1/2025) defines a utility allowance as an amount "established and published in a utility allowance schedule either by HUD, DOH or a Public Housing Authority, or a study from the utility company that stipulates the rates based on typical usage." The inclusion of DOH -- Connecticut's own Department of Housing -- as a named schedule-publishing source alongside the more familiar HUD and PHA options is specific to how CHFA has written the definition; confirm with CHFA's compliance staff which of these sources is acceptable for a specific property type before defaulting to a PHA schedule out of habit.

Mechanically, gross rent equals resident-paid rent plus the applicable utility allowance, and gross rent for units serving a given household size cannot exceed CHFA's published maximum affordable gross rent for that bedroom count (see Phase 1 for how those limits are derived from HUD's MTSP figures). Utilities covered include heat, electricity, water, sewer, and similar items; telephone, cable, and internet are excluded unless a service is not optional for the resident. The utility allowance amount is subtracted from the maximum gross rent to arrive at the maximum net tenant-paid rent that can actually be charged.

One gap worth flagging explicitly rather than papering over: this research did not find a standalone, current "CHFA Utility Allowance Policy" document published on chfa.org, comparable to documents some other states' housing finance agencies publish under a similar name. A document with that exact title turned up during this research, but it was published by Colorado's Housing and Finance Authority (also "CHFA"), not Connecticut's -- a direct illustration of the acronym-collision risk flagged in Phase 1. Confirm with CHFA's Asset Management or Compliance division whether Connecticut has since issued a dedicated utility-allowance policy beyond the Glossary definition and the QAP's own gross-rent language before relying on any Colorado-sourced document for a Connecticut deal.