Year 15 Properties
Click to view the Tax Credit Year-15 Properties For Sale (7k PDF)
Section 42(h)(6) of the Internal Revenue Code requires an extended low-income housing commitment of at least 15 years in addition to the compliance period. Such requirement is applicable to all properties awarded housing credits starting in 1990. The exact term of the extended use period for each tax credit property can be found in its Deed of Easement and Restrictive Covenant for Extended Low-Income Occupancy.
New Jersey Housing and Mortgage Finance Agency has established monitoring procedures during the extended use period (19k PDF). Unless specifically addressed within these procedures, the compliance requirements during the extended use period shall remain the same as those requirements established by HMFA during the initial compliance period (see the Compliance Manual (28MB PDF)).
Section 42(h)(6)(E)(i)(II) of the Internal Revenue Code provides a procedure by which an Owner may request termination of the extended use period (“request for termination”). This section provides HMFA a one-year timeframe within which to present a buyer willing to a) maintain the property as low-income and b) purchase the property for a qualified contract (“QC”) amount. In the event HMFA is unable to present a buyer, the extended use period is terminated.
A request for termination may be submitted to HMFA after the last day of the fourteenth year of the compliance period of the last building placed in service. Properties with uncorrected noncompliance and/or outstanding monitoring fees shall not be eligible to submit a request for termination until such items are corrected. A request for termination shall include the following:
The one-year timeframe imposed by Section 42(h)(6)(I) of the Internal Revenue Code shall not begin until all items referenced above have been submitted to the satisfaction of HMFA. Owners submitting a qualified contract must have either a tracking number or delivery confirmation receipt for their package or it will not be accepted.
HMFA reserves the right to request additional items as needed. The one-year timeframe shall be suspended for any period during which HMFA is waiting for additional documentation from the Owner which HMFA determines to be necessary to determine the QC price.
In the event HMFA calculates a QC price different from the QC price calculated by the Owner, the one year timeframe shall be suspended from the time HMFA presents its QC price to the Owner until such time as the Owner and HMFA agree to a QC price with a dated and signed memorandum.
Under Section 42(h)(6)(E)(i)(II) of the Internal Revenue Code, HMFA’s only obligation is to “present” to the Owner a bona fide contract signed by a prospective buyer to acquire the Owner’s project for the QC amount (the “Contract”). When HMFA presents the Contract to the Owner, regardless of when or if the Contract is fulfilled, the possibility of terminating the extended use period is removed forever and the project remains bound to the provisions in, and may not terminate, the extended use agreement. Whether or not the Owner actually executes the contract and closes the transaction is a separate, legally unrelated question.
HMFA may add to or amend these procedures at any time. Before submitting a request for termination, please visit the website to obtain the most current information.
Section 42(h)(6) of the Internal Revenue Code requires an extended low-income housing commitment of at least 15 years in addition to the compliance period. Such requirement is applicable to all properties awarded housing credits starting in 1990. The exact term of the extended use period for each tax credit property can be found in its Deed of Easement and Restrictive Covenant for Extended Low-Income Occupancy.
New Jersey Housing and Mortgage Finance Agency has established monitoring procedures during the extended use period (19k PDF). Unless specifically addressed within these procedures, the compliance requirements during the extended use period shall remain the same as those requirements established by HMFA during the initial compliance period (see the Compliance Manual (28MB PDF)).
Section 42(h)(6)(E)(i)(II) of the Internal Revenue Code provides a procedure by which an Owner may request termination of the extended use period (“request for termination”). This section provides HMFA a one-year timeframe within which to present a buyer willing to a) maintain the property as low-income and b) purchase the property for a qualified contract (“QC”) amount. In the event HMFA is unable to present a buyer, the extended use period is terminated.
A request for termination may be submitted to HMFA after the last day of the fourteenth year of the compliance period of the last building placed in service. Properties with uncorrected noncompliance and/or outstanding monitoring fees shall not be eligible to submit a request for termination until such items are corrected. A request for termination shall include the following:
- $2,500 non-refundable application fee;
- first year 8609s showing Part II completed (if not previously submitted);
- copies of all uncorrected 8823s (if any);
- Qualified contract (“QC”) amount calculated in accordance with Section 42(h)(6)(F) of the Internal Revenue Code, certified by an independent certified public accountant;
- Back-up documentation used in determining the QC amount, including, but not limited to:
- Annual partnership federal tax returns for all 15 years of operation since the start of the credit period (“all years”);
- Audited annual project financial statements for all years;
- loan documents for all secured debt during the compliance period; and
- partnership agreement (original, current and all interim amendments);
- $30,000 deposit for anticipated third–party costs. Such third-party costs may include, but are not limited to, the following:
- an accountant to confirm the reasonableness of the qualified contract amount;
- a physical needs assessment for the entire project;
- an appraisal for the entire project;
- a market study for the entire project; and
- a Phase I environmental assessment (and a Phase II, if necessary).
The one-year timeframe imposed by Section 42(h)(6)(I) of the Internal Revenue Code shall not begin until all items referenced above have been submitted to the satisfaction of HMFA. Owners submitting a qualified contract must have either a tracking number or delivery confirmation receipt for their package or it will not be accepted.
HMFA reserves the right to request additional items as needed. The one-year timeframe shall be suspended for any period during which HMFA is waiting for additional documentation from the Owner which HMFA determines to be necessary to determine the QC price.
In the event HMFA calculates a QC price different from the QC price calculated by the Owner, the one year timeframe shall be suspended from the time HMFA presents its QC price to the Owner until such time as the Owner and HMFA agree to a QC price with a dated and signed memorandum.
Under Section 42(h)(6)(E)(i)(II) of the Internal Revenue Code, HMFA’s only obligation is to “present” to the Owner a bona fide contract signed by a prospective buyer to acquire the Owner’s project for the QC amount (the “Contract”). When HMFA presents the Contract to the Owner, regardless of when or if the Contract is fulfilled, the possibility of terminating the extended use period is removed forever and the project remains bound to the provisions in, and may not terminate, the extended use agreement. Whether or not the Owner actually executes the contract and closes the transaction is a separate, legally unrelated question.
HMFA may add to or amend these procedures at any time. Before submitting a request for termination, please visit the website to obtain the most current information.
