Key Stages
There are four key stages in the life of a Tax Credit project.
- Development Period The development period for a project begins when commitment of LIHTCs,
or other Affordable Housing program(s) is made by the state and lasts until the owner places the project in
service.
A building is determined to be "placed in service" when the first unit is ready for occupancy (certified for
occupancy). In general, the owner must place the project in service before the end of the 2nd calendar year in
which the project receives its LIHTC or other Affordable Housing program commitment.
- Lease-Up Period The lease-up period starts once a project has been placed in service and
lasts until the owner begins to claim the project's Tax Credits. Owners can start claiming a project's Tax
Credits at the end of the following tax year the project was placed in service.
During this period, owner/managers need to qualify all of the units they will count as set-aside.
- Compliance Period The compliance period begins with the first tax year in which the owner
claims Tax Credits for the project, and lasts for 15 consecutive years.
- Extended Use Period Once the 15-year compliance period ends, projects enter the extended
use period. Owners/managers of these projects are required to maintain the property's low-income occupancy
for an additional 15 years beyond the end of the compliance period - the remaining life of the extended use
agreement for the project (in some cases longer, for example most of our communities require a 50 year
extended use period).