LIHTC Compliance

Upon receipt of a Development Owner's request to exercise its option year (Notification Letter and Qualified Contract Price Form and Worksheets), NIFA staff will proceed as follows:

1. Review the Development Owner’s packet of due diligence materials and agree on an appropriate Qualified Contract Price (QCP). The one year period begins once this step is complete.
2. Post the Development information on NIFA’s website.
3. Forward information with respect to the Development to current owners of tax credit developments and to local, state and nation-wide non-profit and for profit owners who have notified NIFA that they have an interest in preserving housing; and to tax credit investors and others who have asked for such information.
4. Act as a facilitator for requests of prospective purchasers by referring them to the appropriate contact persons for the Development Owner.
5. NIFA may, in its sole discretion, on its own behalf or on behalf of another party, elect to submit a Qualified Contract to purchase the property.
6. NIFA may, at any time, change these procedures, or act or refuse to act on a procedure, without notice or obligation to any Development Owner.
7. NIFA’s actions or failure to act on these procedures does not constitute a waiver of the requirements of Section 42.

In order for NIFA to assist in making information available to potential purchasers of affordable housing properties, the Development Owner must cooperate in such effort and is responsible for providing certain information. At a minimum, the Development Owner must provide the following to NIFA:

1. A fully completed "Calculation of Qualified Contract Price" form, including Worksheets A - E. This form must be completed or approved (in writing), by a third party accountant or similar professional.
2. A thorough narrative description of the Development, including all amenities suitable for familiarizing prospective purchasers with the Development. This narrative must include, at a minimum, the following:

   • number of buildings

   • number of units

   • unit mix

   • rent amounts per unit

   • utility allowance

   • description of all improvements

   • description of all services

   • description of current staff/management

3. A description of all income, rents and other program restrictions, if any, applicable to the operation of the Development.
4. A detailed set of digital photographs of the Development, including the interior and exterior of representative apartment units and buildings, and the Development's grounds.
5. A copy of the most recent 12 months of operating statements for the Development which fairly sets forth the Development's operating expenses, debt service, gross receipts, net cash flow and debt service coverage ratio.
6. A current and complete rent roll for the entire Development.
7. If any portion of the land or improvements are leased, copies of the leases.
8. A copy of a capital needs assessment, prepared by a licensed engineer or architect within the last six (6) months, that meets the requirements set forth in the Exhibits of NIFA's current Exhibit Examples. Such assessment must identify the costs associated with the recommended improvements.

Qualified Contract Notification Letter
Calculation of Qualified Contract Price Form and Worksheets
Projects Eligible for a Qualified Contract Request

Development Owner Responsibilities

In addition to the above, the Development Owner must agree to the following requirements:

1. List the Development for sale with a qualified sales agent or attorney who is qualified to sell affordable multifamily housing developments.
2. Agree to allow NIFA to post summary data about the Development on NIFA’s website.
3. Cooperate with NIFA to present a qualified contract for purchase of the Development. This may include providing copies of additional rent rolls, development tax returns, income certifications, repair and maintenance records, operating expenses and debt service information, and other due diligence documents.
4. Provide access to the Development during regular business hours for inspection by NIFA and prospective purchasers of the Development.

Development Owner Certifications and Commitment

The Development Owner must certify to the following:

1. They have conducted their own investigation and due diligence in determining calculations of the Qualified Contract Price.
2. They are solely responsible for documents and information provided to NIFA and to prospective purchasers.
3. All information submitted is accurate and complete.
4. They understand that NIFA has made no independent investigation of the Development Owner’s submissions and cannot attest to their accuracy or completeness.
5. The Development Owner agrees to indemnify, defend and hold NIFA harmless with respect to the use of information submitted with respect to the Development.

If NIFA finds a prospective purchaser willing to present an offer to purchase the Development for an amount equal to the Qualified Contract Price, the Development Owner must agree to enter into a commercially reasonable form of earnest money agreement or other contract of sale for the Development and provide a reasonable time for necessary due diligence and closing of the purchase.

NOTE: In connection with the process described herein, NIFA is not acting as an agent for any Development Owner and NIFA is not responsible for finding a buyer for any Development and is not representing any Development Owner in the sale of such Development Owner’s Development. Rather, NIFA is simply sharing information about the Development for the convenience of the respective Development Owners who are attempting to sell their developments at a Qualified Contract Price.

If NIFA does not present a Qualified Contract before the one year period expires, the restrictions of the LURA will cease; provided that the Development will remain subject to the requirements set forth in Section 42(h)(6)(E)(ii); that is, for a three year period commencing on the termination of the extended use period, the Development Owner may not (i) evict or terminate a tenancy (other than for good cause) of an existing tenant of any low income unit, or (ii) increase the gross rent with respect to any low income unit except as permitted under Section 42 of the Code, as well as the requirements of the LURA.