Connecticut Extends Ten Percent Test, Placed-in-Service Deadlines

The Connecticut Housing Finance Authority (CHFA) is offering owners that have or will execute a carryover allocation agreement between December 1, 2019 and December 31, 2020 the ability to request the following extensions:

  • A six-month extension of the ten percent test deadline for carryover allocations as required by Internal Revenue Code (IRC) Section 42(h)(1)(E)(ii) and IRS regulation 1.42-6.
  • A 12-month extension of the placed in-service deadline as required in IRC Section 42(h)(1)(E)(i).

When requesting an extension, owners should be prepared to outline the specific factors that contributed to the project delays, as well as to identify and summarize their active steps taken to anticipate and mitigate any delays related to labor interruptions or supply chains.

Any approvals of requests for extensions are considered in CHFA’s sole discretion and for extraordinary and uncontrollable circumstances only. If an extension is approved and the owner is not able to meet the related deadline, the credits will be recaptured. CHFA is not authorized by the IRS to provide any additional extensions other than what has been outlined above. Owners should be proactive and provide regular timing updates to CHFA especially if there is concern at any point that the extended deadlines may not be achievable.

Revenue Procedure 2014-50 provides a basis for relief for owners with respect to displaced individuals, but subject to the approval of the issuer of the tax-exempt bonds, which financed the development. All requests should be directed to Colette Slover, Multifamily Underwriter 2 and submitted electronically to colette.slover@chfa.org.