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California Tax Credit Allocation Committee

Additional Guidance for PIS E-App Update

This page provides additional guidance for updating the E-App with Placed-in-Service (PIS) information, focusing on areas where staff commonly encounter errors or missed updates.

Application Worksheet

  1. Update Application Type to "Placed in Service ".
  2. The project name and address are updated on the PIS Application to reflect the FINAL project name and main address (usually address of leasing office(s)).
    1. If the project name has changed since preliminary reservation, then include in parentheses "f.k.a" with the old project name.
  3. Ensure project's federal set-aside election is accurate.
  4. Applicant (Owner) Information reflects final project owner, general partners, and current contact information.
    1. The owner entity name entered in the excel application will be used to draft 8609s, ensure spelling matches the final Limited Partnership Agreement precisely (including punctuation).
    2. All entities must be reflected on final Limited Partnership Agreement.
    3. The parent companies listed are accurate (the controlling developer entities).
    4. The entity listed in the owner/applicant section of the E-App must match the IRS Taxpayer Identification Number (TIN) documentation and name of the limited partnership.
  5. Development Team information reflects final team contact information.
  6. Update the Project Unit Number and Square Footage table.
    1. Verify figures in this table are consistent with the Form B.
  7. Update/complete the "Tenant Population Data" table.
  8. Update the Project Financing section with final financing amounts, debt service payments, terms, interest rates, amortization, etc.
    1. For PIS applications where conversion to permanent financing has not taken place, the Permanent financing section should be left blank, all other areas not affected by Permanent Financing shall be updated for the PIS submission.
  9. Update all sections of the "III. PROJECT FINANCING - SECTION 3: INCOME INFORMATION
    1. To update the Low Income Units rent table:
      1. Update the actual rents
      2. Update Utility Allowances (U.A.):
        1. The U.A. schedule shall not predate the utilized rent limit year.
        2. When U.A.s should be zero, or left blank":
          1. If project owner is paying for all utilities
          2. Master-Metered Utilities, Public Housing Authority (PHA) pays for consumption. A master meter measures consumption for the building, rather than for individual dwelling units or households. In cases where the PHA pays local utility companies for consumption, the utility costs are included in the basic rent levels established by the PHA. No separate allowance is provided.
    2. To update the "Monthly Resident Utility Allowance by Unit Size" section. Amounts should correspond to U.A.s entered in the Low Income rent table and supporting documentation for utilized U.A.s.
    3. When updating Miscellaneous Income section - do not include: Commercial Income, Rental Subsidy Income (including Tenant Based Vouchers), and other types of income not tied to the affordable component of the project.
    4. When updating the operating expenses, other expenses, reserves, etc. - the Residential operating expenses should not include property taxes, replacement reserves, depreciation or amortization expense, compliance monitoring or lender fees, or the costs of any site or service amenities.
    5. Ensure The replacement reserve meets the CTCAC minimums per Reg. § 10327(c)(7)(A).
  10. Update all sections of "III. PROJECT FINANCING - SECTION 4: LOAN AND GRANT SUBSIDIES". If any sources are no longer provided to the project, remove from this section.
  11. Update the "Threshold Basis Limit" table for permitted limit increases. Supporting documentation and certifications are required for specific limit increases, refer to: PIS Submission and Guidance webpage for documents required.
    1. If any increases were elected and preliminary reservation but no longer applicable at PIS, remove adjustment from table.
    2. Seismic upgrading of existing structures, and/or projects requiring on-site toxic or other environmental mitigation: Update the estimated cost in the application threshold basis limit table to the lesser of: actual cost in the final cost certification or 15% of the project's unadjusted eligible basis.
    3. Impact Fees: Enter the dollar amount of the impact fees in the Application Threshold Basis Limit table. Do not include permit processing fees. Staff will review the Sources and Uses Budget to confirm that the amount entered aligns with entered amount.

Post-award Project Cost Changes Worksheet

  1. See #1 of "Sources and Uses Worksheet" section below

Sources and Uses (S&Us) Worksheet:

  1. Prior to updating the "Sources and Uses Budget" worksheet, refer to the "Post-Award Project Cost Changes" instructions worksheet to copy the original costs into the "Post-Award Project Cost Changes" worksheet.
    1. Complete the CTCAC Excel Application's Post-award Project Cost Changes worksheet and provide explanations of increases and/or decreases in the line items of the S&Us Budget/Cost Certification.
  2. Update the S&Us to match/correspond to Final Cost Certification (FCC):
    1. If figures do not match exactly with FCC, figures should correspond where staff should be able to reconcile any differences among line items
    2. Total eligible basis should match between the FCC and S&Us
    3. Permanent Financing figures should correspond among the FCC, S&Us, and Application Worksheet's Permanent Financing section.
    4. If the FCC presents negative figures, the S&Us must exclude those negative amounts.
      1. Downward adjusters are not allowed in the S&Us budget.
      2. If a project has cost savings, reduce the permanent financing source in the S&Us budget. Do not enter a negative amount.
    5. Net tax credit equity amount should match between the FCC and S&Us
      1. Certificated State Credits: If the certificated state credit sale proceeds were loaned to the project by the nonprofit General Partner, the FCC may show the sale proceeds loan as a separate source from the tax credit equity. The S&Us worksheet, however, must combine federal tax credit equity and certificated state credit sale proceeds in the "TAX CREDIT EQUITY" column.
    6. If the FCC includes permit processing fees in the Local Development Impact Fees line item, separate these costs in the Sources and Uses Budget according to the proper line items.
    7. If the project has a solar equity source and/or historical tax credit equity source, then those amounts are separated funding source(s) from the low-income tax credit equity source.
  3. Syndication costs should not be included in main budget. The bottom left of worksheet "SYNDICATION (Investor & General Partner)" section should be used to disclose all syndication costs.
    1. Ensure total syndication costs meets cost limitation requirements of Reg. § 10327(c)(3)
  4. If the commercial space is not owned by the Limited Partnership (note: ownership by related parties to the Limited Partnership does not constitute ownership by the Limited Partnership), then all commercial space costs must be excluded from the project budget. Such costs may only be included if the project has obtained separate, non-tax credit funding sources dedicated specifically to the construction of the commercial space.
  5. Ensure Sources and Uses figures demonstrate the following:
    1. Applicable CTCAC underwriting requirements of Reg. § 10327(c)
    2. Initial and subsequent funding of the operating reserves (FCC must demonstrate as well).
    3. Developer fee includes all funds paid as compensation for developing the project, such as development and financial consultants, developer overhead and profit, construction management (excluding 3rd party), syndicator consulting fees. Development consultant fees include any fees paid to a person or entity for services that are normally or should be performed by the developer. This includes, but is not limited to, tenant file review, financial modeling or consulting, funding application preparation or review, entitlement consulting or services, and building permit expediting.
    4. Projects awarded competitive Tax Credits and involving rehabilitation of existing buildings are required to complete, at a minimum:
      1. the higher of $40,000 in hard construction costs per unit or
      2. 20% of the adjusted basis of the building pursuant to IRC § 42(e)(3)(A)(ii)(I).
    5. Tax-Exempt Bond projects involving rehabilitation of existing buildings with a reservation of tax credits under Reg. § 10326; the Minimum Rehabilitation Project Cost is the higher of:
      1. $15,000 ($10,000 for 2015 and earlier awards) in hard construction costs per unit;
        or
      2. 20% of the adjusted basis of the building pursuant to IRC § 42(e)(3)(A)(ii)(I).
    6. For resyndication projects: If the project did not qualify for a waiver of the Transfer Event Short-Term Work requirements, the cost of the short-term work must be excluded from the Eligible Basis – Structures line.

Sources and Basis Breakdown Worksheet:

  1. If project has buildings located in both QCT/DDA locations and Non-QCT/DDA locations, then update/complete the "Sources and Basis Breakdown" worksheet.

Basis and Credits Worksheet:

  1. Ineligible Amounts section: Update any ineligible basis dollar amounts such as: Photovoltaic Credit, Historic Credit (residential portion only), etc. These items are separate from Eligible Basis that is Voluntarily Excluded.
  2. Projects with Acquisition credits: If eligible basis amounts are voluntarily excluded, then the basis and credits are reduced on the construction portion and the full acquisition basis and credits are maintained. Projects shall be allowed to reduce the acquisition eligible basis portion if owner is declining Acquisition credits where full amount of acquisition basis shall be voluntarily excluded. (Contact CTCAC for assistance if cell is locked in the E-App "Basis and Credits" worksheet).
  3. The Basis and Credits worksheet should be updated with figures corresponding to these documents:
    1. Investor Certification
    2. Notice of Sale (required only for projects utilizing certificated state credits)
    3. Form B:
      1. For projects with multiple buildings and multiple applicable percentages: Complete Form B to calculate the applicable percentage needed to update the "Basis and Credits" worksheet:
      2. For Construction Applicable Percentage on "Form B - NC-Rehab" worksheet: Divide the "Total Amount of New Construction/Rehab Annual Federal Credits" (calculated in Part III of the Form-B)" by the "Total New Construction/Rehab Qualified Basis."
      3. For Acquisition Applicable Percentage on "Form B - Acq" worksheet: If applicable, calculate using same method for "Form B - NC-Rehab" worksheet."

Points System Work Sheet:

9% projects:

  1. If project received any CTCAC approval(s) to change any point categories, update worksheet for this change.
  2. 9% projects: If Low Income Table units AMI targeting has changed since initial application and affects the "lowest income" section(s), update to ensure project still meets awarded point requirements:
    1. Lowest Income Restriction for All Units (50 points)
    2. Lowest Income for 10% of Total Low-Income Units at no greater than 30% AMI (2 points)
  3. The Regulatory Agreement will reflect the units and AMI percentages in the Points System – Lowest Income Table

4% projects:

  1. If project received CDLAC approval to change any point categories, update worksheet for this change.

Final Tie Breaker Worksheet

  1. If applicable, update for any ineligible off-site costs
  2. Update these sections of the Tie Breaker worksheet:
    1. LEVERAGED SOFT FINANCING
    2. CAPITALIZED VALUE OF RENT DIFFERENTIALS ATTRIBUTABLE TO PUBLIC RENT OR PUBLIC OPERATING SUBSIDIES CALCULATION

Subsidy Contract Calculation Worksheet:

  1. If applicable, the "subsidy contract calculation" worksheet (CTCAC Excel application) should be updated using the rental subsidy contract.

15 Year Pro Forma (Pro forma statement) Worksheet

9% credit applications without CTCAC HUD subsidy layering review certification:

  1. Prior to updating the "15 Year Pro Forma " worksheet:
    Ensure other worksheets with linked cells to the 15 Year Proforma are updated, sections include but are not limited to:
    1. Application worksheet – Permanent financing section (debt service payments), Low Income table, Misc Income, Operating Expenses, Replacement Reserve, Other Expenses, etc.
    2. Subsidy Contract Calculation Worksheet: for rental subsidy income
  2. Ensure 15 Year Proforma demonstrates applicable CTCAC underwriting requirements of Reg. § 10327(g)
  3. If additional rows are added to the 15 Year Proforma worksheet to incorporate expenses/revenue not already linked from other worksheets, highlight the row and leave a note to indicate.
  4. Do not include commercial income/expenses in 15 year proforma

All other applications:

  1. For most projects, the requirement for Pro forma statement utilizing CTCAC underwriting for placed in service applications currently under review pursuant to Reg. § 10322(i) are eliminated.
  2. If a project's CTCAC Preliminary Staff Report includes a condition tied to the issuance of 8609s, and that condition has an impact on the Pro forma statement, staff will verify the condition has been met and will review the 15 Year Proforma to confirm demonstration of CTCAC underwriting requirements of Reg. § 10327(g).