HCCP Project Management 2 — Questions and Answers
Question 1: Under LIHTC rules, what is the deadline for meeting the 10% test after receiving a carryover allocation?
- 6 months from allocation date
- 12 months from allocation date (Correct answer)
- 24 months from allocation date
- 18 months from allocation date
Correct answer: 12 months from allocation date
Projects receiving a carryover allocation must incur more than 10% of the reasonably expected basis within 12 months of the allocation date.
Question 2: A developer discovers during construction that the site has unexpected soil contamination. Which project management step is the most appropriate immediate action?
- Proceed with construction and document the issue in the cost certification
- Halt construction, notify the state agency, and engage an environmental consultant (Correct answer)
- Submit a change order and continue grading operations
- Replace the general contractor for failing to identify the issue
Correct answer: Halt construction, notify the state agency, and engage an environmental consultant
Environmental contamination requires halting affected work, notifying the allocating agency, and engaging a qualified environmental consultant to assess remediation needs.
Question 3: In a LIHTC project, what document formally establishes the completion date for purposes of the placed-in-service deadline?
- The architect's certificate of substantial completion
- The lender's final draw approval
- The Certificate of Occupancy issued by the local jurisdiction (Correct answer)
- The state agency's final inspection report
Correct answer: The Certificate of Occupancy issued by the local jurisdiction
A Certificate of Occupancy from the local jurisdiction is the standard evidence used to establish that a building has been placed in service.
Question 4: A general contractor submits a change order that increases total construction costs by 8%. How does this typically affect the LIHTC basis?
- It has no effect because basis is fixed at the time of allocation
- It may increase eligible basis if the costs are depreciable and part of the qualified building (Correct answer)
- It automatically reduces the tax credit allocation proportionally
- It requires a new application to the state housing agency
Correct answer: It may increase eligible basis if the costs are depreciable and part of the qualified building
Depreciable construction costs that are part of the qualified low-income building can increase eligible basis, subject to the allocating agency's review.
Question 5: Which project management tool is most useful for tracking interdependent construction activities and identifying the critical path in a LIHTC development?
- A SWOT analysis matrix
- A Gantt chart with predecessor relationships (Correct answer)
- A risk register
- A construction draw schedule
Correct answer: A Gantt chart with predecessor relationships
A Gantt chart with predecessor relationships enables critical path identification by showing which tasks must be completed before others can begin.
Question 6: Retainage on a LIHTC construction contract is typically released after which event?
- Each approved monthly draw
- Substantial completion and resolution of all punch-list items (Correct answer)
- The first loan disbursement by the construction lender
- Issuance of IRS Form 8609
Correct answer: Substantial completion and resolution of all punch-list items
Retainage is held back during construction to ensure contractor performance and is released after substantial completion and resolution of outstanding punch-list deficiencies.
Question 7: When a LIHTC project converts from construction loan to permanent financing, which project management milestone triggers this transition?
- Issuance of the building permit
- Achievement of the 10% test
- Stabilized occupancy, typically defined as 90% or 93% occupancy for a set period (Correct answer)
- Receipt of the carryover allocation
Correct answer: Stabilized occupancy, typically defined as 90% or 93% occupancy for a set period
Permanent loan conversion is typically triggered when the project achieves stabilized occupancy, commonly defined as 90–93% occupancy maintained for 90 consecutive days.
HCCP Project Management 2
Under LIHTC rules, what is the deadline for meeting the 10% test after receiving a carryover allocation?