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Qualified Allocation Plan Guidance

Tax Credit Rules

Application Materials

The federal low-income housing tax credit program (“LIHTC” or “Tax Credits”) program was established by the Tax Reform Act of 1986 and was codified as in Section 42 of the Internal Revenue Code of 1986, as amended (“IRC Section 42”). The Revenue Reconciliation Act of 1989 amended IRC Section 42 by adding Section 42(m), which requires allocating agencies to allocate low income housing tax credits pursuant to a Qualified Allocation Plan (“QAP,” Plan,” or “Allocation Plan”). The Oklahoma Housing Finance Agency (OHFA) is the housing credit agency responsible for allocating Tax Credits to Owners of qualifying residential rental projects (“Projects”).
IRC Section 42(m)(1) provides as follows:
QUALIFIED ALLOCATION PLAN-- the term 'qualified allocation plan' means any plan which sets forth selection criteria to be used to determine housing priorities of the housing credit agency which are appropriate to local conditions, which also gives preference in allocating housing credit dollar amounts among selected projects to projects serving the lowest income tenants, and projects obligated to serve qualified tenants for the longest periods, and
which provides a procedure that the agency (or an agent or other private contractor of such agency) will follow in monitoring for noncompliance with the provisions of this section and in notifying the Internal Revenue Service of noncompliance with the provisions of this section which such agency becomes aware of.

CERTAIN SELECTION CRITERIA MUST BE USED--The selection criteria set forth in a qualified allocation plan must include:
project location,
housing needs characteristics,
project characteristics including whether the project includes the use of existing housing as part of a community revitalization plan,
sponsor characteristics,
tenant populations with special housing needs,
public housing waiting lists,
tenant populations for individuals with children, and
projects intended for eventual tenant homeownership.

APPLICATION TO BOND FINANCED PROJECTS--IRC Section 42, Subsection (h)(4) shall not apply to any project unless the project satisfies the requirements for allocation of a housing credit dollar amount under the qualified allocation plan applicable to the area in which the project is located. 
There are two methods for obtaining a Tax Credit Allocation:
through an application submitted pursuant to the QAP or
tax exempt bond financing.

Oklahoma Housing Finance Agency utilizes as its Qualified Allocation Plan:

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