PHFA Issues New Placed-In-Service Package Requirements
The Pennsylvania Housing Finance Agency (PHFA) has revised their Placed-In-Service Package guidelines. The new guidelines are effective immediately; however, PHFA will accept a Placed-In-Service Package submitted under the old guidelines through June 30, 2025. This is the first revision since 2017.
Submission of the Placed-In-Service Package is a crucial step in the life of a low-income housing tax credit property. This submission is required by state housing finance agencies in order to process the IRS Form 8609. In Pennsylvania the package currently requires up to 35 items (depending on funding sources), one of which is the Development Cost Certification which must be prepared by a Certified Public Accountant. This package must be submitted to PHFA no later than 90 days after the last building is placed in service, otherwise an extension fee will be assessed by PHFA. Note that for tax-exempt bond developments, PHFA will not assess an extension fee until one year after the placed-in-service date.
Several changes are highlighted in the discussion below.
While the requirement of an original bound copy of the Development Cost Certification to be included in the Placed-In-Service Package has not changed, if the development has multiple buildings, a schedule must now be included that contains the eligible basis, qualified basis, and applicable fraction by building. If the development is financed with tax-exempt bonds and has properties in both a qualified census tract (QCT) and non-QCT, a breakdown of QCT and non-QCT costs/basis must be included.
The revised requirements indicate that in order for reserves to be included in total development costs, evidence must be provided that those reserves are fully funded upon submission of the Placed-In-Service Package. PHFA further clarifies that reserves that have not been previously approved by PHFA may not be added in the Development Cost Certification and will not be recognized in total development costs.
Certifications for rent up expenses and relocation expenses must now be executed and included in the Placed-In-Service Package, if applicable.
PHFA has clarified that syndicator/investor letters for developments with multiple buildings that have credit periods beginning in different years must include the addresses of the different buildings along with the first year of the credit period for each building.
The complete list of new guidelines can be found on PHFA’s website linked here and then scrolling to “Tax Credit Submission Requirements and Information” and selecting “Placed In Service Package updated 4/2025,” which will download the new requirements and necessary forms.
McKonly & Asbury, LLP is a leader in accounting for affordable housing entities, and our team has the specialized knowledge to help ensure you comply with reporting requirements relating to Low-Income Housing Tax Credits including Development Cost Certifications for the Placed-In-Service Package. For more information on this service and more, be sure to visit our Affordable Housing industry page, and don’t hesitate to contact us.
The information presented in this post is intended solely for informational purposes and should not be construed as consulting advice from McKonly & Asbury, LLP.
About the Author
Elizabeth is a Partner with McKonly & Asbury as well as the Director of our firm’s Affordable Housing Services. She has over twenty years of extensive audit, tax, and consulting experience in the affordable housing industry. Elizabe… Read more
