HOUSING TAX CREDIT PROGRAM

Final Cost Certification

Attachment 21 (HTC 9)

	

MINNESOTA HOUSING FINANCE AGENCY

MULTIFAMILY UNDERWRITING

May 2000

MINNESOTA HOUSING FINANCE AGENCY
HOUSING TAX CREDIT PROGRAM
FINAL COST CERTIFICATION

The Partners
ABC Limited Partnership
City, State

INDEPENDENT AUDITOR’S REPORT

We have audited the accompanying Schedule of Project Costs (MHFA Form HTC-9) from inception through CUT-OFF DATE of ABC Limited Partnership pertaining to the development of ABC Project.  The Schedule of Project Costs is the responsibility of the Partnership’s management.  Our responsibility is to express an opinion on this schedule based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Schedule of Project Costs is free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Schedule of Project Costs.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall schedule presentation.  We believe our audit provides a reasonable basis for our opinion.

The aforementioned Schedule of Project Costs has been prepared on the basis of accounting and reporting practices prescribed by Minnesota Housing Finance Agency (MHFA) in the MHFA Housing Tax Credit Program Form HTC-9 instructions.  These practices differ in some respects from generally accepted accounting principles. Accordingly, the accompanying Schedule of Project Costs is not intended to be in conformity with generally accepted accounting principles.

In our opinion, the Schedule of Project Costs referred to above presents fairly, in all material respects, the actual project cost of ABC Limited Partnership through CUT-OFF DATE, in conformity with the accounting and reporting practices prescribed in the MHFA Housing Tax Credit Program Form HTC-9 instructions.

We have no financial interest in ABC Limited Partnership other than in the practice of our profession.

This report is intended solely for filing with the Minnesota Housing Financing Agency and is not intended for any other purpose.

City, State
Date

Minnesota Housing Finance Agency
Housing Tax Credit Program
Final Cost Certification
Instructions for Completion of MHFA Form HTC-9
Schedule of Project Costs (Cost Certification)

1.	IRS Requirements.  Internal Revenue Code Section 42 (m) (2) (A) requires Housing Credit Agencies to evaluate the sources and uses of funds for a project at the time the project is placed in service.  IRS Regulations Section 1.42-17 (a) (5) requires a taxpayer to submit a Schedule of Project Costs (the Schedule) to the Housing Credit Agency for this evaluation.

2.	Total Project Costs and Eligible Basis.  The Schedule must detail the project’s total costs as well as those costs which qualify for inclusion in eligible basis under Code Section 42(d) of the Internal Revenue Code.

3.	CPA Report.  The Schedule must be accompanied by a Certified Public Accountant’s audit report.  The audit must be conducted in accordance with generally accepted auditing standards.  The auditor’s report must be unqualified.

4.	Method of Accounting.  The Schedule is to be prepared on the method of accounting used by the taxpayer for federal income tax purposes.

5.	Cut-Off Timing and Eligibility of Costs.  In general, the Schedule should be prepared as soon as possible after the project has been placed in service and new construction and/or rehabilitation has been completed.  The cut-off date selected by the taxpayer should represent the date when construction is complete and the costs includable in eligible basis have been incurred.

a.	Total Project Costs.  In general, only costs which have been paid in cash or have been incurred (ie the work has been completed and billed) should be included in the Total Project Costs column.  When escrows are established for items of incomplete work, the full amount of the contract may be included.  Costs to be paid in cash within 45 days of the cut-off date (such as cost certification fees or tax credit fees) may be included.  Reserves, such as the Development Cost Escrow (DCE), and permanent loan closing costs which will be funded out of a final loan closing, or Operating Reserves which will be funded out of future capital contributions may be included if the source of funding is available by a firm commitment.

b.	Eligible Basis.  Eligible basis is determined as of the close of the first taxable year of the credit period.  Accordingly, costs which qualify as eligible basis must be incurred (in accordance with the taxpayer’s method of accounting for federal income tax purposes) by the close of the year.

6.	Due Date.  The Schedule along with the CPA report must be submitted to the Agency prior to the issuance of the final tax credit allocation and the IRS Form 8609.  The Final Cost Certification along with the complete Application for 8609 must be submitted to the MHFA no later than:

a.	15 days after the last day of the first credit period, or
b.	January 15th of the year following project completion. whichever occurs first

MINNESOTA HOUSING FINANCE AGENCY
HOUSING TAX CREDIT – HTC
FINAL COST CERTIFICATION

PROJECT NAME AND ADDRESS	
Project Name 		State 	MHFA# 		
Address 		County 		
City  		Zip Code 		
ABC LIMITED PARTNERSHIP	
SCHEDULE OF PROJECT COSTS	
CUT-OFF DATE	
 	 	 	 	Rehabilitation/	
 	 		Existing Building	New Construction	
 	 	Total Project Costs	Eligible Basis	Eligible Basis	
ACQUISITION	 	 	 	 	
Land	 				
Existing Structures	 				
Demolition 	 				
Reserves	 				
Other (identify)	 				
SUBTOTAL	 				
OFF SITE WORK	 	 	 	 	
Off Site Improvement	 				
Other (identify)	 				
SUBTOTAL	 				
REHABILITATION AND NEW CONSTRUCTION	 	 	
New Construction	 				
Rehabilitation	 				
Accessory Structures (garages, etc.)				
General Requirements	 				
Contractor Overhead	 				
Contractor Profit 	 				
Builders Overhead					
Builders Profit					
Other (identify)	 				
SUBTOTAL	 				
PROFESSIONAL FEES	 	 	 	 	
Architect, Design/Supervision				
Legal Fees	 				
Accounting (includes Cost Certification)				
Consultant	 				
Engineer/Surveyor	 				
Developer Fees	 				
Other (identify)	 				
SUBTOTAL	 				

 	 	 	 	Rehabilitation/	
 	 		Existing Building	New Construction	
 	 	Total Project Costs	Eligible Basis	Eligible Basis	
FINANCING COSTS	 	 	 	 	
Hazard & Liability Insurance				
Construction Interest	 				
Taxes 	 				
Inspection Fees	 				
Origination Fees	 				
Mortgage Insurance Premium (MIP)				
Revenue Bond Premium	 				
Title and Recording	 				
Underwriters Discount	 				
Bridge Loan Fees	 				
Other (identify)	 				
SUBTOTAL	 				
SOFT COSTS	 	 	 	 	
Rent-up/Marketing Costs	 				
Surveys and Soil Borings					
Payment and Performance Bond Premium					
Building Permits					
SAC/WAC 	 				
Appraisal	 				
Energy Audit	 				
Environmental Assessment				
Market Study	 				
Tax Credit Fees	 				
Compliance Fees					
Furnishings and Equipment					
Other (identify)	 				
SUBTOTAL	 				
PROJECT RESERVES	 	 	 	 	
Rent-Up Reserve	 				
Operating Reserve	 				
Replacement Reserves				
Development Cost Escrow (DCE)				
Working Capital Reserve	 				
Debt Service Reserve	 				
Other (identify)	 				
SUBTOTAL	 				
TOTAL PROJECT COSTS	 	 	 	
TOTAL	 				

I CERTIFY THAT THE INFORMATION CONTAINED HEREIN IS ACCURATE AND AUTHORIZE THE MINNESOTA HOUSING FINANCE AGENCY TO UTILIZE THIS INFORMATION TO CALCULATE THE HOUSING TAX CREDIT.

	IN WITNESS WHEREOF, the undersigned has caused this document to be duly executed in its name on 

this ______________day of ___________________, _______.

	
Print or Type Name of Ownership Entity
	
By:	
Signature

Its:	
Print or Type Title of Managing General Partner

	Print or Type Name of Signatory

STATE OF MINNESOTA	)
	)
COUNTY OF 	)

	The foregoing instrument was acknowledged before me this _______ day of ______________________, ______,

 by _______________________________.
	Print Name of Owner’s Signatory

	
Notary Public