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• QUALIFIED CONTRACT Section 42(h)(6)(E)(i)(II) of the Internal Revenue Code created a provision that housing credit agencies respond to the request for presentation of a qualified contract for tax credit developments with expiring compliance periods. The request for presentation of a qualified contract may occur after year 14 of the compliance period. The request for presentation of a qualified contract is a request that the housing credit agency find a buyer (who will continue to operate the property as a qualified low- income property) to purchase the property for a qualified contract price (QCP) pursuant to IRS regulations. If the housing credit agency is unable to find a buyer within one year, the extended use period is terminated. Many owners have chosen to waive the right to request a qualified contract and have committed to thirty years or more of operation as low- income rental housing. Owners should review the respective QAP, development tax credit application, carryover agreement, and Declaration of Land Use Restrictive Covenants to determine whether the development has waived the right to request a Qualified Contract prior to contacting the MHFA. A Request for Qualified Contract may be submitted only once for each development. If an owner rejects an offer presented under the Qualified Contract or withdraws its request at any time after the Notification Letter and Application Materials have been received by MHFA, no other opportunity to request a Qualified Contract will be available for the development in question. A. QUALIFIED CONTRACT PROCESS 1. Owners who are contemplating requesting the presentation of a Qualified Contract should contact the MHFA Tax Credit Compliance Coordinator. MHFA will verify the development's eligibility. 2. If the property is determined eligible to request a Qualified Contract, MHFA will send a letter of acknowledgement to the owner along with: (a) MHFA form of Qualified Contract Notification Letter (b) Qualified Contract Process Guide and related Application Materials (c) Current year dates when requests for Qualified Contracts will not be accepted by MHFA (which will generally coincide with the Consolidated Multifamily RFP schedule). Housing Tax Credit Program 3 Qualified Contract Process Guide (rev.12 /05)