Recapture Risk Analysis
Independent analysis of whether identified compliance issues could trigger credit recapture, including evaluation of Available Unit Rule application, set-aside compliance, and Section 42 thresholds.
Section 42 compliance
Section 42 work, for situations that matter.
Deep-focus engagements for LIHTC properties facing complex compliance situations. Recapture risk. Material noncompliance. Form 8823 response. Post-finding remediation.
Section 42
Risk profile
Available Unit RuleActive
Set-aside complianceAt threshold
Form 8823 statusPending
When this fits
When the situation requires deeper engagement.
Most LIHTC compliance work is routine file review. But certain situations require deeper engagement: a state monitoring visit found material noncompliance, a unit is in a long-term Available Unit Rule situation, an investor or lender is demanding independent verification, or a property is preparing for a high-stakes recertification cycle.
Section 42 compliance engagements are scoped for these situations. They go beyond file review to address the structural compliance question and develop a defensible path forward.
Common engagements
Four types of Section 42 work.
Material Noncompliance Response
Strategic support for properties facing material noncompliance findings, including evaluation of whether findings should be disputed, accepted, or remediated, and how to position with state agencies and investors.
Form 8823 Response Support
Support in responding to state agency Form 8823 reporting, including documentation review, response strategy, and coordination with legal counsel where appropriate.
Pre-Acquisition Due Diligence
Compliance due diligence for prospective LIHTC property acquisitions, including review of existing tenant files, identification of pre-existing compliance issues, and assessment of post-acquisition risk.
Engagement process
How these engagements work.
Section 42 engagements are scoped specifically to the situation. Initial conversation, scoping, written engagement letter, then the work. We coordinate directly with your legal counsel where appropriate. We never substitute for legal advice.
Working an actual notice? Read IRS Form 8823: what it is and how to respond for the category list and the correction-period sequence, or see what a LIHTC file review costs.
Get in touch
Facing a Section 42 situation?
Tell us what you're working through. We'll tell you whether and how we can help.