LIHTC tools
Year 15 qualified contract price estimator
Under IRC 42(h)(6)(F), the qualified contract price for the low-income portion is the applicable fraction times outstanding debt plus adjusted investor equity plus other capital contributions, less cash distributions; the market-rate portion is added at fair market value. Enter the first credit year to see the compliance and extended use years too.
As of October 30, 2026. Sources: IRC 42(h)(6), 42(i)(1) (Cornell LII); Treas. Reg. 1.42-18 (eCFR). An estimate, not tax or legal advice.
The formula
The key years
The credit period is 10 taxable years starting with the placed-in-service year or, by election, the next year (IRC 42(f)(1)). The compliance period is 15 taxable years from the same start (42(i)(1)). The extended use period runs until at least 15 years after the compliance period ends, or a later date in the agreement (42(h)(6)(D)), which is why the minimum term is 30 years and most agreements run longer. The owner can submit a qualified contract request only after the 14th year of the compliance period, and the agency then has one year (42(h)(6)(I)).
Worked example (the defaults)
A 100% low-income building whose first credit year was 2012, with $6,000,000 of debt, $9,000,000 of investor equity, $250,000 of other capital and $400,000 of distributions. Indexing the equity by an assumed 2.5% a year for 14 years gives $12,716,764, so the price is $18,566,764. The compliance period ended in 2026 and the extended use period runs to at least 2041.
Questions people ask
What is a qualified contract?
After the 14th year of the compliance period, an owner can ask the state agency to find a buyer who will keep the low-income portion affordable, at a price set by formula. If the agency cannot present a qualified contract within one year, the extended use period ends, subject to three years of tenant protections (IRC 42(h)(6)(E)-(I)).
Can every owner use the qualified contract process?
No. The extended use agreement or state law can bar it, and many state allocation plans require owners to waive the right as a condition of an award. Check the recorded agreement for your building first.
What protects tenants if extended use ends?
For three years after termination, the owner cannot evict or end the tenancy of an existing low-income tenant except for good cause, and cannot raise gross rent beyond what section 42 allows (IRC 42(h)(6)(E)(ii)).
How is adjusted investor equity indexed?
Cash the investors were obliged to invest at the start of the credit period, increased by the cost-of-living adjustment from C-CPI-U since the base calendar year (the year the first credit year ends in), with any yearly increase above 5% counted only up to 5% (IRC 42(h)(6)(G)(ii)). This tool applies one assumed yearly rate; use the actual index for a real filing.
Is this the price a buyer would actually pay?
It is the formula minimum the agency must find a buyer at, under Treas. Reg. 1.42-18. The regulation adds rules on what counts as debt, equity and distributions, and many agencies publish worksheets. Real Year 15 exits more often go to the general partner or a nonprofit at a negotiated price.