HUD recently announced a significant policy change that will impact developers involved in the LIHTC program. Specifically, HUD is targeting the “Qualified Contract” (QC) loophole, which has allowed some developers to exit affordability requirements after just 15 years instead of the intended 30 years. Starting Jan. 1, 2025, any LIHTC project seeking to participate in FHA Multifamily Rental and Risk Share programs will be required to waive the QC provision. This new requirement aims to preserve long-term affordability in LIHTC properties, ensuring they remain affordable for the full 30-year period. For affordable housing multifamily developers, this change means that properties will need to maintain affordability for a longer duration, which could impact financial planning and long-term project viability. Developers who typically relied on the QC provision as an exit strategy will need to adjust their business models and may need to explore alternative financial mechanisms or incentives to offset the extended affordability period. Developers are encouraged to review the draft notice and submit feedback to HUD by Sept. 20, 2024, to influence the final implementation of this policy.