The qualified project period is fixed by project events and survives a sale of the property

bond.disposition_and_transfer.restrictions_run_with_the_project · v1.0.0

Every term of the qualified project period is defined by events at the project or in the financing - 10 percent occupancy, 50 percent occupancy, bonds outstanding, Section 8 assistance - and none of them refers to who owns the project. A sale therefore neither starts a new period nor ends the existing one, and the buyer takes the remaining period as the seller left it, together with the residents' existing deemed-qualification status under 142(d)(3)(B). The regulation's involuntary loss provision confirms the point from the other direction: the requirements cease to apply on foreclosure or a deed in lieu only if the obligation is retired or the proceeds are reinvested in a qualifying project, and they resume if the obligor on the acquired purpose obligation or a related person later obtains an ownership interest for tax purposes during the remaining period. A separate provision, 1.103-8(b)(4)(ii), makes common ownership for Federal tax purposes one of the tests for whether several buildings are one project, so a partial sale can split a single bond project into two.

Confidence

medium

Effective from

1986-10-22

Last reviewed

2026-08-30