HUD Designates 2017 Difficult Development Areas and Qualified Census Tracts

HUD recently published in the Federal Register its list of 2017 Difficult Development Areas (DDAs) and Qualified Census Tracts (QCTs), which are used in the Low Income Housing Tax Credit (LIHTC) program. HUD designates DDAs and QCTs each year. DDAs are areas with high development costs relative to incomes. QCTs are census tracts with a poverty rate of at least 25 percent or in which 50 percent of the households have incomes below 60 percent of area median income.

LIHTC properties in DDAs or QCTs can receive a 30 percent basis boost in qualified costs, increasing tax credits, and therefore results in greater equity in the project. In financing a project, a larger equity investment can make possible deeper income targeting, which allows for more extremely low-income households to afford housing.

The new DDAs and QCTs take effect Jan. 1, 2017.