HUD Publishes 2024 Qualified Census Tract and Difficult Development Area Designations

In the Sept. 21 issue of the Federal Register, HUD published its annual notice designating the 2024 Qualified Census Tracts (QCTs) and Difficult Development Areas (DDAs) for the LIHTC program. HUD is required to designate these areas under Internal Revenue Code Section 42. Both QCTs and DDAs are eligible for an increase in basis and available tax credits of up to 30 percent for new construction and rehabilitation costs.

These 2024 designation lists are effective for allocations of LIHTC credit after Dec. 31, 2023, or in the case of bond transactions where tax-exempt bonds are issued and the building is placed in service after Dec. 31, 2023. You can find the lists at www.huduser.gov/portal/datasets/qct.html.

QCTs are those areas where either 50 percent or more of the households have incomes below 60 percent of the area median gross income or the poverty rate is at least 25 percent. DDAs are those areas with high construction, land, and utility costs relative to the area median gross income. HUD uses data from fair market rents, FY 2023 income limits, 2020 census counts, and other income and poverty data in the designation of QCTs and DDAs.

The HUD notice also explains how developers working on a potential LIHTC site in a location losing its designation may still be able to preserve the 30 percent boost. For example, for preserving a basis boost for a 9 percent LIHTC site that won’t be on a future list of QCTs or DDAs, the state agency must receive a completed application before the effective date of the subsequent lists and allocate LIHTCs within 730 days after the application is submitted.