HUD Releases 2018 Qualified Census Tract & Difficult Development Area Designations
HUD recently published a notice designating the 2018 Qualified Census Tracts (QCTs) and Difficult Development Areas (DDAs) for the Low Income Housing Tax Credit (LIHTC) program. Qualified Census Tracts are those areas where either: (1) 50 percent or more of the households have incomes below 60 percent of the area median gross income; or (2) the poverty rate is at least 25 percent. Difficult Development Areas are those areas with high construction, land, and utility costs relative to the area median gross income. Both QCTs and DDAs are eligible for an increase in basis and available tax credits of up to 30 percent. The notice specifically details HUD’s methodology in determining the QCTs and DDAs through the use of fair market rents, FY2017 income limits, census counts, and other income and poverty data.
These 2018 designation lists are effective for allocations of LIHTC credit after Dec. 31, 2017, or in the case of bond transactions where tax-exempt bonds are issued and the building is placed in service after Dec. 31, 2017. The HUD notice also explains the effectiveness of the designations for areas not specifically on a 2018 QCT or DDA list, along with illustrative examples of the consequences of the effective date for areas that either gain or lose QCT or DDA status.
An interactive map, full listing of the 2018 QCTs and DDAs, and other historical data can be accessed here.
And the HUD notice can be found here.