Wednesday, September 27, 2006 - 7:00AM

The U.S. Department of Housing and Urban Development (HUD) has designated difficult development areas (DDAs) and qualified census tracts (QCTs) for purposes of the low-income housing tax credit (LIHTC) under Section 42 of the Internal Revenue Code (IRC). HUD makes new DDA designations annually and at this time is making new designation of QCTs based on revised metropolitan statistical area (MSA) definitions published by the Office of Management and Budget (OMB) and on the 2000 Census’ more detailed census tract income distribution data.

The notice includes those areas designated as 2006 DDAs as required by the Gulf Opportunity Zone (GO Zone) Act of 2005, which designated all areas declared by President Bush as eligible for individual or individual and public assistance under the Stafford Act due to hurricanes Katrina, Rita and Wilma as DDAs through the end of 2008. It exempts these GO Zone DDAs from the 20 percent population cap on regular DDAs, allowing HUD to designate a greater number of difficult development areas. Click here for a list of additions and deletions to the list of metropolitan DDAs.

Notable deletions include Las Vegas, Nev. and Orlando, Fla., which were DDAs in 2006 but was not designated as such for 2007. Under limited circumstances, an LIHTC project that is in an area that is on the list in 2006 but not in 2007 can retain the DDA or QCT designation. Those limited circumstances and the effective dates for the 2007 designations are listed in this notice, and will be discussed, along with the major changes in DDAs and QCTs, in the November issue of the LIHTC Monthly Report.

Join Novogradac & Company LLP to discuss this and other recent developments affecting the affordable housing industry at its Tax Credit Housing Finance Conference, November 29-December 1, 2006, in Las Vegas, Nev.

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