The U.S. Department of Housing and Urban Development (HUD) published a Federal Register notice designating 2023 difficult development areas (DDAs) and qualified census tracts (QCTs) for purposes of the low-income housing tax credit (LIHTC). LIHTC properties built in a DDA or QCT are qualified to increase their eligible basis by up to 30%. The notice, mandated by law, designates DDAs for all states, the District of Columbia, Puerto Rico, Guam, the Northern Mariana Islands and the U.S. Virgin Islands. The notice also designated QCTs based on income and poverty data released in the American Community Survey. The 2023 DDAs and QCTs are effective for LIHTC allocations made after Dec. 31, 2022, or for buildings placed in service after Dec. 31, 2022, if those buildings are financed with tax-exempt bonds.

Financing for LIHTC properties–including the role of DDAs and QCTs–will be among topics discussed at the Novogradac 2022 Tax Credit Housing Finance Conference, Dec. 1-2 in Las Vegas.