Affordable housing finance
DDA / QCT
HUD's designated areas — DDAs (high costs relative to AMI) and QCTs (low-income or 25%+ poverty tracts) — where buildings earn the 130% basis boost.
Definition
Both designations come from IRC § 42(d)(5)(B) and are made by HUD. A qualified census tract is one where at least 50% of households have income below 60% of area median gross income, or the poverty rate is at least 25% — capped so QCTs hold no more than 20% of a metro area's population. A difficult development area is one with high construction, land and utility costs relative to AMI. Buildings in either get eligible basis counted at 130%; the lists are re-published annually.
Why it matters in an underwrite
The boost prices land: two parcels across a tract line can differ by a quarter of a deal's equity. Diligence the vintage — confirm the site's designation for the application year and the transition rules if a designation lapses mid-pipeline. In California, note the tension: the federal boost rewards QCT locations while CTCAC's opportunity-area scoring often rewards the opposite, so run both maps before tying up a site.
Sources & related guides
See also
See the term in the law itself
Read the controlling text in the Code Library, or ask the AI how it applies to your project.
Last reviewed 2026-07-29. General information, not legal advice.