Affordable housing finance
Qualified allocation plan (QAP)
The plan IRC § 42(m) requires of every credit agency — selection criteria and preferences that decide who wins credits. In California: the CTCAC regs.
Definition
IRC § 42(m) conditions credit allocations on a qualified allocation plan: each state agency must adopt selection criteria appropriate to local conditions and honor the statute's preferences — among them the lowest-income targeting, the longest-period affordability, and QCT projects contributing to concerted revitalization. Credits allocated outside the QAP simply do not count. In California the QAP takes the form of the CTCAC regulations — scoring, set-asides, underwriting standards and compliance rules in one instrument, re-adopted each December.
Why it matters in an underwrite
The QAP is where federal law hands states the pen: two identical deals win or lose on state-chosen points. Every credit-side underwriting assumption — set-aside eligibility, opportunity-area scoring, basis and fee limits, tiebreakers — lives in the QAP in force for your application year, so version control is diligence: California re-adopts annually and mid-cycle amendments happen. Read the plan before the site is tied up, not after.
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.