The U.S. Department of Housing and Urban Development (HUD) published new designations for Difficult Development Areas (DDAs) and Qualified Census Tracts (QCTs).
The new DDAs and QCTs will apply to Housing Credit allocations starting January 1, 2025. These designations, outlined in the Federal Register, are essential for determining the eligibility and amount of tax credits available for affordable housing projects.
Difficult Development Areas (DDAs): DDAs are regions where high costs of construction, land, and utilities make housing development particularly challenging relative to the area’s median gross income (AMGI).
- DDAs are designated based on modified Fiscal Year (FY) 2024 Small Area Fair Market Rents, FY 2024 nonmetropolitan county FMRs, FY 2024 income limits, and 2020 Census population data. This approach ensures the designations reflect current economic conditions.
Qualified Census Tracts (QCTs): QCTs are areas with either high poverty rates or low income levels. Specifically, these tracts are characterized by either 50% or more of the households having incomes below 60% of the AMGI or a poverty rate of at least 25%.
- QCTs are designated based on the latest data from the American Community Survey (ACS). HUD uses the most recent three sets of ACS data to ensure accuracy and avoid anomalies due to sampling errors.
HUD has published the DDA data, as well as metropolitan and non-metropolitan QCT data, for 2025 on its website. Other variations of the data are also available at a dedicated landing page.