Interactive tool · DDA / QCT / State boost
Basis Boost Impact
Enter your unboosted eligible basis, applicable percentage, credit price, and toggle the boost flags. Compute the boosted basis, annual credits, 10-year credit stream, and equity contribution.
Eligible basis before the §42(d)(5) boost — depreciable building costs
9% is competitive; 4% is bond-financed as-of-right
1.0 = 100% LIHTC; less for mixed-income
Typical LIHTC equity pricing: $0.85–$1.00 per credit
The 30% basis boost
Under IRC §42(d)(5)(B), a building's eligible basis is multiplied by 130% if it is located in a Difficult Development Area (DDA), a Qualified Census Tract (QCT), or designated by the state allocating agency under its discretionary authority (§42(d)(5)(B)(v), added by HERA 2008).
- DDA: HUD designates areas with high construction, land, and utility costs relative to AMI. For 2026, HUD designated 2,902 DDAs nationally (2,615 metropolitan ZCTAs plus 287 nonmetropolitan counties).
- QCT: Census tracts where 50%+ of households have incomes below 60% AMI, OR a poverty rate of 25%+. For 2026, HUD designated 14,496 QCTs nationally.
- State-discretionary boost: States can designate any non-DDA/non-QCT building for the 30% boost (full 130% multiplier) if needed for financial feasibility. Some states (CA, NY, MA) deploy this aggressively; others rarely.
The boost is additive in name only. A building qualifies for the boost if ANY of the three apply — the boost rate is fixed at 30% regardless of how many qualify. There's no "stacked" 60% or 90% boost.
FAQ
Is the basis boost 30% or 130%?
Either expression is fine. The statute multiplies eligible basis by 130%. Practitioners often say "30% boost" because that's the increment. Mathematically: boosted basis = unboosted × 1.30.
What about basis-boost rules for 4% bond deals?
DDA and QCT boosts apply to 4% credits the same way they apply to 9%. The state-discretionary boost under §42(d)(5)(B)(v) is not available for bond-financed (4%) buildings — the statute expressly prohibits it. The second sentence of §42(d)(5)(B)(v) reads: "The preceding sentence shall not apply to any building if paragraph (1) of subsection (h) does not apply to any portion of the eligible basis of such building by reason of paragraph (4) of such subsection." §42(h)(4) is the provision that exempts bond-financed buildings from the §42(h)(1) allocation requirement, so the state-discretionary boost is barred as a matter of federal law, not merely state QAP preference.
How do I check if my site is in a DDA or QCT?
HUD User publishes the official DDA and QCT lists annually. The 2026 DDA/QCT designations were published in the Federal Register on September 30, 2025 (FR Doc. 2025-19007), effective January 1, 2026. The HUD CPD Maps tool lets you query by address. State HFAs typically include DDA/QCT verification as part of their underwriting.