On October 27, HUD published a notice in the Federal Register of a “major policy change” regarding how difficult development areas (DDAs) are designated. In the same notice, HUD also published the 2012 DDAs. State low income housing tax credit (LIHTC) agencies can award an increase of up to 30% in tax credits to projects in designated DDAs.
Rather than using Fair Market Rents (FMRs) established for HUD metropolitan areas as the measure of designating DDAs, HUD would use small area FMRs. Small area FMRs are defined at the ZIP code level within metropolitan areas and would be used to arrive at new small area DDAs (SADDAs).
Under the new method proposed by HUD, a number of metropolitan areas that have never had DDAs would have SADDAs. With SADDAs, the additional subsidy available under the LIHTC program would be limited to the higher opportunity areas of high-cost rental markets, and to the highest opportunity areas of otherwise lower-cost rental markets.
Comments are due to HUD by December 27. Access the Federal Register notice at:http://www.gpo.gov/fdsys/pkg/FR-2011-10-27/pdf/2011-27817.pdf