#United States #San Francisco #affordable housing #Novogradac #QCT Estimator

Novogradac Launches a New Tool for QCT Status Estimation

In a significant advancement for affordable housing development, Novogradac has unveiled a new tool designed to help developers and investors estimate the likelihood of certain census tracts qualifying as qualified census tracts (QCTs). This innovative tool provides invaluable insights ahead of the official announcements by the U.S. Department of Housing and Urban Development (HUD).

Understanding QCT Status and Its Importance

A qualified census tract is defined as an area where at least 50% of the households earn less than 60% of the area’s median income, or where the poverty rate exceeds 25%. These tracts are essential for developers as they can qualify for a 30% basis boost through low-income housing tax credits (LIHTCs). This boost significantly assists in overcoming financing gaps, particularly for projects that rely on private activity bonds (PABs).

“The 30% basis boost can be crucial for closing the financing gap for developments,” noted Michael J. Novogradac, CPA and managing partner at Novogradac. “Our new tool provides essential transparency for developers. Understanding whether a property is likely to maintain its QCT status allows for more informed decision-making.”

Features of the QCT Estimator Tool

With the Novogradac Qualified Census Tract Estimator, developers can obtain forecasts on:

• - Retention or change in QCT status: The tool informs users whether areas are expected to lose, gain, or maintain their QCT designation.
• - Future prospects: It highlights areas not currently designated as QCTs that may gain this status in the upcoming years.
• - Eligibility factors: The estimator details the criteria that determine the QCT status, allowing for comprehensive planning.

This tool complements Novogradac’s existing resources, such as the Rent and Income Limits Estimator, reflecting their commitment to aiding the affordable housing community.

Insights from the Development Team

Thomas Stagg, CPA, led the tool's development and shared insights on its purpose: “Our clients have often asked for a way to predict whether their properties will fall into a QCT in advance. By providing this data, we’re enhancing the wealth of information available to developers, which is crucial in an increasingly complex financing landscape.”

Market Impact

The estimator is available through Novogradac’s website, with pricing starting at $500, dependent on the area, state, or full dataset selected. The launch of this tool comes at a pivotal time as HUD typically announces new QCTs and difficult development areas (DDAs) in September or October, and having advance knowledge can greatly influence planning and investment strategies.

About Novogradac

Founded nearly 36 years ago, Novogradac has grown into a significant player in the accounting, audit, and consulting fields, with over 1,000 employees and offices in more than 25 cities. Their specialties cover not only affordable housing but also various sectors including community development and renewable energy, establishing them as a vital resource in the industry.

The introduction of this QCT Estimator reinforces Novogradac’s ongoing dedication to supporting the development of affordable rental housing across the United States. As the need for affordable housing continues to grow, tools and resources that aid in financing and development become more crucial than ever, making this new Estimator a timely and important addition to the toolkit of housing developers.