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Federal Register / Vol. 86, No. 125 / Friday, July 2, 2021 / Notices location of Project D was in a DDA, and 3 both the issuance of the bonds and placement in service of Project D
occurred after the application was submitted.

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Extension of 2020 DDA and QCT
Designations For LIHTC and bond-financed projects, the sections entitled Effective Date and Interpretive Examples of Effective Date of the 2020 DDA and QCT designations as published September 25, 2019 84 FR 50465 are hereby revised to read as follows:
Effective Date The 2020 lists of QCTs and DDAs are effective:
1 For allocations of credit after December 31, 2019; or 2 for purposes of IRC section 42h4, if the bonds are issued and the building is placed in service after December 31, 2019.
If an area is not on a subsequent list of DDAs, the 2020 lists are effective for the area if:
1 The allocation of credit to an applicant is made no later than the end of the 910-day period after the applicant submits a complete application to the LIHTC-allocating agency, and the submission is made before the effective date of the subsequent lists; or 2 for purposes of IRC section 42h4, if:
a The bonds are issued or the building is placed in service no later than the end of the 910-day period after the applicant submits a complete application to the bond-issuing agency, and b the submission is made before the effective date of the subsequent lists, provided that both the issuance of the bonds and the placement in service of the building occur after the application is submitted.
An application is deemed to be submitted on the date it is filed if the application is determined to be complete by the credit-allocating or bond-issuing agency. A complete application means that no more than de minimis clarification of the application is required for the agency to make a decision about the allocation of tax credits or issuance of bonds requested in the application.
In the case of a multiphase project, the DDA or QCT status of the site of the project that applies for all phases of the project is that which applied when the project received its first allocation of LIHTC. For purposes of IRC section 42h4, the DDA or QCT status of the site of the project that applies for all phases of the project is that which
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applied when the first of the following occurred: a The buildings in the first phase were placed in service, or b the bonds were issued.
For purposes of this notice, a multiphase project is defined as a set of buildings to be constructed or rehabilitated under the rules of the LIHTC and meeting the following criteria:
1 The multiphase composition of the project i.e., total number of buildings and phases in project, with a description of how many buildings are to be built in each phase and when each phase is to be completed, and any other information required by the agency is made known by the applicant in the first application of credit for any building in the project, and that applicant identifies the buildings in the project for which credit is or will be sought;
2 The aggregate amount of LIHTC
applied for on behalf of, or that would eventually be allocated to, the buildings on the site exceeds the one-year limitation on credits per applicant, as defined in the Qualified Allocation Plan QAP of the LIHTC-allocating agency, or the annual per-capita credit authority of the LIHTC allocating agency, and is the reason the applicant must request multiple allocations over two or more years; and 3 All applications for LIHTC for buildings on the site are made in immediately consecutive years.
Members of the public are hereby reminded that the Secretary of Housing and Urban Development, or the Secretarys designee, has legal authority to designate DDAs and QCTs, in accordance with 26 U.S.C. 42d5, by publishing lists of geographic entities as defined by, in the case of DDAs, the Census Bureau, the several states and the governments of the insular areas of the United States and, in the case of QCTs, by the Census Bureau; and to establish the effective dates of such lists.
The Secretary of the Treasury, through the IRS thereof, has sole legal authority to interpret, and to determine and enforce compliance with the IRC and associated regulations, including Federal Register notices published by HUD for purposes of designating DDAs and QCTs. Representations made by any other entity as to the content of HUD
notices designating DDAs and QCTs that do not precisely match the language published by HUD should not be relied upon by taxpayers in determining what actions are necessary to comply with HUD notices.

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Interpretive Examples of Effective Date For the convenience of readers of this notice, interpretive examples are provided below to illustrate the consequences of the effective date in areas that gain or lose DDA status. The examples covering DDAs are equally applicable to QCT designations.
Case A Project A is located in a 2020
DDA that is NOT a designated DDA in 2021, 2022, or 2023. A complete application for tax credits for Project A
is filed with the allocating agency on November 15, 2020. Credits are allocated to Project A on January 30, 2023. Project A is eligible for the increase in basis accorded a project in a 2020 DDA because the application was filed BEFORE January 1, 2021 the effective date for the 2021 DDA lists, and because tax credits were allocated no later than the end of the 910-day period after the filing of the complete application for an allocation of tax credits.
Case B Project B is located in a 2020
DDA that is NOT a designated DDA in 2021, 2022, or 2023. A complete application for tax credits for Project B
is filed with the allocating agency on December 1, 2020. Credits are allocated to Project B on June 30, 2023. Project B
is NOT eligible for the increase in basis accorded a project in a 2020 DDA
because, although the application for an allocation of tax credits was filed BEFORE January 1, 2021 the effective date of the 2021 DDA lists, the tax credits were allocated later than the end of the 910-day period after the filing of the complete application.
Case C Project C is located in a 2020
DDA that was not a DDA in 2019.
Project C was placed in service on November 15, 2019. A complete application for tax-exempt bond financing for Project C is filed with the bond-issuing agency on January 15, 2020. The bonds that will support the permanent financing of Project C are issued on September 30, 2020. Project C
is NOT eligible for the increase in basis otherwise accorded a project in a 2020
DDA, because the project was placed in service BEFORE January 1, 2020.
Case D Project D is located in an area that is a DDA in 2020, but is NOT
a DDA in 2021, 2022, or 2023. A
complete application for tax-exempt bond financing for Project D is filed with the bond-issuing agency on October 30, 2020. Bonds are issued for Project D on January 30, 2023, but Project D is not placed in service until July 30, 2023. Project D is eligible for the increase in basis available to projects located in 2020 DDAs because:
1 One of the two events necessary for
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