Qualification Criteria: Severely Distressed Census Tracts
The following criteria is applicable to 2023 allocation agreements.
Areas that are (1) characterized by at least one of items 1-7 on the list below for each QLICI, or (2) characterized by at least two of items 8-14 on the list below:
1. Census tracts with poverty rates greater than 30 percent;
2. Census tracts that (a) if located within a non-Metropolitan Area, have a median family income that does not exceed 60 percent of statewide median family income; or (b) if located within a Metropolitan Area, have a median family income that does not exceed 60 percent of the greater of statewide median family income or the Metropolitan Area median family income;
3. Census tracts with unemployment rates at least 1.5 times the national average;
4. Census tracts that are located in counties not contained within a Metropolitan Statistical Area (MSA), as defined pursuant to 44 U.S.C. 3504(e) and 31 U.S.C. 104(d) and Executive order 10253 (3 C.F.R. Part 1949-1953 Comp., p.758), as amended, with respect to the 2020 Census and as made available by the CDFI Fund;
5. As permitted by IRS and related CDFI Fund guidance materials, QALICBs serving Targeted Populations to the extent that: (a) such projects are 60 percent owned by Low-Income Persons (LIPs); or (b) at least 60 percent of the projects’ employees are LIPs; or (c) at least 60 percent of the projects’ gross income is derived from sales, rentals, services, or other transactions to customers who are LIPs;
6. Federally designated as Indian Reservations, Off-Reservation Trust Lands or Alaskan Native Village Statistical Areas, or Hawaiian Home Lands;
7. Island Areas of the United States as determined by the United States Census Bureau including Puerto Rico, U.S. Virgin Islands, Guam, the Commonwealth of the Northern Mariana Islands, and American Samoa;
8. Census tracts with one of the following: (a) poverty rates greater than 25 percent; or (b) if located within a non-Metropolitan Area, median family income that does not exceed 70 percent of statewide median family income, or, if located within a Metropolitan Area, median family income that does not exceed 70 percent of the greater of the statewide median family income or the Metropolitan Area median family income; or (c) unemployment rates at least 1.25 times the national average;
9. Brownfield sites as defined under 42 U.S.C. 9601(39);
10. Areas designated as distressed by the Appalachian Regional Commission or Delta Regional Authority;
11. Colonias areas as designated by the U.S. Department of Housing and Urban Development;
12. Federally designated medically underserved areas, to the extent that QLICI activities will support health-related services;
13. Counties for which the Federal Emergency Management Agency (FEMA) has (a) issued a "major disaster declaration" and (b) made a determination that such County is eligible for both "individual and public assistance;" provided that the initial project investment was made within 36 months of the disaster declaration; or
14. A Census tract identified as a Food Desert, which must either: 1) be a Census tract determined to be a Food Desert by the U.S. Department of Agriculture (USDA), as identified in USDA’s Food Access Research Atlas (https://www.ers.usda.gov/data-products/food-access-research-atlas/go-to-the-atlas/); or 2) a Census tract that qualifies as a Low-Income Community and has been identified as having low access to a supermarket or grocery store through a methodology that has been adopted for use by another governmental agency, to the extent QLICI activities will increase access to healthy food.
The following criteria is applicable to 2022 and earlier allocation agreements:
Severely Distressed Areas are (1) characterized by at least one of items 1-5 on the list below for each QLICI, or (2) characterized by at least two of items 6-16 on the list below for each QLICI:
1. Census tracts with poverty rates greater than 30 percent
2. Census tracts that (a) if located within a non-Metropolitan Area, have a median family income that does not exceed 60 percent of statewide median family income; or (b) if located within a Metropolitan Area, have a median family income that does not exceed 60 percent of the greater of statewide median family income or the Metropolitan Area median family income
3. Census tracts with unemployment rates at least 1.5 times the national average (8.3% for 2011-2015 ACS Survey, For census tracts located in the Island Areas of the United States (American Samoa, Guam, Northern Mariana Islands and the US Virgin Islands) the national unemployment rate is 9.3. (These two geographies have different bases, because the eligibility data for the Island Areas of the United States comes from a different Census survey).
4. Census tracts that are located in counties not contained within a Metropolitan Statistical Area (MSA) (i.e. non-metropolitan counties), as defined pursuant to 44 U.S.C. 3504(e) and 31 U.S.C. 104(d) and Executive order 10253 (3 C.F.R. Part 1949-1953 Comp., p.758), as amended, with respect to the 2010 Census and as made available by the CDFI Fund;
5. As permitted by IRS and related CDFI Fund guidance materials, projects serving Targeted Populations to the extent that: (a) such projects are 60% owned by low-income persons (LIPs); or (b) at least 60% of the projects’ employees are LIPs; or (c) at least 60% of the projects’ gross income is derived from sales, rentals, services, or other transactions to customers who are LIP;
6. Census tracts with one of the following: (a) poverty rates greater than 25%; or (b) if located within a non-Metropolitan Area, median family income that does not exceed 70% of statewide median family income, or, if located within a Metropolitan Area, median family income that does not exceed 70% of the greater of the statewide median family income or the Metropolitan Area median family income; or (c) unemployment rates at least 1.25 times the national average
7. U.S. Small Business Administration (SBA) designated HUB Zones, to the extent that the QLICIs will support businesses that obtain HUB Zone certification from the SBA
8. Brownfield sites as defined under 42 U.S.C. 9601(39)
9. Areas encompassed by a HOPE VI redevelopment plan
10. Federally designated as Indian Reservations, Off-Reservation Trust Lands or Alaskan Native Village Statistical Areas, or Hawaiian Home Lands
11. Areas designated as distressed by the Appalachian Regional Commission or Delta Regional Authority
12. Colonias areas as designated by the U.S. Department of Housing and Urban Development
13. Federally designated medically underserved areas, to the extent that QLICI activities will support health related services
14. Federally designated Opportunity Zones, Impacted Coal Counties, base realignment and closure areas, State enterprise zone programs, or other similar state/local programs targeted towards particularly economically distressed communities
15. Counties for which the Federal Emergency Management Agency (FEMA) has (a) issued a “major disaster declaration” and (b) made a determination that such County is eligible for both “individual and public assistance;” provided that the initial project investment was made within 36 months of the disaster declaration
16. A Census tract identified as a Food Desert, which must either: 1) be a census tract determined to be a Food Desert by the U.S. Department of Agriculture (USDA), as identified in USDA’s Food Desert Locator Tool; or 2) a census tract that qualifies as a Low-Income Community and has been identified as having low access to a supermarket or grocery store through a methodology that has been adopted for use by another governmental agency, to the extent QLICI activities will increase access to healthy food.
Note: Census data for tracts located in the Island Areas of the United States (American Samoa, Guam, Northern Mariana Islands and the US Virgin Islands) utilize 2006-2010 ACS Survey data and were not updated for the 2011-2015 survey. This eligibility data has been added to the “New Markets Tax Credit Low-Income Community Census Tracts - American Community Survey 2011-2015” file on the CDFI Fund’s website.
