Understanding TCAC's Qualified Allocation Plan: What Developers Need to Know

What Is the Qualified Allocation Plan?

Every state that administers the Low-Income Housing Tax Credit program must publish a Qualified Allocation Plan (QAP) — a document that sets the rules for how tax credits are distributed to competing projects. In California, the QAP is written and administered by the California Tax Credit Allocation Committee (TCAC).

Understanding the QAP is essential for any developer seeking 9% tax credits. It determines not just whether your project gets funded, but how it needs to be designed, located, and operated.

Threshold Requirements

Before a project can be scored, it must meet a series of minimum requirements: site control, local approval, financing commitments, and market study standards. A project that fails any threshold item is disqualified entirely.

Competitive Scoring

Points are awarded across multiple categories:

• Housing needs characteristics — targeting extremely low-income (ELI) residents, formerly homeless households, or special needs populations
• Sustainable building — green building standards, energy efficiency, proximity to transit
• Leverage — the proportion of public subsidy to private equity raised
• Readiness — entitlements, local approvals, and development team track record
• Geographic set-asides — TCAC divides California into regions and allocates credits proportionally, so a strong project in a rural county competes only against other rural projects

Key Priorities in Recent Years

TCAC has increasingly emphasized:

• Deeper affordability — units at 30% and 40% AMI over the traditional 60% threshold
• Permanent Supportive Housing — a dedicated set-aside for projects serving formerly homeless individuals with on-site supportive services
• Transit-oriented development — rewarding infill locations near high-quality transit
• Cost controls — TCAC scrutinizes high-cost projects and has introduced per-unit cost caps

What a Competitive Application Looks Like

The most competitive projects in California typically share a few characteristics:

• Strong site — infill location near transit, in a high-opportunity area, or in a community with documented housing need
• Deep affordability — units at 30%–50% AMI, often with an ELI set-aside
• Experienced team — developer, contractor, and management with demonstrated LIHTC track records
• Local support — letters from city officials, community organizations, and elected representatives
• Layered financing — MHP, HOME, or local housing trust fund dollars that reduce demand on federal credits

Two competitive rounds are held each year. The QAP rewards preparedness: projects that are entitlement-ready, financially sound, and backed by strong community support consistently outperform.