### Question
How is the term qualified allocation plan defined?


### Answer
The term **qualified allocation plan** is defined in *26 U.S.C. § 42* as the following:

> any plan—



(i) which sets forth selection criteria to be used to determine housing priorities of the housing credit agency which are appropriate to local conditions,



(ii) which also gives preference in allocating housing credit dollar amounts among selected projects to—



(I) projects serving the lowest income tenants,



(II) projects obligated to serve qualified tenants for the longest periods, and



(III) projects which are located in qualified census tracts (as defined in subsection (d)(5)(C)) and the development of which contributes to a concerted community revitalization plan, and


  


(iii) which provides a procedure that the agency (or an agent or other private contractor of such agency) will follow in monitoring for noncompliance with the provisions of this section and in notifying the Internal Revenue Service of such noncompliance which such agency becomes aware of and in monitoring for noncompliance with habitability standards through regular site visits

#### Citation:
  - *26 U.S.C. § 42*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter A-Determination of Tax Liability > PART IV-CREDITS AGAINST TAX > Subpart D-Business Related Credits**

