How to Secure and Maximize DIF Credit for Your Project

When infrastructure work is underway—or about to be—it’s the perfect moment to lock in a strategy for maximizing your Development Impact Fee (DIF) credit. Done right, DIF credits can materially improve your project’s cash flow while reducing fee exposure.

Quick primer: What’s a DIF credit?

Development Impact Fees (DIF) are one-time charges assessed by local agencies to fund public facilities needed by new development. Many jurisdictions allow developers to earn “credits” for constructing eligible public improvements, then apply or assign those credits to offset some or all of their DIF obligations. Programs differ by city/county, so the playbook below helps you capture value without missing local nuances.

Step 1: Understand Eligible Costs

You can often receive credit for more than just hard construction costs. Commonly creditable line items include:

• Design & engineering (frequently capped around ~10% for design-specific credits)

• Permits and inspection fees

• Environmental & geotechnical studies

• Project / construction management (often 10–15% of eligible construction)

• Legal fees tied to the improvements

Eligibility and caps vary by jurisdiction. Many programs explicitly recognize soft costs such as engineering, environmental, and certain financing/administrative items as part of eligible public improvements—always check the local manual or credit agreement language.

Documentation is everything. Keep executed contracts, change orders, stamped pay apps, invoices, lien waivers, and proof of payment lined up from day one—these are typically required during the agency’s audit/verification prior to issuing credit.

Step 2: Time Your Submissions

Credits are based on program rules and fee schedules at the time you submit a complete request (and after acceptance of the improvements), not when you began work. To protect value:

• Monitor fee program updates so you’re not surprised by schedule or rate changes.

• Submit promptly once improvements are accepted to anchor your request to the current program basis and avoid policy shifts.

City program manuals and public facilities financing plans are periodically updated—another reason to keep a close watch and time submittals strategically.

Step 3: Document, Assign, Redeem

After the city accepts the improvements and verifies costs, you’ll typically receive a Certificate of DIF Credit (or similar). With it, you can:

• Apply credits to reduce or offset your project’s DIFs.

• Assign/transfer credits to another phase, parcel, or—in some jurisdictions—another developer, subject to program rules and approvals. Some agreements expressly allow assignment or transfer so long as the beneficiary ties back to the qualifying improvements.

Tip: If your project’s DIF obligation is already satisfied, explore whether your jurisdiction permits credit transfers (sometimes for consideration) within the same program area. Terms are highly local—always confirm the agency’s policy before you plan a transfer.

A simple roadmap to stay organized

• Set up your “credit file” on day one (scope map, bid tabs, contracts, COs, invoices, waivers, proof of payment).

• Track eligible vs. ineligible costs as the work progresses—don’t wait for closeout.

• Pre-coordinate with the agency on any gray-area costs and required exhibits.

• Submit immediately upon acceptance; respond fast to any audit questions.

• Plan your credit strategy (apply, assign, or transfer) based on your pipeline and local rules.

Why this matters

DIF credits turn required public improvements into tangible financial value. Proactive planning, crisp documentation, and well-timed submittals can unlock credits you might otherwise leave on the table—especially in markets where fee programs and schedules evolve.

Let’s maximize your credit

Successfully navigating the DIF credit process requires careful planning, documentation, and timing. The CREDE team guides developers through each phase—from identifying eligible costs to preparing and submitting complete, city-compliant requests—so you capture the full value of your public improvement investments.

📩 To learn how we can support your project, contact Ashley Jones, Project Manager of CREDE’s Credits & Reimbursement Division, at [email protected]