NAAHL Statement on the Expansion of Fannie Mae and Freddie Mac’s Ability to Invest in Affordable Housing

FHFA announced that Fannie Mae and Freddie Mac will be allowed to invest up to $2 billion each in LIHTC annually.

The National Association of Affordable Housing Lenders (NAAHL) applauds the Federal Housing Finance Agency’s (FHFA) decision to allow Fannie Mae and Freddie Mac (the GSEs) to increase their investments in Low-Income Housing Tax Credits (LIHTC), with a focus on investments in areas that have the most difficulty attracting investment, including rural areas.

“FHFA’s decision to allow the GSEs to double their Low-Income Housing Tax Credit investments will help expand the supply of vital affordable housing for renters, particularly in the most underserved areas,” said NAAHL President and CEO Sarah Brundage. “We are facing an affordable housing crisis, and we support FHFA utilizing every tool the GSEs have to help address that crisis by supporting the creation of more affordable homes, as well as increasing affordable financing options for aspiring homebuyers and property owners.”

The Low-Income Housing Tax Credit (LIHTC) is the leading tool for financing affordable rental housing. Since allowing the GSEs to restart their LIHTC equity investments in 2018, FHFA has gradually increased the amount the GSEs may invest. Previously, each company was allowed to make up to $1 billion in LIHTC investments annually. Today, FHFA announced that each company will be permitted to make up to $2 billion in LIHTC investments, with half of that investment in areas that have difficulty attracting investors, and 20 percent of that investment in underserved markets reserved for Duty to Serve rural communities, as defined by FHFA. Today’s action is complimentary to the recent permanent expansion of the LIHTC program.