WASHINGTON, DC–In what is a major event for the Low Income Housing Tax Credit markets, Fannie Mae and Freddie Mac will resume their purchasing activity in 2018 having receiving authorization to do so by the Federal Housing Finance Agency.

The FHFA is allowing Freddie Mac to invest in LIHTC equity up to an annual cap of $500 million, subject to certain conditions. Freddie Mac intends to partner with experienced LIHTC syndicators and focus on markets and property types underserved by other investors. Likewise Fannie Mae, although it did not specify what its cap is. “Our volume and where we invest will be dependent on market needs and that changes over time,” Dana Brown, director of Multifamily Customer Engagement and program lead for Fannie Mae LIHTC investment activities, tells GlobeSt.com.

The GSEs pulled out of the LIHTC market during the financial crisis, as did many investors. Indeed the crisis upended the market; the dismal financials at most firms meant that few had a need for tax credits to offset their profits. Ditto the GSEs, which also had other troubles at the time.