Fannie Mae has boosted its cap for investment in the Low-Income Housing Tax Credit (LIHTC) to $850 million annually from the $500 million set in 2017 when it returned to that market.
In making the move, Fannie Mae said it was done to complement the lender’s affordable housing mission in increasing and improving affordable housing stock and help markets most in need of support.
Since the restart, Fannie’s $1.8 billion worth of commitments in LIHTC have helped the program create and preserve thousands of units, accounting for a majority of all affordable rental housing.
LIHTC investments were cited by the GSE as one of the most impactful tools the firm uses to create and preserve affordable housing in underserved markets.
“Increasing the annual cap allows us to better address the affordable housing supply shortage for low- and very low-income families,” explained Michele Evans, EVP and head of Multifamily at Fannie Mae in announcing the heightened effort.
A report earlier this year by Capital One and the Terner Center for Housing Innovation at the University of California Berkeley recommended local government improve the impact of LIHTC by consolidating funding sources to reduce inefficiencies and lower costs and aligning funding sources at the state level to eliminate the complexity of using several sources.
The study also called for governments to broaden and deepen coordination among funding sources to maximize efficiency gains which would involve a requirement that each funding program is transparent about requirements and deadlines.