While most banks focus on urban locations when investing in Low-Income Housing Tax Credits, Fannie Mae has taken a decidedly different approach, focusing instead on so-called "CRA-not locations."
A good portion of LIHTC demand is driven by the Community Reinvestment Act, legislation passed in the late 1970s that pushes federally insured institutions to invest in the communities where they're chartered. But while most banks focus on "hot markets," Fannie Mae instead looks to markets traditional investors may overlook due to potential risk.
"We're following the spirit and letter of what we're supposed to do," Dana Brown, vice president of multifamily at Fannie Mae, told Trepp in an interview. He added that Fannie Mae's mission is to "be in every market, every day, where CRA investors aren't chasing deals."
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