Fannie Mae and Freddie Mac have continued to sharpen their focus on mission-driven housing—and it's a boon for investors who are increasing allocations for affordable housing. The agencies are providing favorable financing options for affordable deals.

"As the Agencies' affordable housing goals continue to increase, this will continue to squeeze out the opportunity for market rate deals. Agencies will be selective in pricing market rate deals and likely reserve that portion of their cap for priority borrowers and lower leverage deals," Pamela van Os, SVP of agency production at Greystone, tells GlobeSt.com.

The favorable financing terms will no doubt generate interest in affordable housing investment this year. The sector also offers healthy yields and higher cap rates than market rate deals. "Agencies are also looking to programs to offer competitive pricing with borrowers that have sponsor-initiated regulatory agreements, placing maximum level of rents throughout the loan term," adds van Os.