The direction of federal affordable housing policy will take center stage in Washington, D.C., next year as new leadership prepares to tackle a crisis that impacts millions of Americans. According to a new report from Arbor Realty Trust, shifting dynamics in Congress and the Senate will play a pivotal role in federal funding for affordable housing, which is expected to peak in 2025 before gradually declining over President Donald Trump’s second term.

Arbor said the Low-Income Housing Tax Credit (LIHTC) program, which helps finance the development of affordable housing, is at a crossroads. Although LIHTC accounts for 32.1% of all federally subsidized rental units, it faces an uncertain future as fiscal hawks push to curb tax expenditures. Advocates for affordable housing fear that reductions to the program would hinder new development, especially in high-demand areas where housing costs are rising.