Fannie Mae, Freddie Mac to Increase LIHTC Investments

The Federal Housing Finance Agency has increased the GSEs’ cap to $850 million.

Fannie Mae and Freddie Mac can each invest up to $850 million annually in low-income housing tax credits (LIHTCs), an increase from the previous $500 million cap, announced the Federal Housing Finance Agency (FHFA).

Within the $850 million annual funding cap, any investments above $425 million in a given year are required to be in areas that have been identified by FHFA as markets that have difficulty attracting investors.

This marks an increase in the amount of investments under the cap that must be made in targeted transactions that either support housing in Duty to Serve-designated rural areas, preserve affordable housing, support mixed-income housing, provide supportive housing, or meet other affordable housing objectives.

"Increasing the amount each enterprise can invest in the LIHTC market, especially in areas that have difficulty attracting investors, will help expand the supply of affordable housing across the country," said acting director Sandra L. Thompson. "Today's announcement is a part of FHFA's continued efforts to help alleviate America's affordable housing shortage."