Kari Downes took on a new role last year—president of Enterprise Community Partners’ low-income housing tax credit (LIHTC) syndication business.
Enterprise Housing Credit Investments is one of the nation’s leading housing credit equity providers, helping to finance affordable housing across the country. This year, it ranks No. 5 on the National Multifamily Housing Council’s list of syndicators.
Downes, who previously served as executive vice president at Enterprise, discusses the LIHTC market and the key moves that her organization is making.
What are your expectations for the LIHTC market this year?
Ongoing economic pressures will continue to create challenges and opportunities in 2025. Deals are happening, but the pace to commitment remains slow, largely due to limited economic capital and the difficulty in matching projects to placement. While demand for affordable housing continues to grow, the reality is that there are far more deal opportunities than available capital, requiring sponsors and syndicators to be highly strategic in structuring transactions.
Meanwhile, investors are more selective, leading to stringent terms and increased scrutiny of deal fundamentals. The legislative landscape adds further uncertainty—while there is strong bipartisan support for LIHTC expansion, competing tax priorities in Congress could slow or limit implementation.
Additionally, rising construction costs, inflation, and supply chain disruptions continue to challenge affordability and project feasibility. Developers face tight financing conditions, as long-term interest rates further constrain access to capital for both construction and permanent financing.
Despite these challenges, we remain optimistic about the resilience of the industry. As the market continues to shift, experienced syndicators can serve as both guides and stabilizing forces—helping investors, developers, and syndicators continue to adapt, collaborate, and innovate.
What are Enterprise Housing Credit Investments’ priorities for 2025?
Enterprise is focused on doing our part to help stabilize the affordable housing sector. The pandemic’s lasting effects, rising operating costs, and sponsor liquidity challenges continue to pressure developers and disrupt project timelines. To address these issues, we are emphasizing upfront diligent underwriting, applying lessons learned from recent market challenges to mitigate risk and improve financial sustainability.
With sponsor failures increasing and resources for new deals constrained, we are reinforcing financial support mechanisms, advocating for additional soft debt and tax credit allocations, and focusing on strategies to bridge financing gaps. Our underwriting approach prioritizes real-time market conditions, ensuring projects are structured for long-term success despite inflation, rising insurance costs, and evolving economic pressures.
We are also working closely with investors and lenders to strengthen market confidence and drive innovative financing solutions that support sustainable development. By focusing on sponsor stability, liquidity recovery, and proactive risk management, Enterprise remains committed to ensuring affordable housing projects continue to serve the communities most in need.
What’s a new move that Enterprise Housing Credit Investments has made recently?
We recently launched a Sponsor Support Team, a dedicated group focused on assisting sponsors navigating challenging deals that works in concert with our 72-person Asset Management team. Given the ongoing economic pressures affecting the affordable housing sector, we recognized the need for a proactive approach to stabilizing operations and ensuring long-term project viability.
This team works closely with sponsors to evaluate all available resources, identify financing solutions, and address liquidity concerns before they escalate. By engaging early, we help sponsors right the ship, mitigating risks and preserving critical development. Ultimately, our goal is to reinforce sponsor resilience, prevent project disruptions, and uphold our commitment to sustaining affordable housing communities nationwide.
Are you seeing any changes in the type of LIHTC developments being developed?
We are not seeing significant changes at the moment—however, if the 50% test is reduced, we anticipate an increase in seller-financed rehabs, particularly once the soft debt supporting new construction bond deals is fully worked through the system. This shift would be a positive development for the industry, helping to preserve existing affordable housing inventory while balancing new construction efforts.
What trends are you keeping an eye on this year?
We are closely watching several key trends in the affordable housing market. State tax credits are expanding in more places, creating new financing opportunities, while investors are becoming more discerning, making deal placement more competitive. Developers should focus on bringing their deals to the market quickly and partnering with trusted, reliable investors rather than broadly shopping deals, as placement options remain limited for certain transactions. Efficiency and strong relationships will be critical to successfully navigate the current landscape.
What makes you most optimistic about the industry?
The resilience, creativity, and dedication of the people working to make housing accessible keep me optimistic. Despite economic challenges, rising costs, and financing constraints, investors, developers, lenders, and syndicators continue to find solutions, persevere, and collaborate to move projects forward.
This industry thrives on innovation—whether it is structuring deals to bridge financial gaps, adapting to shifting market conditions, or leveraging partnerships to sustain long-term affordability. Our commitment to ensuring communities have safe, stable housing remains unwavering, and the collective effort to overcome obstacles reinforces the strength of our mission. Seeing the determination of our partners as we push through challenges and create lasting impact makes me even more confident in the future of affordable housing.
