Fannie and Freddie Can Each Invest Up to $1 Billion Annually in the LIHTC Market

Housing Finance
Published
Contact: Michelle Kitchen
[email protected]
Senior Director, Multifamily Finance
(202) 266-8352

The Federal Housing Finance Agency (FHFA) announced today that Fannie Mae and Freddie Mac (the Enterprises) will each be allowed to invest up to $1 billion annually in the Low-Income Housing Tax Credit (LIHTC) market as equity investors, beginning in 2024. 

Since September 2021, each Enterprise has been limited to $850 million of investment annually in the LIHTC market. Increasing the Enterprises’ LIHTC investment cap ensures they continue to play a consistent role in supporting the creation and preservation of affordable housing.

The Enterprises will also adjust their LIHTC investment policies to ensure their investments only support projects that remain affordable for the entire 30-year period intended by the program.

Within the $1 billion investment cap, any investments by the Enterprises above $500 million in a given year must be in transactions FHFA has identified as having difficulty attracting investors. This increases the amount of investments under the cap that must 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.

In addition, the Enterprises will only make LIHTC investments in projects that waive the qualified contract provision, ensuring the 30-year affordability period envisioned by the LIHTC program.

LIHTC is the primary federal government program available to address the shortage of affordable rental housing by creating and preserving affordable units in underserved areas throughout the country. FHFA will continue to evaluate the Enterprises’ participation in the LIHTC equity market on an ongoing basis.

Subscribe to NAHBNow

Log in or create account to subscribe to notifications of new posts.

Log in to subscribe

Latest from NAHBNow

Education | Remodeling | Certified Aging-in-Place Specialist (CAPS) | Economics

Jun 16, 2025

Practical Strategies for Aging-in-Place Remodels

Seventy-three percent of industry leaders say that requests for aging-in-place (AIP) features have increased in the last five years, and 56% of remodelers are involved in home modification work relating to AIP, according to the NAHB/Westlake Royal Remodeling Market Index. Learn more about AIP practices on July 10 during NAHB's AIP Shop Talk.

Construction Statistics

Jun 16, 2025

Permit Activity Declines for Fourth Consecutive Month

Housing permits continued a downhill trend for the fourth month in a row, pointing to a broader residential construction slowdown for 2025. Single-family permits were down in three out of four regions, while multifamily permits were up in three out of four regions. See the 10 largest markets for single-family and multifamily activity.

View all

Latest Economic News

Economics

Jun 16, 2025

Permit Activity Weakens in April 2025

Housing permits continued a downhill trend for the fourth month in a row, pointing to a broader residential construction slowdown for 2025. Over the first four months of 2025, the total number of single-family permits issued year-to-date (YTD) nationwide reached 320,259.

Economics

Jun 13, 2025

Household Real Estate Asset Value Falls to Start the Year

The market value of household real estate assets fell from $48.1 trillion to $47.9 trillion in the first quarter of 2025, according to the most recent release of U.S. Federal Reserve Z.1 Financial Accounts. The value of household real estate assets declined for three consecutive quarters after peaking at $48.8 trillion in the second quarter of 2024 but remains 2.1% higher over the year.

Economics

Jun 12, 2025

Producer Prices Rise in May: New Construction Input Analysis

Prices for inputs to new residential construction—excluding capital investment, labor, and imports—rose 0.2% in May, following a (revised) decrease of 0.2% in April. These figures are taken from the most recent Producer Price Index (PPI) report published by U.S. Bureau of Labor Statistics.