The Federal Housing Finance Agency (FHFA) announced that Fannie Mae (OTCQB: FNMA) and Freddie Mac (OTCQB: FMCC) are now able to invest in Low Income Housing Tax Credit (LIHTC) properties from $1 billion to $2 billion each, a total of $4 billion per year.
“Today’s increase means that, in a safe and sound manner, Fannie and Freddie can together now deploy $4 billion each year in support of the affordable housing tax credits — half of which will be reserved for difficult to serve LIHTC markets and at least 20% of that half will be Duty to Serve Rural Communities,” said the agency in a press statement. FHFA Director Bill Pulte, who has been making policy announcements through his personal X account, did not publicly acknowledge the policy shift.
Mortgage Bankers Association President and CEO Bob Broeksmit welcomed the announcement shortly after it was released.
“MBA commends President Donald Trump and FHFA Director Bill Pulte for their commitment to address our nation’s ongoing housing affordability challenges and boosting construction of affordable rental housing,” he said. “The LIHTC program is the federal government’s most successful tool to support the construction and rehabilitation of housing for low- and moderate-income households. FHFA’s doubling of the GSEs’ cap on LIHTC investment to $2 billion comes on the heels of program improvements included in H.R. 1 (now Public Law 119-21), both of which will help to increase rental housing supply.”
