LIHTC investments target underserved markets, aiding thousands of low-income households
Fannie Mae has ramped up its commitment to addressing the nation's affordable housing challenges, investing about $3.2 billion in Low-Income Housing Tax Credit (LIHTC) equity properties.
Since its re-entry into the LIHTC market in 2018, Fannie Mae has facilitated the creation and preservation of over 1,000 rental housing units, especially in underserved markets and areas affected by natural disasters.
"LIHTC investment is a proven and effective way to create and preserve affordable housing supply for low- and very-low-income families, particularly in underserved markets," said Dana Brown, vice president of multifamily customer engagement at Fannie Mae.
The LIHTC program, backed by the federal government, encourages private equity investments in affordable rental housing for low-income households. It awards tax credits to developers, who then exchange them with corporate investors for capital contributions.
In 2021, the government-sponsored enterprise increased its annual LIHTC investment cap from $500 million to $850 million. Brown said it has enabled Fannie Mae "to inject more equity support into affordable housing, providing greater access not only to affordable rental housing but also high-impact supportive services for residents, such as on-site job training, counseling services, and after-school programs."
Read more: Fannie Mae’s VP defends LIHTC program for low-income renters
Fannie Mae's contributions have been widespread, with investments in 49 states, including Washington, DC, Guam, Puerto Rico, and the U.S. Virgin Islands. Each year, approximately 90,000 apartment units are built using LIHTC, according to the firm's report.
Some notable investments include $13.5 million in 3300 Caroline in Houston, Texas, providing housing for a diverse group, including the homeless and veterans, and $75 million in multiple properties in Dededo, Guam, offering family housing and educational services for tenants.
"We look forward to continuing to work alongside our LIHTC market partners, who share in our commitment to address the nation's affordable housing supply crisis, as a reliable source of capital for these crucial investments," Brown said.
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