The LIHTC program offers tax credits to developers who reserve units for low-income households. Following the 2008 financial crisis, GSEs exited this market, which is now deemed counterproductive. Industry experts highlight the program as vital for affordable housing. Fannie Mae and Freddie Mac will invest $2 billion annually, with half directed to underserved areas and 20% to rural regions. The commitment is aimed at increasing the housing supply, with trade groups supporting the decision amid pressing affordable housing needs.
The LIHTC program provides tax credits to developers who agree to reserve a portion of their rental units for lower-income households, making it the most effective tool for addressing affordable housing.
Fannie Mae and Freddie Mac are set to invest up to $2 billion per year in LIHTC equity, targeting underserved markets and rural communities to improve affordable housing.
Trade groups emphasized that the decision to expand investment in LIHTC is timely, addressing urgent needs in Community Reinvestment Act desert areas.
The Mortgage Bankers Association stated that the LIHTC program remains the federal government's most successful tool for supporting housing construction and rehabilitation for low- and moderate-income households.
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