Each GSE is allowed to invest $500 million annually in housing credits.
Fannie Mae and Freddie Mac are returning to the low-income housing tax credit (LIHTC) market as investors.
The government-sponsored enterprises were given the go-ahead to invest in housing credits on a limited basis by the Federal Housing Finance Agency (FHFA), which cited several factors for its decision, including furthering the enterprises’ mission to support affordable housing and ensuring that they could provide “a countercyclical role in the LIHTC market in the future if needed.”
Each enterprise will have an annual investment limit of $500 million, less than a 5% market share for each. Within this funding cap, any investments above $300 million in a given year are required to be in areas that have been identified by FHFA as markets that have difficulty attracting investors. These investments are designed to preserve affordable housing, support mixed-income housing, provide supportive housing, or meet other affordable housing objectives.
Fannie Mae and Freddie Mac were two of the nation’s largest LIHTC investors, representing an estimated 35% to 40% of the market, before being placed into conservatorship by FHFA in 2008. The enterprises’ financial condition deteriorated during the housing market crash, requiring government intervention................Read More
The government-sponsored enterprises were given the go-ahead to invest in housing credits on a limited basis by the Federal Housing Finance Agency (FHFA), which cited several factors for its decision, including furthering the enterprises’ mission to support affordable housing and ensuring that they could provide “a countercyclical role in the LIHTC market in the future if needed.”
Fannie Mae and Freddie Mac were two of the nation’s largest LIHTC investors, representing an estimated 35% to 40% of the market, before being placed into conservatorship by FHFA in 2008. The enterprises’ financial condition deteriorated during the housing market crash, requiring government intervention................Read More
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