**FHFA Doubles Cap on GSE Investment in Low-Income Housing Tax Credits**
The Federal Housing Finance Agency (FHFA) announced on Tuesday that it is doubling the amount Fannie Mae and Freddie Mac can invest in Low-Income Housing Tax Credit (LIHTC) properties. The investment cap is increasing from $1 billion to $2 billion for each government-sponsored enterprise, allowing for a combined annual total of $4 billion.
In a statement, the FHFA said, “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.”
The Mortgage Bankers Association (MBA) applauded the move. MBA president and CEO Bob Broeksmit 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.”
This policy shift is seen as a major step toward expanding affordable housing initiatives and addressing critical housing shortages nationwide.
