**FHFA Doubles Cap for GSE Investment in Low Income Housing Tax Credits**
The Federal Housing Finance Agency (FHFA) announced Tuesday that it is doubling the investment cap for Fannie Mae and Freddie Mac in Low Income Housing Tax Credit (LIHTC) properties. Each government-sponsored enterprise (GSE) can now invest up to $2 billion annually, up from the previous $1 billion limit. In total, this move permits a combined annual investment of $4 billion to support affordable housing initiatives.
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 welcomed the move. President and CEO Bob Broeksmit noted, “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.”
