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FHFA Boosts Funds Available to Fannie Mae, Freddie Mac for LIHTC Investments
The Federal Housing Finance Agency (FHFA) announced today that it will increase by $350 million each the amount Fannie Mae and Freddie Mae can invest annually in low-income housing tax credit (LIHTC) equity, effective immediately. Previously, each of the enterprises was capped at $500 million. The news release also stated that FHFA requires any investments above $425 million in a given year to be in markets it has identified as having difficulty attracting investors, marking an increase to 50% of the cap from the previous requirement of 40% of Fannie and Freddie’s cap that must be made to meet affordable housing objectives. The announcement was part of a broader initiative announced Wednesday by President Joe Biden’s administration to increase the supply of affordable housing.
The effect of the increases in Fannie and Freddie’s investment in LIHTC equity will be among the topics at the Novogradac 2021 Affordable Housing Tax Credit and Bond Conference Sept. 30-Oct. 1 in Nashville, Tennessee.