All 36 units will benefit from a tribal subsidy allowing tenants to pay 25% of their income toward rent. The property will target families earning no more than 30% to 50% of AMI. The development will include 12 two-story structures featuring flats, townhomes and rental homes. Now that the firm is able to invest more money into LIHTCs, it will look to reach as broadly as it can, including possibly adding multi-investor executions if the situation is right, according to Steve Gildersleeve, who leads the firm’s LIHTC equity efforts as a Freddie Mac Multifamily Targeted Affordable Housing director.įreddie Mac recently invested in the Yurok Homes #3 project, the new construction of 36 units of multifamily housing located 10 miles from Eureka, California, on land owned by the Yurok Indian Housing Authority. Over the past four years, Freddie Mac has invested through proprietary funds. “It expands focus in underserved markets but also gives the flexibility to provide liquidity to those other markets where the need for affordable housing is acute.” “We really believe the right balance has been struck,” he adds. The Housing Authority of the City of Tulsa will provide supportive services to residents.
In addition, if the Affordable Housing Credit Improvement Act passes, that would bring additional tax credits into the market.įannie Mae has invested in a number of recent developments, including the Apache Manor and Sandy Park Apartments, which will facilitate the Rental Assistance Demonstration conversion of 318 public housing units in two properties. This year, there’s approximately 25% more credits than in 2020 as a result of special disaster credits that were made available in California and other states and the recent change to a 4% minimum rate, he says. Fannie Mae has utilized multi-investor vehicles when the partners, model, and geography have matched its plans.īrown notes that increase in investing volume for Fannie Mae and Freddie Mac comes at a time when the overall LIHTC market has grown in recent years. Proprietary funds have allowed the company to target underserved markets and deals. This annual cap increase allows us to do more.”įannie Mae, which has invested in housing credits through both proprietary and multi-investor funds with syndicators, will start to build out its pipeline and deploy capital into the market as soon as possible, with the impact of the increased volume cap likely seen early next year, according to Brown. “That’s what we’ve been doing and what we plan on continuing to do. “From the beginning, we said our focus is going to be broad based, and it’s going to be on underserved markets and projects,” says Dana Brown, vice president, multifamily, at Fannie Mae. With the new investment limits, the GSEs would have roughly a 7.5% share of the market, estimates the Novogradac accounting and advisory firm. This marks an increase in the amount of investments under the cap that must be made in targeted transactions that either support housing in Duty to Serve-designated rural areas, preserve affordable housing, support mixed-income housing, provide supportive housing, or meet other affordable housing objectives. Within the new funding cap, any investments above $425 million in a given year are required to be in areas that have been identified by FHFA as markets that have difficulty attracting investors. 1, The Federal Housing Finance Agency (FHFA) announced the government-sponsored enterprises (GSEs) can each invest up to $850 million annually in the LIHTC market, up from $500 million each. Fannie Mae and Freddie Mac are ready to expand their low-income housing tax credit (LIHTC) activities following an increase in their investment cap.