Potential Boon for Affordable Housing
Fannie’s and Freddie’s new higher loan caps point to good things for affordable housing
There is an affordable housing crisis in this country.
For years now, there has been a dearth of affordable housing. And over the past three years alone, the U.S.’s affordable housing stock has fallen to an all-time low.
While investors and developers know the importance of creating more affordable housing, costs have been prohibitive and it’s been difficult to get new communities built.
However, 2024 might be a turning point for the industry.
The Federal Housing Finance Agency lowered Fannie Mae and Freddie Mac’s loan caps to $70 billion each this year. At the same time, LIHTC investment caps for the GSEs were raised, from $850 million last year to $1 billion now.
This represents “a significant and welcomed jump,” Marc Cesare of NewPoint Real Estate Capital told Fotios Tsarouhis in “With Capital Scarce, GSEs Remain Critical.”
So while the GSEs are aiming to be more selective in their underwriting in general, affordable and workforce housing may reap the benefits. As Tsarouhis reported, these loans could preserve affordable rents, without renters having to depend on public subsidies. And that’s a good thing.
Cesare hopes that the GSEs have a “continued emphasis on supporting mission-related transactions, especially those that the FHFA has identified as historically having difficulty attracting investors.”
And so do we.
What do you think about the GSEs’ new cap and their increased rates for affordable housing? Send your thoughts to [email protected].
