Last week, the White House released a sweeping set of actions the Biden-Harris administration is taking to increase the supply of affordable housing.
Most notably, the Federal Housing Finance Administration (FHFA) increased Fannie Mae and Freddie Mac’s (GSEs or Enterprises) LIHTC investment caps from $500 to $850 million each, for a combined total of $1.7 billion. FHFA is also increasing Enterprise’s Duty to Serve (DTS) investment requirements for three underserved markets (rural housing, manufactured housing and affordable housing preservation) from 40 to 50 percent of their total LIHTC investment capacity. Under the increased DTS requirements, per GSE, $425 million will go towards targeted investments and the remaining $425 will be available for unrestricted investments.
The White House also announced that Treasury and HUD have finalized an agreement to restart the Federal Financing Bank’s (FFB) support of HUD’s Risk Sharing program, which was suspended in 2019. The agreement allows HFAs to offer low interest rates through the sharing of risk with the FFB. For more on FFB, view this article from Buzz Roberts at the National Association of Affordable Housing Lenders.
The press release includes a myriad of other actions the administration is taking including, expanding LIHTC; more funding for HOME, the Housing Trust Fund and the Capital Magnet Fund; offering special purchase rounds for individuals, families and nonprofits; supporting the development of manufactured homes and two four-unit properties; and working with state and local governments to reduce exclusionary zoning.
NH&RA is excited to work alongside an administration that deeply understands the issues of affordable housing and is putting forth bold solutions to match the challenge. These actions, when combined with the potential for housing to be included in the partisan reconciliation infrastructure package, represent a once-in-a-generation (maybe even once-in-a-lifetime) investment in housing.