FHFA Announces Steps to Promote Affordable Housing

As part of the Biden administration’s effort to increase the supply of affordable housing, the Federal Housing Finance Agency today announced that effective immediately, Fannie Mae and Freddie Mac will be permitted to invest up to $850 million annually in the Low-Income Housing Tax Credit market as equity investors. FHFA stipulated that within the annual 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.”

FHFA also announced that it would extend from 20 to 30 days the period during which owner occupants, public entities, and nonprofits will have exclusive ability to buy Fannie Mae and Freddie Mac real estate owned properties before they are available for investor purchase as part of its First Look Program.

These steps are among several outlined today by the Biden administration to “create, preserve and sell to homeowners and nonprofits nearly 100,000 additional affordable homes for homeowners and renters over the next three years, with an emphasis on the lower and middle segments of the market.”