In a landmark move for affordable housing finance, the FHFA has announced that Fannie Mae and Freddie Mac may now each invest up to $2 billion annually in the Low-Income Housing Tax Credit (LIHTC) market.
This decision doubles the previous cap of $1 billion per Government Sponsored Enterprise (GSE), set in 2024, and marks a significant step forward in expanding access to affordable housing nationwide.
The timing of this increase follows the passage of the One Big Beautiful Bill, which significantly expanded the Housing Credit program and is expected to finance 1.2 million additional affordable homes across the country. With this expansion comes a greater need for private sector investment—and the GSEs are now better positioned to meet that demand.
FHFA has also directed that 50% of the GSEs’ LIHTC investments be allocated to difficult-to-serve markets, and at least 20% of that half be dedicated to serve rural communities.
This targeted approach ensures that capital reaches the communities that need it most, including rural areas and regions with historically limited access to affordable housing financing.
Jenna Abbott, Executive Director of CCAH, said “This decision by FHFA is another boost for California’s affordable housing landscape. Doubling the GSE investment cap not only brings more capital into the LIHTC market—the set aside for rural sends a clear message that underserved communities matter. We applaud FHFA for recognizing the urgency and scale of the housing crisis nationally, and especially in California, and for providing another resource that will allow developers to lean in.”
To read the full FHFA announcement please click here.