The Federal Housing Finance Agency (FHFA) announced today that it is raising the annual amount that Fannie Mae and Freddie Mac can invest in the Housing Credit to $2 billion each. Half of their investments will be reserved for difficult to serve Housing Credit markets and at least 20 percent of that half will be Duty to Serve Rural Communities.
The increase doubles the $1 billion per Government Sponsored Enterprise (GSE) limit set when FHFA last adjusted the cap in 2024 and follows the recent historic expansion of the Housing Credit enacted as part of the broader reconciliation package. The press release issued by FHFA today acknowledges this expansion, stating, “The One Big Beautiful Bill is also significantly enhancing Low Income Housing Tax Credits, one of America’s most important sources of affordable housing supply.”
Prior to 2024, the GSEs were operating under a cap of $850 million, which was increased in 2021 from the $500 million cap initially set when they re-entered the Housing Credit market in 2017.
“The Federal Housing Finance Agency’s decision to allow Fannie Mae and Freddie Mac to increase their investments in the Low-Income Housing Tax Credit is welcome news, especially in light of the recent historic expansion of the Housing Credit as part of One Big, Beautiful Bill,” said Emily Cadik, Chief Executive Office of the Affordable Housing Tax Credit Coalition. “The Housing Credit is now expected to finance 1.2 million more affordable homes than otherwise possible, which will require significantly more private sector investment. We appreciate Director Pulte and FHFA recognizing the role of the government sponsored enterprises in addressing our nation’s affordable housing shortage through the Housing Credit.”
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