The Federal Housing Finance Agency (FHFA) on August 5 announced an expansion of the amount that Fannie Mae and Freddie Mac can invest in properties financed through the Low Income Housing Tax Credit (LIHTC). The LIHTC is the primary tool used to develop moderately affordable housing in the U.S., and the government-sponsored entities (GSEs) can now invest $2 billion each for a total of $4 billion annually.

FHFA is requiring 50% of the investment to be reserved for “difficult to serve” markets, and at least 20% of that half will be in rural areas. The announcement doubles the previous cap on investment ($1 billion each) and is consistent with the passage of HR. 1, also known as the One Big Beautiful Bill, which expanded the LIHTC state allocations.