Fannie Mae, Freddie Mac double investment cap on affordable tax credits

Move could boost number of affordable housing projects.

By Peter Fabris, Contributing Editor

Aug. 19, 2025
ID 2235392 | Affordable Housing © Irina Shoyhet | Dreamstime.com
Houses in a row. A row of new affordable housing construction
Photo © Irina Shoyhet | Dreamstime.com

The Federal Housing Finance Agency’s has doubled the investment cap on Low-Income Housing Tax Credits (LIHTC ) for Fannie Mae and Freddie Mac.

That decision is expected to add up to $2 billion from each government-sponsored organization into sorely needed low-income housing projects. The change in policy follows two other moves to accelerate affordable housing projects—an increase of credit allocations by 12% and a reduction of the bond-financing threshold from 50% to 25% in the LIHTC program.

The changes are meant to create equity for developers and give states the resources to finance more affordable housing developments.

Although these measures are widely viewed as a crucial to boost affordable housing development, experts say that regulatory hurdles, staffing constraints, and market conditions could limit their impact. Another potential barrier is reduced staffing and capacity at various government levels that could make it harder for developers to access capital.

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