Due to legal concerns, Fannie Mae has proposed a steep reduction in rural Low-Income Housing Tax Credit (LIHTC) equity investments for its fiscal year 2023. They have asked the Federal Housing Finance Agency’s (FHFA’s) approval to modify their current Duty To Serve 2023 Plan, specifically decreasing their target for LIHTC equity investments in rural areas from 70 to only 20-40 transactions. The LITHC program is critical to protecting and creating affordable housing, especially in persistent poverty regions. The Duty to Serve Program is important to rural communities because rural CDFI’s and regional rural-serving financial entities are typically all these communities have to rely on for lending and community development services. PRT recommended the following suggestions:
- Treasury to provide guidance on the issue,
- Urge Fannie Mae to adapt to the new market conditions without lowering their LIHTC equity investments; and
- Urge FHFA to raise or eliminate the sole-investor maximum to allow Fannie to complete the mission of Duty To Serve.
Read PRT’s full comment here.