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Fannie Mae’s Low-Income Housing Tax Credit (LIHTC) equity investments are part of its mission to support affordable rental housing across the United States. LIHTC is a federal program that incentivizes private investment in affordable housing by providing tax credits to developers in exchange for building or rehabilitating housing for low-income tenants. Fannie Mae re-entered the LIHTC equity market to provide capital to underserved areas, particularly focusing on rural markets and developments that support affordable housing preservation, workforce housing, and other community needs.

What Are Fannie Mae’s LIHTC Equity Investments?

Fannie Mae partners with syndicators, investors, and developers to provide equity capital through the LIHTC program. These investments help finance affordable rental properties for families earning at or below a specified percentage of the Area Median Income (AMI), typically 60% or less. The LIHTC program operates on a 10-year tax credit cycle, where investors receive tax credits in return for their equity contributions to affordable housing projects.

Fannie Mae’s LIHTC investments aim to:

• Increase access to affordable housing in underserved and high-need areas.
• Support rural and Native American communities that have limited access to traditional financing.
• Preserve affordability by helping maintain existing low-income housing stock.
• Encourage innovation in workforce housing and other housing solutions.

How to Access Fannie Mae’s LIHTC Equity Investments

If you are a developer, property owner, or investor looking to access Fannie Mae’s LIHTC investments, follow these steps:

1. Understand Eligibility Requirements

Before applying for LIHTC equity investments, ensure your project meets key eligibility criteria:

• The development must serve low-income tenants (generally 60% AMI or below).
• The project should align with Fannie Mae’s focus areas, such as rural housing or affordable housing preservation.
• The property must comply with LIHTC regulatory requirements for at least 15 years (compliance period), with an extended use period often required.

2. Connect with a LIHTC Syndicator

Fannie Mae works with approved LIHTC syndicators that help allocate LIHTC equity to projects. Developers must typically work with one of these syndicators to access Fannie Mae-backed investments. Reach out to a syndicator to discuss your project’s viability.

3. Secure a LIHTC Allocation

Each state allocates LIHTC credits through its Housing Finance Agency (HFA). To access Fannie Mae’s LIHTC equity, you must first apply for and be awarded LIHTC credits through your state’s HFA. This process involves submitting a competitive application demonstrating the project’s impact, financial feasibility, and compliance with state-specific priorities.

4. Structure the Investment

Once awarded tax credits, work with Fannie Mae’s syndicator to finalize the equity investment terms. The syndicator will:

• Assess your project’s financials.
• Structure the investment deal.
• Ensure compliance with LIHTC requirements.

5. Close the Deal and Begin Construction

After structuring the deal, you will close on the LIHTC investment and begin construction or rehabilitation. Fannie Mae and the syndicator will monitor compliance throughout the investment period.

How to Access LIHTC Equity Quickly

• Work with an experienced LIHTC consultant or developer to streamline the application process.
• Contact a LIHTC syndicator as soon as possible to discuss investment options.
• Apply for LIHTC credits early in your state’s annual allocation cycle to secure funding.

Would you like help finding syndicators or state HFAs in your area?