A new policy could reshape housing access for rural communities
The nation’s efforts to expand affordable housing received a significant boost this week, as the Federal Housing Finance Agency (FHFA) announced a doubling of investments by Fannie Mae and Freddie Mac into Low-Income Housing Tax Credit (LIHTC) properties. This move has been described by the FHFA as consistent with President Trump’s “One Big Beautiful Bill,” with an aim to substantially increase the supply of affordable homes across the US.
Effective August 5, 2025, Fannie Mae and Freddie Mac are now permitted to invest $2 billion each annually in LIHTC properties, elevating the combined yearly total to $4 billion. This represents a doubling from their previous $1 billion individual caps. The FHFA stated that this expansion is intended to be conducted in a “safe and sound manner,” reinforcing LIHTC’s role as a crucial source of affordable housing supply.
A key aspect of the increased funding is its targeted allocation. According to the FHFA, half of the $4 billion will be “reserved for difficult to serve LIHTC markets.” Furthermore, at least 20% of that specific half will be dedicated to “Duty to Serve Rural Communities,” addressing critical housing needs in underserved areas.
The National Association of Home Builders (NAHB) lauded the decision. Buddy Hughes, chairman of the NAHB, issued a statement applauding Trump and FHFA director Bill Pulte. Hughes emphasized that this action “will allow builders to construct and rehabilitate badly needed rental housing” and is a “concrete step toward solving the nation’s housing affordability crisis.”
“The additional LIHTC investments by Fannie Mae and Freddie Mac will ensure developers have access to the financial resources to deliver affordable rental homes to the millions of Americans who are rent burdened,” stated Hughes.
The “One Big Beautiful Bill” is described by US Federal Housing as “significantly enhancing Low Income Housing Tax Credits.” The increased investment capacity for Fannie Mae and Freddie Mac through the LIHTC program is intended to support affordable housing, particularly in areas that have historically faced greater challenges.
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