Two recent regulatory and legislative actions that have the strong backing of NAHB will significantly expand and strengthen the Low-Income Housing Tax Credit (LIHTC) and allow builders to produce more affordable rental housing that the nation sorely needs.

In an important win for NAHB and our multifamily members, Federal Housing Finance Agency (FHFA) Director Bill Pulte announced this week that Fannie Mae and Freddie Mac will be permitted to double their annual LIHTC investment cap from $1 billion to $2 billion annually.

This action “is a concrete step toward solving the nation’s housing affordability crisis,” said NAHB Chairman Buddy Hughes. “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.”

The LIHTC is the most successful affordable rental housing production program in U.S. history. The tax credit is a source of equity financing for the development of affordable housing that serves households earning 60% or less of the area median income with rents restricted to keep the units affordable. Through construction of new apartments, preservation of existing affordable housing, and rehabilitation of older multifamily buildings, the LIHTC adds to the nation’s supply of affordable housing. 

Since its inception, the program has made possible the production of more than 2.5 million affordable apartments. It creates approximately 95,000 new full-time jobs, adds $7.1 billion in income to the economy, and generates approximately $2.8 billion in federal, state and local taxes each year. In recent years, the LIHTC has produced about 75,000 new apartment homes annually.

Because the LIHTC is such an indispensable tool to expand the production of affordable housing, NAHB has fought long and hard to increase resources for the program.

We achieved a notable victory July 4 when President Trump signed the One Big Beautiful Bill Act into law. Among its many important housing- and business-related provisions is legislative language that NAHB fought for that includes the biggest expansion of the LIHTC in decades. Specifically, the LIHTC will be expanded permanently with a 12% increase in 9% credit allocations along with reducing the 4% bond test to 25%, which will expand resources in bond-constrained states.