On Sept. 1, 2021, the White House announced a set of policies designed to increase the supply of affordable housing, with a goal of producing nearly 100,000 additional affordable homes over the next three years. The policies primarily focus on housing finance tools controlled at the federal level and areas where the federal government can leverage and influence policy at state and local levels.
Affordable Rental Housing
To boost the supply of affordable rental units, the federal government is relaunching the Federal Financing Bank and HUD Risk Sharing program, making changes to the Low-Income Housing Tax Credit (LIHTC) program, and increasing funding under the Capital Magnet Fund grant program. Within the LIHTC program, the Federal Housing Finance Agency (FHFA) increased Fannie Mae and Freddie Mac’s LIHTC cap to $1.7 billion, which is a $700 million increase.
Manufactured Housing and 2-4 Unit Properties
The new policy steps also target the supply of manufactured housing and 2-4 unit properties, a strategy the White House identifies as promoting not only housing affordability, but also equity within the housing market. Related to manufactured housing, Freddie Mac and Fannie Mae are now authorized to accept loan delivery on single-wide manufactured housing. Freddie Mac is also authorized to revisit mortgage eligibility requirements for 2-4 unit properties. The prevalence of 2-4 unit properties helps address the market need for missing middle housing.
Working With State and Local Governments
The final set of policy proposals aims to reduce and eliminate exclusionary zoning practices at state and local levels. Most prominently, FHFA will conduct a study to determine how much of Freddie Mac and Fannie Mae’s mortgage activity is concentrated in jurisdictions with exclusionary policies, and HUD will release a study on actions state and local governments have taken to increase housing supply.
For additional information, read FACT SHEET: Biden-Harris Administration Announces Immediate Steps to Increase Affordable Housing Supply | The White House. The McGuireWoods LLP and McGuireWoods Consulting Affordable Housing Team is always available to assist with the full spectrum of affordable housing development, finance and policy issues.