The White House announced changes at federal agencies that are aimed at ramping up affordable housing.
The initiatives are largely focused on widening financing and production guidelines, Multi-Housing News reported. The administration detailed the policies as part of an update on the Housing Supply Action Plan, which President Joe Biden announced in May.
Among the changes are expanded criteria from The Treasury Department and Internal Revenue Service for individuals to qualify for the Low-Income Housing Tax Credit. Properties will be allowed to qualify on the basis of average income for all units, rather than a single income limitation for rent-restricted units.
The change is meant to create more stable mixed-income communities, spurring more interest in creating more housing for extremely low-income residents and encouraging affordable housing in rural areas.
The IRS, taking a page from its playbook from earlier in the pandemic, extended deadlines for bringing affordable housing online, providing leeway for LIHTC-eligible projects affected by supply chain issues and economic pressures.
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Lastly, the Federal Housing Finance Agency is expanding a program allowing sponsors to secure financing to pay off construction loans for completed projects.
Fannie Mae and Freddie Mac are each authorized to provide $3 billion in Forward Commitment funding, beyond their $78 billion annual caps. The FHFA is also lifting Freddie Mac’s $500 million cap on forward commitments for non-LIHTC projects. The annual $3 billion exemption on forward commitments will apply to both LIHTC and non-LIHTC projects.
The administration announced the Housing Supply Action Plan earlier this year, saying set out to ramp up housing construction by increasing federal funding options for accessory dwelling units, modular homes and manufactured houses, as well as using transportation grants to reward jurisdictions that encourage density.
The plan came after The Federal Housing Administration moved to tamp down on investors’ ability to pick up single-family homes. The agency extended the period for owner-occupants and nonprofits to bid on properties sold through foreclosures on federally-backed mortgages.
—Sasha Jones