Affordable Housing

As part of its focus on mission-driven lending, Fannie Mae recently introduced a new loan product designed to expand affordability and increase accessibility in communities across the country. The government-sponsored agency’s new Sponsor-Dedicated Workforce (SDW) Housing product provides financing for the creation and preservation of affordable workforce housing in underserved communities without the necessity of government subsidy.

The state of housing affordability in the U.S. has continued to erode as a growing wave of supply-driven policies offers hope of a solution on the horizon. A closer look at the nation’s overall housing needs underscores the increasing urgency of the situation.

In this video, Dr. Sam Chandan, Founding Director of the C.H. Chen Institute for Global Real Estate Finance at the NYU Stern School of Business and non-executive chairman of Chandan Economics, discusses key takeaways from Arbor’s Affordable Housing Trends Report Fall 2023.

The pandemic-era federal and state eviction moratoriums put extreme financial pressure on many in the affordable housing sector. With that issue stabilized and with the recent drop in rates, “many borrowers are now finding that the time is now right to recapitalize or close new affordable housing loans that many borrowers had understandably delayed,” said Arthanais Williams, Managing Director of Affordable Housing at Arbor Realty Trust.

For low-income renters, affordability is a deeply rooted issue. Since 2010, rental affordability has consistently and severely eroded in the U.S., with average rents growing faster annually than average incomes more than 72% of the time. As renters face increased inflationary pressures, state and local governments are exploring a mix of creative and tried-and-true solutions to expand the affordable housing supply.

With the cost of living climbing, the need for affordable housing has become more urgent. Although demand continues to outpace available supply, multifamily investment in affordable housing is fortified by Low-Income Housing Tax Credits (LIHTC), Project-Based Section 8, and the Housing Choice Voucher (HCV) programs. Arbor’s Affordable Housing Trends Report Fall 2023, developed in partnership with Chandan Economics, examines the supply-driven programs and policies designed to improve supply at a point in time when federal gridlock has stalled many funding increases.

Last month, the Department of Housing and Urban Development (HUD) announced the removal of the $25 million loan amount cap for transactions under the Low-Income Housing Tax Credit (LIHTC) Pilot Program. Heralded as a massive win for affordable housing, this opens the door to more investment in a sector where tenant demand outweighs available supply.

Arbor’s latest Affordable Housing Trends Report, developed in partnership with Chandan Economics, offers a wide-ranging lens into the complex, though critically important, affordable and workforce housing sectors.

The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), is one of the largest mortgage insurers in the world. The agency insures mortgages on affordable housing, multifamily properties, single-family homes, multifamily properties, and health care facilities. Since 1934, FHA has financed over 50,000 multifamily mortgages nationwide. Whether you’re interested in acquiring, refinancing, or rehabilitating an affordable housing property, FHA multifamily loans are a financing route you need to know about.

In this video, Sam Chandan, professor of finance and Director of the Chen Institute for Global Real Estate Finance at the NYU Stern School of Business, discusses the key findings of Arbor’s Affordable Housing Trends Report Spring 2023, developed in partnership with Chandan Economics. He adds context to the Federal, state, and local housing policy trends impacting the future of the affordable sector, which, he notes, continues to have the highest development prospects of any residential subtype.