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A Record Year as the Top Affordable Funder

February 5, 2018

David Leopold

We hit another record high in Targeted Affordable Housing (TAH) last year — and are proud to be the top funder nationwide of homes for low-income families. Our volume rose to $8.6 billion from $5.6 billion in 2016. And we provided more than 50,000 rental units for families struggling to find a decent, affordable place to live. A key theme for the year was doing more — with more varied products and offerings.

Thank you for helping us make this happen. You’re instrumental in our success, and we greatly appreciate what you bring to our business and industry. We’re also proud to recognize our top TAH Sellers: Greystone, Jones Lang LaSalle and Wells Fargo.

Preserving Affordable Housing

Affordable housing preservation fueled our business success last year — and continues to be a priority in 2018. It’s getting harder for low-income renters to find housing. Nearly half the nation’s top metro areas are losing affordable units while demand continues to grow, according to the 2017 housing report from Harvard’s Joint Center for Housing Studies. And for extremely low-income renters, the gap in affordable units is more than 50,000 in 31 metro areas. So there’s a lot more that needs to be done.

Our preservation business increased by 70 percent in 2017 over the previous year, through products like our evolving Tax-Exempt Loan and our Cash Loan for Affordable Housing preservation. Going forward, we’re developing new ways to preserve more affordable housing, not just through our products but through our investments as well. We’re getting back in to the Low-Income Housing Tax Credit (LIHTC) market this year, and will close our first fund in April. Our focus is providing stability and LIHTC to all underserved LIHTC markets, including rural areas. It’s part of our larger Duty to Serve plan to address some of the nation’s most persistent affordable housing problems.

Innovative Offerings

Most of our preservation business is securitized through our innovative platform that transfers risk away from taxpayers and has made us an industry leader. In June 2017 we launched a successful new series of securities backed by Tax-Exempt Loans (TELS) made by state or local housing agencies and secured by affordable rental housing. This ‘ML Certificates’ innovation reduces our cost of capital and the cost to Borrowers, ultimately allowing us to finance even more affordable housing for the nation’s families.

We’re innovating and expanding, while focusing on better processes that make it easier for you to do business with us. Our new TAH Express will make it cheaper, faster and simpler to refinance smaller properties, following a successful pilot late last year. We’re also entering the Single-Family Rental market, focusing on financing for affordable portfolios and high quality professional sponsors.

We’re proud of our record year and will keep the momentum going in 2018: Look for much more to come in the months ahead. As always, we’ll work to strengthen our relationship with you and find new, better ways of doing business together.

David Leopold
Vice President
Targeted Affordable Sales & Investments