Comment Detail

Comment

I believe that Fannie Mae plays a key and irreplaceable role in the preservation of affordable housing. Fannie can further its already positive impact in two key ways: First, by becoming a purchaser of low income housing tax credits (LIHTC’s), and second, by acting a guarantor to other investors who invest in LIHTC funds.

With regards to re-entering the market for purchase of LIHTC’s, I would advocate that Fannie focus on the geographies that are currently overlooked by the larger investors, who tend to focus on urban areas that fit their CRA footprint. Fannie should focus on suburban, and even rural, areas where credit pricing is less favorable and thus deals are more difficult to make work. Fannie would have a tremendous impact on both the development and preservation of affordable properties by purchasing credits generated by transactions in these underserved areas.

With regards to acting as a guarantor to encourage investment in LIHTC funds, Fannie can play a crucial role in attracting new investors to the marketplace. Having additional investors leads to more demand, and thus increased pricing for LIHTC’s. Higher LIHTC pricing makes more transactions feasible, thus helping Fannie achieve is mandated housing goals. This is a clear win-win-win (Fannie, investors, and residents) that benefits all.

I strongly support these initiatives and sincerely hope they move forward.