Fannie Mae, a prominent player in the Financial Services industry, according to InvestingPro Tips, has increased its annual investment cap in the Low-Income Housing Tax Credit (LIHTC) program to $850 million in 2021, up from the previous limit of $500 million, with the endorsement of the Federal Housing Finance Agency (FHFA). This strategic move is aimed at providing more equity support to affordable housing initiatives in underserved markets, thereby enhancing access to affordable rental homes for low-income families.
The raised investment is not only set to improve housing accessibility but also fund high-impact services such as on-site job training and counseling for residents. Additionally, the increased funds will enable after-school programs for children in these households, according to Dana Brown, Fannie Mae's Vice President of Multifamily Customer Engagement. Brown reaffirmed Fannie Mae's unwavering commitment to tackling the nation's affordable housing crisis through continued collaboration with LIHTC market partners.
InvestingPro's real-time metrics show that Fannie Mae, despite its declining trend in earnings per share, has managed to maintain a significant return over the last week. The company's market cap stands at 3830M USD, with a P/E ratio of -333.50, reflecting its financial standing in the market.
Since rejoining the LIHTC market following a conservatorship-induced suspension, Fannie Mae has allocated $3.2 billion towards affordable rental properties. The government-sponsored enterprises, including Freddie Mac, were permitted to resume LIHTC investments in 2017. The LIHTC program, launched in 1986, finances approximately 90,000 units annually for low-income residents.
Fannie Mae's capital has funded over 1,000 LIHTC-backed properties across 49 states and federal territories, prioritizing high-need rural areas. Their equity investments have also supported housing for Native American communities and regions affected by natural disasters. InvestingPro Tips also highlights that Fannie Mae's liquid assets exceed short-term obligations, which may provide additional stability and resilience in their market operations.
The FHFA's Duty to Serve guidelines acknowledge LIHTC investments as crucial activities for maintaining affordable housing. The Biden administration also champions the expansion of the LIHTC program as a measure to address the national housing supply shortage. To learn more about investing in companies like Fannie Mae, check out InvestingPro's insights and tips here.
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