AHF Announces Top 25 Lenders of 2016
In some ways, 2016 couldn’t have been a better year to lend money to affordable housing developers.
The AHF Top 25 affordable housing lenders last year lent a total of $27 billion to affordable housing properties with formal income restrictions, including permanent and construction loans. That’s a big increase from the $22.9 billion in 2015 and the $18.7 billion in 2014.
The coffers are likely to be much barer this year, however. Interest rates were low in 2016 but are now beginning to rise. Similarly, though prices for federal low-income housing tax credits (LIHTCs) were high last year, they’ve fallen sharply since, putting pressure on deals. And construction costs had already begun to rise in 2016, particularly for labor, and are expected to rise further this year. Perhaps worst of all, it’s unclear where the capital markets will go from here.
Because of these new pressures, developers are likely to build fewer new affordable housing units this year, which means they’ll take out fewer loans.
“Last year was a record year for Citi,” says John Heppolette, co-head of Citi Community Capital. “There’s much more uncertainty ahead in 2017.”