LIHTC in Middle Appalachia

Corey Aber, Director of Community Mission & Impact Finance

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A Better Freddie Mac …and a better housing finance system

For families

...innovating to improve the liquidity, stability and

affordability of mortgage markets

For customers

...competing to earn their business

For taxpayers

...reducing their exposure to mortgage risks

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▪ Rural Middle Appalachia Market

▪ LIHTC in Rural Middle Appalachia

▪ Freddie Mac’s Investment

Agenda

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Rural Middle Appalachia per Duty to Serve

Population:

5.4 Million(1.7% of the U.S.)

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Overview of the Rural Middle Appalachia Market

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Population Distribution by State

▪ LIHTC properties serve ~27% of renter households in the

region

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Homeownership Dominates

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SFRs and MH Supply the Majority of Rental

SFR60%

Mobile Homes23%

Multifamily17%

There are ~563,000 renter households in rural Middle Appalachia

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Contextualizing All Rental Property Sizes

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Renter Income is Lower Than Owner Income

▪ Renter income is significantly lower than the national average

▪ 47.9% of renters pay 30% or more on rent, while 24.6% pay

more than 50%

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LIHTC in Rural Middle Appalachia

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LIHTC Serves a Great Need

▪ 656 LIHTC properties with 25,236 LIHTC units in the region

▪ LIHTC properties serve ~27% of renter households in the region

▪ The average LIHTC property is 39 units, compared to 75 nationally

▪ Average of less than 2% of all LIHTC allocations go to the region each

year

» There are approximately 25 LIHTC allocations per year to the region out of

1,350 nationally (1.8%) over the past 20 years

» This supports an average of 1,060 units per year

» In line with the percentage of the national population in the region (1.7%)

▪ Location Matters

» 261 (39.8 percent) of the region’s LIHTC properties are located within 2

miles of an interstate and 395 (60.2 percent) are within 5 miles

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LIHTC Serves a Great Need

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Credit Usage: National v. Rural Middle

Appalachia

9% Credits

43%

4% Credits

43%

Both14%

9% Credits

44%

4% Credits

30%

Both26%

National Rural Middle Appalachia

Source: Freddie Mac Tabulations of National Housing Preservation Database. Percentages calculated based on LIHTC units.

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Other Subsidies Play an Important Role

▪ 372 of 656 LIHTC properties are supported by other

subsidies

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USDA 515 Also Has a Large Role

▪ There are 620 USDA 515 properties supporting 20,248

renter households

▪ 256 properties and 8,826 units also have LIHTC support

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Freddie Mac’s Investment

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Duty to Serve Markets for LIHTC – All Rural

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Duty to Serve Markets for LIHTC – High Needs

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Freddie Mac LIHTC Investments