F
reddie Mac's decision to pause quoting new deals involving Traveling Housing Finance Corporations (HFCs) has significantly reduced opportunities for Texas multifamily syndicators. HFCs allowed developers to access financing and incentives not limited to their local area, promoting affordable housing across multiple jurisdictions. However, concerns over their effectiveness have been raised, with critics arguing that the incentives encourage unrealistic projects that face a higher risk of failing.

    In Texas, this issue has become particularly prominent in areas like Garland and Cameron County. For instance, Western Wealth Capital defaulted on nearly $30 million in loans for an apartment complex in Garland. The Texas Legislature previously closed a similar loophole by abolishing Public Facility Corporations (PFCs) last year. PFCs were introduced to incentivize affordable housing development but were misused.

    In response, Texas municipalities are finding alternative ways to encourage affordable housing development. Austin's Density Bonus 90 ordinance has been popular, allowing developers to build up to 90 feet if they set aside units for low-income tenants. Dallas voters also approved an $82 million affordable housing bond earlier this year, and the adaptive reuse of a historic hotel will include 70 affordable apartments.