July 23, 2026

Key Takeaways

  • Tax credit equity market participants are seeing more Low-Income Housing Tax Credit (LIHTC) opportunities, but equity demand and execution capacity remain uneven.
  • Tom Schaefer, principal – LIHTC syndications at Advantage Capital, emphasized a practical approach: “always keep it simple.”
  • State LIHTC programs and rural set-asides are creating additional ways to support affordable housing development.

What is happening in the tax credit equity market?

The LIHTC equity market is adjusting to a period of higher supply, pricing pressure, and continued federal uncertainty.

In the Tax Credit Advisor article, “Focus on the Fundamentals: A Mid-Year Assessment of the Tax Credit Equity Market,” panelists from the National Housing & Rehabilitation Association (NH&RA) 2026 Spring Developers Forum discussed several market forces affecting affordable housing finance, including credit price erosion, capacity constraints, and the changing balance between supply and demand.

For developers, syndicators, and investors, the message was clear: market conditions may shift, but disciplined underwriting, strong partnerships, and practical execution remain central to getting affordable housing developments across the finish line.

How State LIHTC Programs Are Expanding Affordable Housing Capacity

Schaefer reinforced the value of staying focused on fundamentals during uncertain periods.

“I think the simplest answer, especially in turbulent market times right now, is always keep it simple,” Schaefer said during the panel.

That perspective reflects a disciplined approach to LIHTC investment: prioritize clarity, focus on viable capital structures and stay grounded in the core purpose of the program — financing affordable homes in communities that need them.

Why do state LIHTC programs matter right now?

State LIHTC programs are becoming an increasingly useful tool for expanding equity capacity and supporting development feasibility.

Schaefer pointed to two trends in the state LIHTC market. First, some states are moving credits beyond exclusive use on 4% transactions and applying them to 9% transactions. Second, more states are creating rural set-asides that direct state credit resources toward rural markets.

By pairing state and federal LIHTC resources, Schaefer noted that the industry can unlock greater equity capacity and help more affordable housing developments move forward.

What should affordable housing stakeholders watch next?

Affordable housing stakeholders should watch how supply, equity demand, investor capacity, and state-level policy continue to interact through the second half of the year.

The panel discussion underscored that new federal and state resources may expand opportunity, but execution still depends on deal quality, market fit, human capacity, and investor confidence.

For Advantage Capital, the conversation aligns with a broader commitment to financing affordable housing in underserved communities through disciplined investment strategies and public-private partnerships.

Read the Full Article

For the full discussion, including insights from the full Tax Credit Equity Roundtable, read the article HERE.