Affordable Housing and Older Americans Month: CDFIs Are Keeping Affordable Rental Housing Within Reach

Wyae’ Stewart, Public Policy, OFN

May 29, 2026 – 

As housing costs rise and financing becomes harder to access, CDFIs are helping preserve affordable rental housing for older adults and underinvested communities.

Read time: 7 minutes

The United States’ housing crisis is in part because of a shortage of affordable rental housing and the financing needed to preserve and build it. Rising interest rates, higher insurance costs, increasing construction expenses, and tighter lending conditions are making it more difficult for affordable housing developments to secure the financing needed to move forward or remain affordable over time.

These pressures can be especially significant for affordable senior housing developments, where many residents rely on fixed incomes and property owners continue to face rising operating and capital costs. According to Harvard University’s Joint Center for Housing Studies, millions of older adults are housing cost burdened, with many spending more than 30 percent of their income on housing needs.

Across the OFN network, member CDFIs have helped support the development or rehabilitation of nearly 3 million affordable housing units through 2024 and finance approximately $2 billion annually in mortgages. As the nation recognizes Affordable Housing Month and Older Americans Month this May, CDFIs continue demonstrating how flexible, relationship-based financing can help meet the growing demand for affordable and accessible rental housing for older adults.

Why Affordable Rental Housing Developments Need Layered Financing

Affordable rental housing developments rarely rely on a single funding source. Instead, projects often depend on layered financing that combines public investment, tax credits, grants, and private capital. These challenges are especially pronounced for smaller developments, rural housing projects, senior housing, and properties serving extremely low-income households, where rising interest rates and tighter lending conditions have made affordable capital increasingly difficult to access. As a result, traditional lenders may view these projects as too complex, too small, or insufficiently profitable despite the important role they play in local housing stability and economic development.

CDFIs help bridge those gaps by providing financing that can support acquisition, predevelopment costs, bridge financing, refinancing, and long-term investment with the support of federal tools like the Low-Income Housing Tax Credit (LIHTC), HOME Investment Partnerships Program (HOME), Capital Magnet Fund (CMF), and Bond Guarantee Program (BGP). This demonstration of public-private partnership can be especially important for affordable senior housing, where preserving long-term affordability often depends on keeping operating costs manageable while maintaining safe and accessible housing for older adults.

Member Spotlight: Preserving Affordable Senior housing in Nevada

NewWest Community Capital, an OFN member serving communities across the Mountain West, recently helped preserve affordable senior housing through the refinancing of two developments in Nevada: McKnight Senior Village II in Las Vegas and Aspen Terrace Apartments in Reno. Both properties provide affordable rental housing for seniors with household incomes between 30 percent and 60 percent of area median income.

NewWest’s work in Nevada offers a real-world example of the financing partnerships that often make affordable rental housing possible. The developments were supported through a combination of federal LIHTC allocations, HOME funds, Affordable Housing Program funding through the Federal Home Loan Bank of San Francisco, and mission-driven lending. Aspen Terrace Apartments, for example, originally included a $2 million permanent loan from NewWest alongside an additional $1 million investment from Clearinghouse CDFI when the property was developed in 2016.

As financing conditions became more difficult in recent years, NewWest later provided flexible, below-market-rate refinancing to help preserve affordability and improve the long-term financial stability of both properties. That refinancing reflects a broader challenge facing affordable housing providers today. According to NewWest, one of the biggest challenges facing affordable housing developers is the rising interest rates environment, which has made affordable capital increasingly difficult to access. The organization noted that while banks continue seeking partnership opportunities, financing terms offered in recent years would often make it difficult for borrowers to successfully complete projects. At the same time, nonprofit and mission-driven organizations that expanded housing activities during the COVID-19 pandemic are now competing for fewer funding resources as temporary government support declines.

For older adults living on fixed incomes, these financing challenges can have real consequences for the long-term affordability and stability of rental housing. Projects like McKnight Senior Village II and Aspen Terrace Apartments demonstrate how CDFIs preserve affordable housing stock by providing flexible capital and leveraging public and private resources, even in a more challenging financing environment.

Our Policy Priorities

The Trump administration has made it clear that housing affordability is a priority. Recent Congressional momentum on housing legislation also indicates overwhelming bipartisan support for addressing structural issues that would make it easier for Americans to rent, buy and live in safe, affordable homes.

That is why OFN remains committed to strengthening the federal housing programs and financing tools that help communities preserve and expand affordable rental housing, particularly for older adults, rural communities, and underinvested markets facing growing housing insecurity. We continue to advocate for and support the following federal programs.

• Capital Magnet Fund (CMF): The FY2024 CMF round leveraged nearly $8.85 billion in total investment from just $246 million in grants, demonstrating the significant role these resources play in supporting affordable housing production and preservation nationwide. Earlier this month, OFN joined a coalition letter led by the National Association for Affordable Housing Lenders (NAAHL) urging the Administration to release more than $500 million in currently unavailable CMF resources.
• Bond Guarantee Program (BGP): The CDFI Bond Guarantee Program helps mission-driven lenders access long-term, stable capital that can support large-scale affordable housing, community development, and infrastructure projects at zero cost to taxpayers. Since 2013, the program has guaranteed more than $3 billion in bonds that have leveraged private capital to support projects including affordable housing, charter schools, rural health centers, and commercial real estate. OFN continues urging the Administration to promptly release the FY2026 Notice of Guarantee Authority (NOGA) and application materials following Congress’ allocation of $500 million in FY2025 Bond Guarantee authority.
• LIHTC: Last year’s enhancements to LIHTC are expected to help finance more than one million additional affordable rental homes over the next decade, demonstrating how sustained federal investment in housing tools can help expand supply and move more affordable housing developments from concept to completion.
• HOME Investment Partnerships Program: HOME provides flexible financing that states and local governments use to support affordable housing production, rehabilitation, and preservation efforts nationwide. OFN continues supporting efforts to protect and strengthen HOME as rising housing costs and tighter lending conditions make flexible gap financing increasingly important for affordable housing developments.

OFN continues engaging Congress on broader housing policy efforts tied to the bipartisan 21st Century ROAD to Housing Act, including proposals to modernize rural housing programs, preserve affordable rural rental housing, update and reauthorize HOME, and streamline environmental reviews for housing projects supported through HUD and USDA programs. The House-passed package notably excluded several provisions included in the Senate version, including permanent authorization of the Community Development Block Grant-Disaster Recovery program.

As demand for affordable rental housing continues growing, particularly among older adults and low-income households, long-term federal investment and flexible financing tools remain essential to helping mission-driven lenders preserve affordability, stabilize communities, and ensure more people can remain connected to safe and accessible housing in the places they call home.

Affordable Housing Is About More Than Housing Units

For many communities, particularly rural and underinvested areas, the loss of affordable housing can also mean the loss of economic stability, local services, and long-term community resilience.

CDFIs understand that housing challenges look different across the country, and they bring the flexibility, relationships, and long-term commitment needed to respond. Through affordable rental housing financing, senior housing investments, rural development, and relationship-based lending, OFN members continue helping developments move forward in places where traditional financing may not reach while helping ensure more people can remain connected to stable housing and opportunity.

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Tags: Affordable Housing, CDFI Fund, CDFI Leadership, Community Development, Community investment, OFN, Public Policy