Greystone’s new $137M fund lands as LIHTC investment rises

Eight months ago, Greystone Real Estate Capital was just getting started raising money for affordable housing projects. It has now closed its second fund in less than a year, drawing three existing institutional investors and five new ones.

Greystone’s latest fund brought in $137 million, pushing the firm’s total multi-investor Low-Income Housing Tax Credit (LIHTC) equity past $240 million. Chief investment officer Todd Jones said in a statement that the platform has built 13 new investor relationships in less than a year. The firm closed its first fund, valued at $103 million, in August 2025.

The firm’s investment haul comes as LIHTC investment continues to grow, with states expanding their own tax-credit programs. In some cases, states preserved the tax structure.

Investment also got a boost at the federal level, primarily from last year’s One Big Beautiful Bill Act. Rising investment in tax-credit-driven affordable housing comes as cities and states pass reforms to build more housing amid persistent affordability concerns nationwide.

Adding affordable housing stock

Greystone’s new fund will finance 11 developments across 20 properties in nine states, creating 1,960 affordable housing units. The first fund provided capital for 11 projects across Louisiana, Massachusetts, Mississippi, New Jersey, Ohio and Pennsylvania, accounting for 959 units.

“This is only the beginning, and we remain committed to expanding our impact by delivering innovative capital solutions that help address the growing need for affordable housing across the country,” said Stephen Rosenberg, Greystone’s CEO.

With its latest fund, 10 of the properties in the latest fund fall under a rural development portfolio, Many LIHTC deals tend to be concentrated in urban markets. The portfolio allocates 60% to new construction and 40% to rehabilitation of existing units.

Most of the fund’s equity (84%) went to repeat developers, reflecting Greystone’s reliance on established relationships on the development side. On the tenant side, 80% of properties carry project-based rental subsidies, and residents average 56% of area median income — figures that place the portfolio in the deeply subsidized housing category rather than workforce-level affordability.

Fund fits a shifting market

Greystone’s rapid capital raise arrives as the broader LIHTC market grows and federal policy shifts open new room for expansion.

LIHTC investment reached about $30.1 billion in 2025, up roughly 4% from the $28.9 billion invested in 2024, according to tax advisory firm CohnReznick‘s annual Housing Tax Credit Monitor. That marks continued growth but at a slower pace than in prior years.

Syndicated equity made up 76% of the 2025 total, while direct investments accounted for the remaining 24% — a notable decline from prior years. Multi-investor funds like Greystone’s captured 44% of syndicated equity in 2025, with proprietary funds taking the other 56%. That split has held steady in recent years.

Growth is expected to continue into 2026. The One Big Beautiful Bill Act permanently raised states’ 9% LIHTC allocations by 12% and lowered the bond-financing threshold for 4% deals from 50% to 25%. The new law also added a rural focus.

Federal regulators expanded capital access too. The Federal Housing Finance Agency doubled Fannie Mae‘s and Freddie Mac‘s annual LIHTC investment caps to $2 billion each, with half of that combined $4 billion reserved for difficult-to-serve markets and 20% earmarked for rural communities.