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Live Local Act projects face Fannie, Freddie, and HUD funding hurdles
Developers say tax exemption terms remain unclear for lenders, contributing to a bottleneck where only about 6,000 of 55,000 proposed units are under construction in Florida.
More than three years after Florida enacted the Live Local Act, developers and industry professionals say Fannie Mae, Freddie Mac, and the U.S. Department of Housing and Urban Development remain cautious about funding affordable and workforce housing projects under the law, according to Bisnow.
The legislation, passed in 2023, is designed to encourage development by allowing tax exemptions and density bonuses with limited pushback from local governments, as long as at least 40% of a project serves households earning between 80% and 120% of the area median income. However, developers at the Leading Live Local 2026 event said the housing agencies are not yet comfortable underwriting projects at scale even with mission-driven requirements for affordable multifamily units.
Bisnow reports that of 55,000 units across 182 proposed Live Local Act projects, only about 6,000 units are currently under construction, based on Florida Housing Coalition figures shown at the event. Developers pointed to stalled activity for roughly 50,000 units, citing ongoing uncertainty about how the law’s tax exemptions work for lenders.
A key concern involves the vesting schedule for tax abatements, including a 75% abatement for units built for residents at 120% of area median income and a 100% abatement for units at 80% AMI or less. While a glitch bill was passed to lock in the abatement upon receiving a building permit, developers said the agencies are still wary after other states saw tax-break programs abused, including a Texas program that allowed full exemptions if half the units were set aside below 80% AMI.