The affordable housing toolbox has never been fuller. LIHTC, tax-exempt bonds, Agency and FHA programs, and a growing array of state and local resources give developers an expansive set of instruments to work with. But as any contractor knows, a stocked toolbox doesn't guarantee a finished job.

“There are viable tools, but throughout the process, there remain really complicated and time-consuming friction points,” says Stephanie Wiggins, managing director and head of production for PGIM’s agency and FHA lending platform. “Coordination is the key. That is, really, the issue.”

A Complicated Market Moment

The backdrop heading into late 2026 is one of cautious optimism laced with real headwinds, including elevated interest rates, construction costs and insurance burdens that hit affordable properties especially hard. In addition, secondary and tertiary markets, where housing needs are often significant, continue to compete for capital against more proven, investor-favored locales. The reduction of the 4% bond test from 50% to 25% have the potential to help unlock additional transactions in these markets, but its real-world impact will vary by state.

“Many investors find themselves prioritizing larger, high-profile projects,” Wiggins says. “And that makes projects in communities that also have deep need harder to finance.”

Where the System Stalls

From her position overseeing Agency and FHA production, Wiggins has a clear-eyed view of where deals break down. The root cause, almost always, is coordination, specifically timing mismatches between what she calls “all of the alphabet soup components involved in structuring an affordable transaction”: bonds, tax credit equity, soft financing, permanent debt and secondary public financing, each with its own approval conditions and agency requirements.

“Until we figure out more efficient ways to bring equity and other capital into transactions at a lower cost, with less execution time and more coordination,” she says, “we are going to continue to be behind the 8 ball when it comes to getting supply to communities in need.”

The Lender as Navigator

The antidote, in Wiggins’s view, is an earlier and more active role for lenders. “We’re trying to keep the train on the track,” she says, “and act as the project manager for the financing.”

In practice, that means presenting financing options (TEBs, NTEBs, 9% or 4% LIHTC structures) early, with their timelines and tradeoffs; consolidating third-party reports; communicating agency requirements before documents are finalized; and flagging rate-risk tools like Freddie Mac’s Index Lock or HUD early rate locks before the market moves.

“Lenders have an obligation to serve as ambassadors between the agencies and the public funders,” Wiggins says, “to identify these conflicts, these friction points, and develop workable solutions before they delay the transaction.”

The rehabilitation of Parkside Apartments and Mountain View Plaza in Longmont, Colorado, illustrates what that coordination looks like. Working with sponsor Lincoln Avenue Communities on a 4% LIHTC acquisition-rehab, PGIMstructured a single Freddie Mac tax-exempt loan covering both Section 8 properties, rather than financing each as a standalone transaction. This approach preserved 130 affordable units, including 80 senior housing units at Mountain View Plaza, while providing Lincoln Avenue a recapitalization solution across both assets and reducing overall financing costs.

Getting there required several layers of structure working in concert: an equity bridge loan that allowed LIHTC equity contributions to occur on a schedule that better aligned with project needs; a long-term ground lease that supported deal economics in place of additional subordinate financing; and an immediate execution rather than a forward commitment, which reduced both transaction costs and interest-rate exposure. Each piece required prior coordination to put into place.

“You find a way or make a way,” Wiggins says. “That is the motto.”

Eyes on the Horizon

Looking ahead, Wiggins flags three areas that deserve deeper attention: preservation of aging LIHTC properties approaching the end of their compliance periods; workforce housing tools for “missing middle” households outside traditional subsidy programs; and senior affordable housing, where, she says, “The senior tsunami is finally coming to fruition.”

“Rather than treating affordability as this single category, we need to understand that there are specialized sectors that need to be addressed,” she says. “Whether it’s affordable housing for seniors, getting working families into single-family homes or supporting mixed-income communities, each has its own financing needs and its own solutions.”

An Arms Race for Good

Even as the work stays hard, the shared commitment of the industry keeps Wiggins energized. Competition and collaboration coexist in affordable housing finance. Lenders, syndicators, developers and public funders regularly come together to share ideas and work toward common goals.

“Even with our competitors, we’re all getting together and talking about how to increase the supply,” she says. “It’s like an arms race for good around affordable housing.”

For PGIMthe mission is straightforward even when the path isn’t: Provide the tools, expertise and coordination to help affordable borrowers get deals across the finish line.

“At the end of the day, our goal is to provide liquidity and stability to the affordable housing market and to revitalize communities in need,” Wiggins says. “That’s what’s really important here.”