For affordable housing deals to pencil out, it’s critical that developers secure the best debt option available for their projects. It’s been especially important this year, and could be in the future, as well, if low-income housing tax credit (LIHTC) prices decline and developers need to borrow more money to make up the difference. “There’s an increasing need for affordable housing as market rents continue to rise while household incomes for middle America remain stagnant,” says Frank Baldasare, managing director at Walker & Dunlop. “Increasing construction costs, coupled with a drop in tax-credit pricing from pending tax reforms, and a reduction in funding of subordinate loan programs that promote development of affordable housing projects, are all exerting a significant impact on affordable housing development.”