As demand for affordable housing continues to grow across the country, more insurance professionals are encountering affordable housing submissions in their markets. But understanding how affordable housing works, how properties are funded, and how the sector differs from traditional multifamily or public housing can be challenging without the right foundation.
HAI Group’s Navigating the Affordable Housing Market virtual event brought together Kelly McElwain, director of research with the Public and Affordable Housing Research Corporation (PAHRC), HAI Group’s research division; Kristina Tatroe, director of the HAI Group Housing Training Institute; and Jeff Weslow, assistant director of business development and strategic solutions, for an introductory look at the affordable housing market.
The discussion explored how affordable housing works, common funding and development models, differences between affordable and public housing, current industry trends, and resources insurance professionals can use to continue building their knowledge.
Watch the recorded session to hear directly from our team about key insights into the affordable housing market.
A growing affordable housing market
Affordable housing is a significant part of the multifamily housing market, and demand continues to grow across the country.
During the session, McElwain provided an overview of the current affordable housing landscape and the factors driving continued demand. She also discussed the public and private investment supporting the development and preservation of affordable rental housing.
Approximately 78,000 affordable housing units were completed in 2025, with nearly 238,000 fully affordable units projected to be completed over the next three years. For insurance professionals, this continued development creates opportunities to work with a specialized segment of the multifamily market with ongoing insurance needs.
Understanding affordable housing risk
One common misconception about affordable housing is that these properties are inherently riskier than conventional multifamily housing. As McElwain explained during the session, the data provides a more nuanced picture. Nearly 90% of HUD-assisted households live in housing that meets adequacy standards, and federally assisted properties are subject to safety, quality, inspection, and compliance requirements.
Low-Income Housing Tax Credit (LIHTC) properties have also demonstrated strong operating performance. The median LIHTC property maintained a 97% occupancy rate through 2024, and since the LIHTC program began, properties have experienced a cumulative foreclosure rate of just 0.47%.
Several characteristics can contribute to this performance, including:
- Consistent demand for affordable rental housing
- Oversight from housing finance agencies
- Ongoing compliance monitoring
- Involvement from institutional investors
- Multiple funding partners with an interest in a property’s long-term success
For insurance professionals, understanding these characteristics can help provide a more complete picture when evaluating an affordable housing opportunity.
Affordable housing and public housing are not the same
Although the terms are sometimes used interchangeably, affordable housing and public housing are not the same. During the session, McElwain explored some of the differences between the two, including how properties are funded, who they serve, their age, and where they are located.
Public housing generally serves households with lower incomes and greater needs. Public housing residents typically pay 30% of their income toward rent, while LIHTC rents are generally established at levels affordable to households earning a designated percentage of the area median income. The properties themselves can also differ. Four out of five public housing units were initially funded before 1980, while 63% of LIHTC-assisted units were funded in 2000 or later.
There are geographic differences as well. While 49 metropolitan areas have at least 2,500 public housing units, 140 metropolitan areas have at least 2,500 LIHTC units. For insurance professionals entering the affordable housing market, understanding these distinctions provides important context when evaluating organizations and potential opportunities.
How affordable housing gets financed
Affordable housing financing can be complex because a single development may involve multiple funding sources and stakeholders. One of the most important programs to understand is the LIHTC program, which helps finance the development and preservation of affordable rental housing.
McElwain walked attendees through the program's basic structure. The IRS allocates tax credits to state housing finance agencies, which establish priorities and requirements for awarding those credits. Developers compete for credits and often combine them with other sources of financing to make a project financially feasible.
Equity investors may provide upfront capital in exchange for an ownership interest and the ability to claim tax credits. Lenders, syndicators, attorneys, insurance professionals, and other partners may also be involved. Each participant may introduce requirements that affect how the property is developed, operated, and insured. For insurance professionals, understanding that structure can provide valuable context when working with an affordable housing client or prospect.
Finding affordable housing opportunities in your market
Insurance professionals interested in expanding into affordable housing may already have opportunities within the communities they serve. During the session, McElwain demonstrated how the National Housing Preservation Database (NHPD) can be used to explore federally assisted rental housing across the country. The database allows users to search for properties and better understand the affordable housing landscape within a particular market.
For agents and brokers, exploring the NHPD can be a practical starting point for identifying affordable housing properties and gaining a better understanding of the organizations operating within their territory.
Building your affordable housing knowledge
Affordable housing comes with its own terminology, programs, funding structures, and regulatory requirements. Building a foundational understanding of the industry can help insurance professionals have more informed conversations with clients, partners, and prospects.
During the event, Tatroe introduced attendees to the HAI Group Housing Training Institute (HTI), which offers training developed specifically for housing professionals. HTI's self-paced courses and industry-recognized certifications cover topics including affordable housing operations, LIHTC, compliance, asset management, risk management, and more. Courses are developed in collaboration with organizations including Baker Tilly, Nan McKay and Associates, and the Consortium for Housing and Asset Management (CHAM).
Questions from the session
Attendees submitted several questions for the session panelists regarding the affordable housing market and HAI Group's underwriting and insurance policies. See below for answers from the Business Development team.
What flexibility do you have for underwriting multiple locations on one policy?
We can accommodate multiple locations and multiple states. We evaluate accounts and their locations on a case-by-case basis. Each state may have its own limitations, and when you submit a statement of values (SOV), we will review and provide feedback.
Are there any HAI Group insurance programs in Hawaii?
We are licensed in the lower 48 U.S. states and D.C., and are not currently writing business in Hawaii. We are unable to speak to programs offered by other carriers or the locations where they operate. Various funding programs have their own rules that owners must follow.
How much does HAI Group’s appetite change from state to state?
We have a general appetite that applies throughout the lower 48 states and D.C., with state-specific guidelines. We prefer to review a complete submission so we can decide and provide customized feedback for the risk.
Is HAI Group’s affordable housing product available in New York, specifically on Long Island?
We review every PHA individually. During this process, we analyze the full portfolio, including locations, loss history, operations, and risk exposure to determine eligibility. At present, we are not expanding our footprint on Long Island.
Do eligible opportunities need to be HUD certified?
HUD has many funding programs that are targeted to support different income levels or populations. In essence, rent-restricted or subsidized housing is eligible for our affordable program. The minimum eligibility requirement is that at least 20% of the portfolio be subsidized. Examples include Section 8, Section 42 (LIHTC), Section 202 senior independent living, HUD-financed housing, workforce housing, and others.
Are you able to write housing commissions?
Yes. We are able to write housing commissions and can discuss available structures based on the specific program and partnership.
Are there solutions for assault and battery with HEIC?
Yes. We have a $100,000 sublimit for assault and battery under our general liability policy.
Do you write permanent supportive housing?
We are not currently writing portfolio locations with permanent supportive housing.
Can you provide blanket insurance for a 100% affordable development containing more than 100 buildings and 400 units?
We prefer to write with replacement cost on a per-building basis. If a need arises, we can discuss any specific coverage needs.
Is HAI Group a brokerage or a carrier?
We are an A+ (Superior) rated carrier by AM Best.
Do agents need a contract to work with HAI Group?
To work with us on a commission basis, you need to be appointed.
What are HAI Group’s commission rates?
Please contact newbusiness@haigroup.com to schedule a meeting to discuss the appointment process and agency compensation.
Do you have capacity or appetite in New York City and the surrounding boroughs?
We do not currently write in the five boroughs of New York, but if you have a specific portfolio in mind, we would like to discuss it in person. Please contact newbusiness@haigroup.com to set up a meeting.
Do you see a future where you will appoint independent insurance agents for HAPI or HARRG public housing policies?
Not at this time. Please get in touch with newbusiness@haigroup.com to set up a meeting to discuss in further detail.
What is the commission structure for new business and renewal accounts? Is there a contingency bonus offered to agencies?
We do not have a bonus structure for agencies. Please contact newbusiness@haigroup.com to schedule a meeting to discuss agency compensation.
Do you manage claims in-house or use a third-party administrator?
We have a dedicated in-house claims department.
Are you open to broker placement, or do you have a more limited broker distribution model?
We are open to working with agencies and do not operate on a captive agency model.
Who can we contact to discuss opportunities and the appointment model?
Please contact newbusiness@haigroup.com to schedule a meeting and discuss the appointment process.
Does HAI Group accept business from wholesale intermediaries?
We do not work with wholesale agents, agencies, or intermediaries.
Continue exploring the affordable housing market
Affordable housing is a specialized market, but developing a foundational understanding of how it works can help insurance professionals identify opportunities and have more informed conversations with clients, partners, and prospects.
In addition to watching the full Navigating the Affordable Housing Market session, you can also explore the following resources to continue building your affordable housing knowledge:
- Download our Agent Broker Kit
- Browse courses from the HAI Group Housing Training Institute
- Explore the National Housing Preservation Database
- Read our blogs:
Have an affordable housing opportunity you would like to discuss? Contact newbusiness@haigroup.com to connect with HAI Group’s Business Development team.
