Rising construction costs have resulted in many of the new multifamily housing projects becoming Class A properties — luxury units that offer high-end amenities and charge higher rent prices — which are often out of reach for middle-income workforce renters.[2]

Without a full range of affordable housing options, many metro areas in the U.S. risk losing residents and families that are vital to the social, cultural, and economic fabric of their cities.

Fannie Mae, a leading source of multifamily mortgage financing, is working to find viable solutions to ease affordability challenges present in rental housing.

Fannie Mae’s Sponsor-Dedicated Workforce (SDW) initiative

Fannie Mae is in every market, and in 2024, more than 90% of the apartments financed were affordable to families earning at or below 120% of Area Median Income (AMI).

In 2023, Fannie Mae introduced the SDW initiative, a creative financing solution for conventional properties aimed at helping increase the availability of affordable rental housing for middle-income renters.

To qualify for SDW, multifamily property owners must elect rent restrictions on at least 20% of units, making them affordable to renters earning up to 80% of AMI. For residents in more cost-burdened areas, the affordability levels can extend to 100% or 120% of AMI. The features of SDW allow property owners to balance affordability with financial viability.

Benefits property owners realize under SDW are lower interest rates and streamlined underwriting standards, enabling more flexible financing structures to suit a specific property’s situation. These incentives encourage the development of affordable, quality rental housing for workforce residents in the communities the communities where they work and live.

Progress and impact: SDW in action

In Washington, DC, The Hale, a 500-unit, high-rise multifamily property in the NoMa neighborhood, combined SDW with a near-stabilization structure to refinance a construction loan into a permanent financing solution. As part of the agreement, 30% of the units are rent restricted — for those with incomes at 100% of AMI — for the loan’s duration. This ensures that a substantial portion of the property remains affordable to essential workers, helping provide critical workforce housing in the nation’s capital.

In Dallas, Texas, SDW has also made a significant impact. A 1980s 240-unit, garden-style apartment complex was acquired and extensively renovated, including interior, exterior, and amenity upgrades. SDW preserved rents on 20% of the units, for 80 % AMI renters, for the life of the loan This project not only enhances the quality of living for residents but also ensures that affordable housing remains a priority in the rapidly growing Dallas-Fort Worth metro area.

Looking ahead
By offering lower-cost financing and underwriting flexibility, SDW enables property owners to create and preserve rent on a significant number of units. This is particularly important for workforce renters in high-cost markets, where the gap between wages and housing costs is widening.

As it evolves, programs like SDW have the potential to help make a lasting and positive impact on the workforce housing shortage.

To learn more about SDW, visit Workforce Housing: Sponsor-Dedicated Workforce | Fannie Mae

[1] “American Housing Survey (AHS),” United States Census Bureau and the Department of Housing and Urban Development, last modified Oct. 23, 2024, https://www.census.gov/programs-surveys/ahs.html.
[2] Jack Robinson and Morgan Zollinger, “Missing Middle: Workforce and Affordable Housing in the US,” AFIR, Oct. 15, 2024,
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