California faces a substantial affordable housing refinancing challenge, with approximately $860 million in commercial mortgages on fully affordable properties maturing in 2026, escalating to $6.9 billion by 2030 and $13.3 billion over the next decade, according to a report from Yardi Matrix.
The 2026 maturities are heavily concentrated in major metropolitan areas, with Los Angeles accounting for $390.3 million, the Bay Area for $223.1 million, Orange County for $64.1 million, and the San Fernando Valley for $75.95 million.
However, favorable interest rates offered by government programs, subsidized revenue streams, and longer loan terms typically associated with affordable housing financing have helped the sector avoid large-scale defaults.
And with recent provisions passed in the One Big Beautiful Bill Act (OBBBA), government programs designed to help support these projects should remain stable. For example, LIHTC enhancements within the OBBBA should increase the number of properties that can recapitalize through re-syndications, enabling capital improvements and long-term affordability preservation.
Yardi’s data comes from a database that defines affordable assets as those in which at least 90% of units are subject to rent limits due to government subsidies and includes 26,000 fully affordable properties totaling 3.5 million units.
All is not dire in these situations, agreed David Lott, Vice President, JLL.
He told GlobeSt.com that despite pressures from rising interest rates and increasing operational costs, including both controllable expenses and fixed obligations like taxes and insurance, California maintains a robust financing environment supported by strong rental demand, significant rent advantages, and regulatory requirements that drive lender participation.
These efforts are carried out through Community Reinvestment Act obligations and government-sponsored enterprise mandates for Fannie Mae and Freddie Mac.
The state's commitment to affordable housing through mechanisms like the California Welfare Exemption and various soft subordinate debt programs further strengthens refinancing prospects, Lott told GlobeSt.com.
“The recent reduction of the Low-Income Housing Tax Credit 50% test requirement to 25% promises to unlock what has historically been a constrained tax-exempt bond and LIHTC market, creating new opportunities for both renovation and new construction of affordable housing throughout the state,” Lott said.
From a recruiter’s perspective, affordable housing’s growing wave of loan maturities in California is less about distress and more about transition, according to Chris Papa, a founding partner at Jackson Lucas.
“Yes, refinancing will be more complicated in a higher-rate, higher-cost environment—but that pressure is precisely what’s driving demand for experienced talent,” Papa told GlobeSt.com.
“We’re seeing owners, lenders, and public agencies prioritize leaders who know how to navigate complex capital stacks, work with government programs, and stabilize assets through change.
“In short, the sector’s resilience is creating opportunity: organizations that invest in the right people now will be best positioned to manage maturities, unlock new financing, and protect long-term affordability.”
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