Life insurers to create affordable housing investment vehicles

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What do you want to know

  • The new subsidiary will develop high quality fixed rate investment products.
  • Assets within the products could include multi-family rental properties and home ownership loans.
  • The affiliate is a product of ACLI’s Economic Empowerment and Racial Equity Initiative.

American life insurers hope to use some of their trillions of dollars in assets to help more people of color get affordable homes.

The American Council of Life Insurers announced last week that it would launch a nonprofit affordable housing investment partnership.

The partnership will use cash from 36 founding life insurer partners to develop affordable and sustainable housing, ACLI said.

The partnership will have a board of directors that will identify community development and affordable housing projects, and it will likely create opportunities for member insurers to invest in fixed-rate, high-quality, long-term investment instruments. that are suitable for investments by life insurers. wallets, ACLI added.

“No exact financial targets will be set for investments in partnership initiatives,” ACLI noted.

What this means

If the new partnership is successful, U.S. life insurers could end up investing less money in low-yielding financing for high-cost housing, often in waterfront areas vulnerable to flooding and windstorms, and more in affordable housing.

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