The nation’s affordable-housing shortage is fueling a fast-growing corner of the municipal bond market, as lenders securitize portfolios of multifamily mortgages to free up capital for new loans. The structure, popularized by Citigroup Inc., allows issuers in the tax-exempt market to package mortgages across multiple properties rather than finance a single development, then sell the securities and recycle the capital into additional affordable-housing loans. Investors have been snapping up the bonds as they seek investment-grade debt with relatively wide spreads.

The surge reflects the deepening US housing crisis, particularly in cities like Oakland, California, where affordable housing projects are under construction. The securitization structure, pioneered by Citigroup, has gained traction among municipal issuers. According to a Bloomberg article by Miquéla V Thornton on August 13, 2026, the trend is expected to continue as demand for affordable housing persists and investors seek yield in a low-rate environment.