California’s affordable housing sector is preparing for a significant wave of refinancing, with Yardi Matrix data showing that about $860 million in commercial mortgages on fully affordable properties will mature in 2026. The volume of maturing debt is projected to increase sharply, reaching $6.9 billion by 2030 and totaling $13.3 billion over the next decade. In the next three years alone, California will need approximately $21 billion to address these maturities, particularly concentrated in major markets such as Los Angeles, the Bay Area, Orange County, and the San Fernando Valley.
Despite these challenges, experts say that widespread distress in the sector is unlikely. Affordable housing projects typically benefit from government-backed financing and subsidized revenue streams, which have historically helped keep default rates low. Additionally, recent federal policy changes under the One Big Beautiful Bill Act are expected to provide further stability. Updates to the Low-Income Housing Tax Credit (LIHTC) program are anticipated to make it easier for owners to recapitalize their properties through resyndication while supporting ongoing affordability.
Yardi’s findings are based on a national database covering 26,000 fully affordable properties—defined as those where at least 90 percent of units are rent-restricted through government programs—totaling about 3.5 million units.
Industry professionals remain optimistic about California’s ability to attract lenders due to strong rental demand and regulatory frameworks like the Community Reinvestment Act and mandates for Fannie Mae and Freddie Mac participation. David Lott of JLL noted that state-level measures such as the California Welfare Exemption and various soft subordinate debt programs also support refinancing efforts.
Lott pointed out a recent change reducing the LIHTC “50 percent test” threshold to 25 percent—a move designed to free up tax-exempt bond capacity and encourage both renovation and new development activity. Under this law, only a quarter of a property’s units must be affordable for it to qualify for certain bonds, compared with half previously.
From an employment perspective, Chris Papa of executive search firm Jackson Lucas said: “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,” he told Globest. “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.”
