Financial Modeling Innovations for Affordable Housing Development in the U.S.

• Author(s): Adetola Adewale Akinsulire ; Tochi Chimaobi Ohakawa
• Paper ID: 1708409
• Page: 396-415
• Published Date: 31-05-2021
• Published In: Iconic Research And Engineering Journals
• Publisher: IRE Journals
• e-ISSN: 2456-8880
• Volume/Issue: Volume 4 Issue 11 May-2021

Abstract

Affordable housing remains a critical challenge in the United States, exacerbated by rising construction costs, interest rate fluctuations, and limited funding sources. Innovative financial modeling techniques offer potential solutions by optimizing resource allocation, enhancing risk assessment, and improving investment decision-making. This study explores the application of advanced financial modeling methods—including machine learning algorithms, Monte Carlo simulations, and dynamic cash flow modeling—to support sustainable and cost-effective housing development.A key focus of this research is on integrating predictive analytics with traditional financial frameworks to enhance affordability assessments and mitigate financial risks associated with housing projects. The study examines the role of artificial intelligence (AI) and big data analytics in forecasting real estate market trends, optimizing mortgage structures, and assessing the financial viability of public-private partnerships (PPPs). By leveraging these innovations, policymakers and developers can create more efficient financing strategies that balance profitability with social impact.Additionally, this paper evaluates novel funding mechanisms such as impact investing, real estate investment trusts (REITs) with an affordable housing focus, and blockchain-based smart contracts for secure and transparent financial transactions. These emerging tools provide new opportunities for reducing financing bottlenecks while improving accessibility for low- and middle-income households. The research also highlights the potential of tax incentives, subsidies, and inclusionary zoning policies to complement financial modeling techniques and promote equitable housing development.The findings indicate that the implementation of data-driven financial models can enhance housing affordability by reducing funding inefficiencies and improving risk-adjusted returns for investors. Moreover, scenario-based financial modeling facilitates adaptive decision-making in response to economic fluctuations, ensuring long-term project sustainability. By integrating these financial innovations with existing housing policies, stakeholders can develop scalable and resilient housing solutions that address the pressing need for affordable living options in the U.S.

Keywords

Affordable housing, financial modeling, predictive analytics, impact investing, public-private partnerships, real estate market forecasting, AI in housing, Monte Carlo simulation, dynamic cash flow modeling, blockchain in real estate.

Citations

IRE Journals:
Adetola Adewale Akinsulire , Tochi Chimaobi Ohakawa "Financial Modeling Innovations for Affordable Housing Development in the U.S." Iconic Research And Engineering Journals Volume 4 Issue 11 2021 Page 396-415

IEEE:
Adetola Adewale Akinsulire , Tochi Chimaobi Ohakawa "Financial Modeling Innovations for Affordable Housing Development in the U.S." Iconic Research And Engineering Journals, 4(11)