2 0 1 1  S E M I - A N N U A L  R E P O R T

     

Past performance is no guarantee of future results. Economic and market conditions change, and both will cause investment return, principal value, and yield to fluctuate so that a participant’s units, when redeemed, may be worth more or less than their original cost. Current performance may be higher or lower than the performance data quoted. Performance data current to the most recent month-end is available at www.aflcio-hit.com. Gross performance figures do not reflect the deduction of HIT expenses. Net performance figures reflect the deduction of HIT expenses and are the performance figures investors experience in the HIT. Information about HIT expenses can be found on page 1 of the HIT’s current prospectus. The Barclays Aggregate is an unmanaged index and is not available for direct investment, although certain funds attempt to replicate this index. Returns for the Barclays Aggregate would be lower if they reflected the actual trading costs or expenses associated with management of an actual portfolio.

Mid-Year Discussion of Fund Performance

PERFORMANCE OVERVIEW The AFL-CIO Housing Investment Trust (HIT) outperformed its benchmark, the Barclays Capital Aggregate Bond Index (Barclays Aggregate), on a gross and net basis for the first six months of 2011. The HIT’s year-to-date gross and net returns at June 30, 2011, exceeded the Barclays Aggregate by 40 and 17 basis points, respectively. For the six-month period ended June 30, the HIT’s returns were 3.12% on a gross basis and 2.89% on a net basis, compared to 2.72% for the benchmark. Investors benefited from the HIT’s specialization in government-insured and guaranteed multifamily mortgage-backed securities (MBS) and its focus on multifamily construction-related securities. Approximately 94% of the HIT portfolio at June 30 was AAA-rated or carried a U.S. government or government-sponsored enterprise guarantee, compared to approximately 76% in the benchmark. This specialization has enabled the HIT to generate higher income than the Barclays Aggregate without taking additional credit risk – while also creating union construction jobs and supporting economic recovery. Further, the HIT provides its investors diversification from many other fixed-income investments and equities since it does not invest in corporate bonds, but instead

substitutes multifamily MBS for corporate bonds and some U.S. Treasury and agency debt in the benchmark. SURPASSING 10,000 UNION JOBS By making $269 million of new commitments for five construction projects in the first half of the year, the HIT surpassed its goal of creating 10,000 union construction jobs – a goal set less than two years earlier in conjunction with the employment priorities of the AFL-CIO and the Building and Construction Trades Department, AFL-CIO. By mid-year, the Construction Jobs Initiative has generated 11,188 union jobs on 34 projects in 18 cities. The HIT has committed $963 million in financing for these projects, creating nearly $2 billion of development activity to build or preserve 12,752 housing and healthcare units. These investments are having a positive effect on the HIT’s portfolio returns. The benefit should continue as income is generated during the construction period and construction-related securities later convert to permanent financing. At a time when the construction industry has yet to show significant signs of recovery, these HIT investments are creating needed union construction work. They are also spurring secondary job creation and supporting economic development in communities around the U.S.

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MARKET ENVIRONMENT The HIT maintained its competitive performance in a six-month period marked by continuing weakness in the U.S. economy and instability in global markets. This was a period of slow GDP growth in the U.S., persistently high unemployment, and continuing difficulties in the housing market. Added to this were the worsening European sovereign debt crisis and worries about inflation in China and other emerging economies. These concerns dampened investors’ appetite for risk-taking, increasing the demand for U.S. Treasury securities and bringing interest rates lower. Despite elevated commodity prices, the Federal Reserve has not viewed inflation as a threat because of the high unemployment rate and overall weak domestic demand. The HIT’s performance benefited from its specialization in government/agency multifamily MBS, which generated additional income relative to Treasuries while reflecting similar credit quality. Treasury yields for maturities of two years and longer ended the six-month period 13 to 25 basis points lower than at the end of

2010, with significant volatility over the period as investors reacted to fluctuating economic indicators in the U.S. and political and economic instability abroad. The Barclays Aggregate’s returns benefited from corporate bonds’ excess returns of 72 basis points compared to Treasuries during the six-month period. These bonds, which the HIT does not hold, comprised nearly 20% of the benchmark at June 30.

“Your timing couldn’t possibly be better. The residential market had crashed. And your investment has been absolutely essential.”     —Michael Theriault,Secretary-Treasurer San Francisco Building and Construction Trades Council

 

The performance data quoted represents past performance and is no guarantee of future results. Investment results and principal value will fluctuate so that units in the HIT, when redeemed, may be worth more or less than the original cost. The HIT’s current performance may be higher or lower than the performance data quoted. Performance data current to the most recent month-end is available at www.aflcio-hit.com.

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WELL-POSITIONED FOR THE FUTURE The HIT is in a strong position to achieve competitive returns in the period ahead while also producing the important collateral benefits of affordable housing and union jobs. Direct sourcing of new investment opportunities under the Construction Jobs Initiative has not only added desirable income-producing construction-related securities to the HIT’s portfolio but has also produced a large pipeline of these investments for future funding. The HIT intends to use its expertise in Federal Housing Administration (FHA) programs to bring many of these projects to reality. Direct sourcing enables the HIT to offer customized financing terms to enhance returns relative to securities purchased from the secondary market. Further, these construction-related securities presently have wider spreads relative to Treasuries than other instruments of similar credit quality. They generate additional income as construction draws are funded. With its superior fundamentals, the HIT’s high credit quality portfolio is well structured to achieve higher income and higher credit quality with similar interest rate risk relative to the benchmark. At mid-year, the HIT had a yield advantage of 77 basis points relative to the benchmark. The HIT therefore remains an attractive investment choice for pension plans with union member beneficiaries.

“The job’s going great. I love my trade. I love coming to work.”  —Alfredo Longsworth, UA Local 1, New York City     City University of New York Graduate Center Housing Project

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Other Important Information

AVAILABILITY OF QUARTERLY PORTFOLIO SCHEDULE In addition to disclosure in the Annual and Semi-Annual Reports to Participants, the HIT also files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. The HIT’s reports on Form N-Q are made available on the SEC’s website at http://www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. (Information relating to the hours and operation of the SEC’s Public Reference Room may be obtained by calling 1-800-SEC-0330.) Participants may also obtain copies of the HIT’s Form N-Q reports, without charge, upon request, by calling the HIT collect at 202-331-8055. PROXY VOTING Except for its shares in its wholly-owned subsidiary, the HIT invests exclusively in non-voting securities and has not deemed it necessary to adopt policies and procedures for the voting of portfolio securities. During the most recent twelve-month period ended June 30, 2011, there were no proxy votes related to securities in the HIT portfolio. The HIT will report this information in its filing with the SEC on Form N-PX on August 31, 2011. After that date, this filing will be available on the SEC’s website at http://www.sec.gov. Participants may also obtain a copy of the HIT’s report on Form N-PX, without charge, upon request, by calling the HIT collect at 202-331-8055. EXPENSE EXAMPLE Participants in the HIT incur ongoing expenses related to the management and distribution activities of the HIT, as

well as certain other expenses. This example is intended to help participants understand the ongoing costs (in dollars) of investing in the HIT and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period, January 1, 2011, and held for the entire period ended June 30, 2011. Actual Expenses: The first line of the table below providesinformation about actual account values and actual expenses. Participants may use the information in this line, together with the amount they invested, to estimate the expenses that they paid over the period. Simply divide the account value by $1,000 (for example, an $800,000 account value divided by $1,000 = 800), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Six-Month Period Ended June 30, 2011” to estimate the expenses paid on a particular account during this period. Hypothetical Expenses (for Comparison Purposes Only): The second line of the table below provides informationabout hypothetical account values and hypothetical expenses based on the HIT’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the HIT’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses a participant paid for the period. Participants may use this information to compare the ongoing costs of investing in the HIT and other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other mutual funds. Please note that the HIT charges no transactional costs, such as sales charges (loads) or redemption fees.

	Beginning	Ending	Expenses Paid
			During Six-Month
	Account Value	Account Value	Period Ended
	January 1, 2011	June 30, 2011	June 30, 2011*
Actual expenses	$ 1,000.00	$ 1,028.90	$ 2.31
Hypothetical expenses (5% return before expenses)	$ 1,000.00	$ 1,022.51	$ 2.31

*Expenses are equal to the HIT’s annualized expense ratio of 0.46 %, as of June 30, 2011, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

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Statement of Assets and Liabilities
June 30, 2011 (Dollars in thousands; unaudited)
ASSETS
Investments, at value (cost $3,710,803)	$	3,879,290
Cash and cash equivalents		150,121
Accrued interest receivable		15,829
Receivables for investments sold		250
Other assets		1,852
Total assets		4,047,342
LIABILITIES
Payables for investments purchased		62,330
Redemptions payable		3,105
Income distribution payable, net of dividends reinvested of $11,610		1,398
Refundable deposits		944
Accrued expenses		3,308
Total liabilities		71,085
NET ASSETS APPLICABLE TO PARTICIPANTS’ EQUITY
Certificates of participation — authorized unlimited;
Outstanding 3,477,252 units	$	3,976,257
NET ASSET VALUE PER UNIT OF PARTICIPATION (IN DOLLARS)	$	1,143.51
PARTICIPANTS’ EQUITY
Participants’ equity consisted of the following:
Amount invested and reinvested by current participants	$	3,798,893
Net unrealized appreciation of investments		168,487
Distribution in excess of net investment income		(2,873)
Accumulated net realized gains on investments		11,750
Total participants’ equity	$	3,976,257
See accompanying Notes to Financial Statements.

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Schedule of Portfolio Investments
June 30, 2011 (Dollars in thousands; unaudited)
FHA Permanent Securities (3.3% of net assets)
	Interest Rate	Maturity Date	Face Amount		Amortized Cost			Value
Single Family	7.75%	Jul-2021	$	20	$	20	$	20
Multifamily1	5.25%	Mar-2024		4,210		4,209		4,399
	5.35%	Mar-2047		7,775		7,786		8,187
	5.55%	Aug-2042		8,577		8,574		9,102
	5.60%	Jun-2038		2,707		2,705		2,804
	5.62%	Jun-2014		326		325		338
	5.65%	Oct-2038		2,088		2,140		2,194
	5.87%	Jun-2044		1,893		1,892		2,022
	5.89%	Apr-2038		5,071		5,083		5,434
	6.02%	Jun-2035		5,932		5,919		6,373
	6.40%	Jul-2046		3,989		3,987		4,307
	6.60%	Jan-2050		3,487		3,530		3,781
	6.66%	May-2040		5,507		5,494		5,512
	6.70%	Dec-2042		5,801		5,786		6,075
	6.75%	Apr-2040 - Jul-2040		5,200		5,167		5,687
	6.88%	Apr-2031		26,387		26,066		26,388
	7.05%	Jul-2043		5,164		5,164		5,541
	7.13%	Mar-2040		7,578		7,533		8,338
	7.20%	Dec-2033 - Oct-2039		9,503		9,472		10,330
	7.50%	Sep-2032		1,514		1,507		1,695
	7.75%	Oct-2038		1,343		1,332		1,346
	7.93%	Apr-2042		2,813		2,813		3,184
	8.15%	Mar-2037		1,143		1,242		1,146
	8.27%	Jun-2042		2,468		2,468		2,587
	8.40%	Apr-2012		64		64		64
	8.75%	Aug-2036		3,556		3,540		3,565
				124,096		123,798		130,399
Forward Commitments1	5.80%	Mar-2052		-		(11)		66
Total FHA Permanent Securities			$	124,116	$	123,807	$	130,485

FHA Construction Securities (0.3% of net assets)
	Interest Rates2			Commitment
	Permanent	Construction	Maturity Date	Amount		Face Amount		Amortized Cost			Value
Multifamily1	6.20%	6.20%	Aug-2051	$	11,900	$	11,900	$	11,895	$	12,799
Total FHA Construction Securities				$	11,900	$	11,900	$	11,895	$	12,799

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Schedule of Portfolio Investments
June 30, 2011 (Dollars in thousands; unaudited)
Ginnie Mae Securities (23.2% of net assets)
	Interest Rate	Maturity Date	Commitment Amount		Face Amount	Amortized Cost			Value
Single Family	4.00%	Feb-2040 - Jun-2040	$	-	$ 19,366	$	19,699	$	19,770
	4.50%	Aug-2040		-	14,438		14,877		15,267
	5.50%	Jan-2033 - Jun-2037		-	15,735		15,652		17,372
	6.00%	Jan-2032 - Aug-2037		-	8,757		8,759		9,770
	6.50%	Jul-2028		-	119		119		135
	7.00%	Nov-2016 - Jan-2030		-	3,358		3,388		3,814
	7.50%	Apr-2013 - Aug-2030		-	2,441		2,473		2,753
	8.00%	Jun-2023 - Nov-2030		-	1,315		1,344		1,515
	8.50%	Jun-2022 - Aug-2027		-	1,234		1,256		1,415
	9.00%	May-2016 - Jun-2025		-	377		383		432
	9.50%	Sep-2021 - Sep-2030		-	138		141		160
	10.00%	Jun-2019		-	1		1		1
	13.25%	Dec-2014		-	1		1		1
				-	67,280		68,093		72,405
Multifamily1	2.11%	Apr-2033		-	25,000		25,250		25,202
	2.34%	Aug-2034		-	24,842		25,072		25,247
	2.41%	May-2030		-	13,577		13,712		13,833
	3.12%	Apr-2038		-	4,867		5,048		5,037
	3.17%	Oct-2043		-	39,838		40,498		41,131
	3.30%	Jul-2046		-	9,490		9,585		9,343
	3.31%	Nov-2037		-	19,709		20,652		20,497
	3.49%	Mar-2042		-	10,000		10,051		9,884
	3.52%	Nov-2046		-	17,600		17,776		17,283
	3.61%	Nov-2027		-	4,134		4,209		4,202
	3.67%	Oct-2043		-	25,000		25,263		25,627
	3.90%	Dec-2039		-	3,600		3,642		3,660
	3.99%	Feb-2039		-	1,416		1,344		1,462
	4.15%	Apr-2046		-	8,483		8,652		8,869
	4.22%	Nov-2035		-	24,248		24,907		25,712
	4.26%	Jul-2029		-	2,049		2,043		2,113
	4.43%	Apr-2034		-	5,606		5,535		5,695
	4.43%	Jun-2034		-	82,518		80,993		87,574
	4.49%	Apr-2023		-	1,031		1,031		1,031
	4.59%	Sep-2034		-	9,000		9,289		9,632
	4.63%	Sep-20373		-	1,500		1,458		1,333
	4.66%	Apr-2029 - Aug-2032		-	22,610		23,089		23,457
	4.70%	Dec-2024		-	5,066		4,982		5,172
	4.71%	May-2025		-	4,312		4,305		4,332
	4.73%	Nov-2045		-	3,000		3,057		3,195
	4.76%	Apr-2045		-	7,950		8,294		8,433
	4.82%	Oct-2029		-	4,100		4,322		4,285
	4.83%	May-20463		-	5,355		5,355		4,791
	4.88%	Mar-2036		-	3,398		3,354		3,448
	4.90%	Mar-20443		-	1,000		990		909

                                                        (continued, nextpage)

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Schedule of Portfolio Investments
June 30, 2011 (Dollars in thousands; unaudited)
Ginnie Mae Securities (23.2% of net assets),continued
	Interest Rate	Maturity Date	Commitment Amount		Face Amount		Amortized Cost			Value
	4.92%	Feb-2034	$	-	$	1,122	$	1,112	$	1,129
	4.92%	May-2034		-		45,000		44,845		47,817
	4.94%	Jun-20463		-		3,835		3,839		3,733
	4.97%	Feb-2037		-		10,000		10,152		10,905
	4.99%	Mar-2030		-		9,750		10,550		10,586
	5.00%	Dec-2033		-		4,883		4,917		4,893
	5.01%	Mar-2038		-		25,000		26,093		26,942
	5.05%	Apr-20493		-		2,910		2,916		2,649
	5.15%	Jun-2023		-		29,166		29,420		29,879
	5.17%	Sep-2045		-		50,000		53,440		54,322
	5.19%	May-2045		-		8,865		8,651		9,716
	5.25%	Feb-2031		-		37,236		37,126		37,236
	5.30%	Apr-2039		-		16,582		16,336		17,536
	5.32%	Aug-2030		-		10,508		10,468		10,849
	5.34%	Jul-2040		-		18,000		17,686		19,299
	5.50%	Sep-2023 - Jul-2033		-		12,762		13,235		13,170
	5.55%	May-20493		-		10,555		10,559		9,470
	5.58%	May-2031		-		80,583		81,125		88,586
	5.58%	Oct-2031		-		14,000		13,744		15,384
	5.68%	Jul-2027		-		10,464		10,434		10,948
	6.22%	Aug-2035		-		13,883		13,885		15,467
	6.26%	Apr-2027		-		8,367		8,807		8,803
				-		813,770		823,098		851,708
Forward Commitments1	4.42%	Feb-2031		37,236		-		279		698
Total Ginnie Mae Securities			$	37,236	$	881,050	$	891,470	$	924,811

Ginnie Mae Construction Securities (6.8% of net assets)

	Interest Rates2				Commitment
	Permanent	Construction		Maturity Date	Amount		Face Amount		Amortized Cost			Value
Multifamily1	3.40%		3.40%	Apr-2017	$	2,250	$	2,250	$	2,249	$	2,308
	4.49%		8.25%	Jun-2052		44,954		23,526		23,089		26,352
	4.75%		4.75%	Mar-20523		32,463		15,802		15,820		17,471
	4.75%		6.50%	Oct-2051		63,132		59,711		59,717		64,245
	4.80%		4.80%	Feb-2052		11,940		8,249		8,627		9,035
	4.86%		4.86%	Jan-2053		42,358		5,980		6,303		7,799
	4.87%		4.87%	Apr-2042		100,000		52,488		53,368		58,848
	4.98%		4.98%	Feb-2052		4,700		100		245		408
	5.00%		5.00%	Nov-2051		13,543		8,796		9,067		9,818
	5.10%		7.00%	Dec-20503		15,862		4,226		4,064		5,198
	5.21%		4.95%	Mar-20533		49,950		23,808		23,833		26,657
	5.25%		5.25%	Apr-2037		19,750		19,750		19,742		20,325
	5.39%		5.39%	Feb-2052		26,094		14,838		15,366		17,045
	6.15%		6.15%	Nov-2039		5,508		5,150		5,163		5,741
						432,504		244,674		246,653		271,250

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Schedule of Portfolio Investments
June 30, 2011 (Dollars in thousands; unaudited)
Ginnie Mae Construction Securities (6.8% of net assets), continued
	Interest Rates2			Commitment
	Permanent	Construction	Maturity Date	Amount	Face Amount	Amortized Cost	Value

Forward Commitments1	4.15%	4.15%	Dec-2053	$	70,000	$	-	$	1,400	$	(2,492)
	5.35%	6.75%	May-2051		635		-		6		47
					70,635		-		1,406		(2,445)
Total Ginnie Mae Construction Securities				$	503,139	$	244,674	$	248,059	$	268,805

Fannie Mae Securities (42.5% of net assets)
				Commitment				Amortized
	Interest Rate	Maturity Date		Amount		Face Amount		Cost			Value
Single Family	0.44%	4	Mar-2037	$	-	$	3,072	$	3,027	$	3,049
	0.59%	4	Apr-2037		-		5,225		5,197		5,175
	0.69%	4	Dec-2040		-		63,143		62,574		62,735
	2.05%	4	Nov-2033		-		6,009		6,014		6,262
	2.11%	4	Aug-2033		-		347		346		360
	2.31%	4	May-2033		-		1,441		1,449		1,500
	2.37%	4	Apr-2034		-		2,950		3,060		3,073
	2.39%	4	Nov-2034		-		3745		3,885		3,903
	2.41%	4	Sep-2035		-		1,509		1,503		1,575
	2.55%	4	Aug-2033		-		4,735		4,724		4,953
	2.59%	4	Aug-2033		-		2,107		2,104		2,206
	2.62%	4	Jul-2033		-		1,233		1,224		1,282
	2.64%	4	Jul-2033		-		4,924		4,950		5,156
	4.00%	Jul-2024 - Jan-2041			-		137,059		139,673		138,506
	4.50%	Jun-2018 - Sep-2040			-		113,757		116,527		119,255
	5.00%	Jul-2018 - Apr-2041			-		129,422		133,894		137,760
	5.50%	Jul-2017 - Jun-2038			-		93,760		94,627		101,795
	6.00%	Apr-2016 - Nov-2038			-		71,431		72,275		78,764
	6.50%	Nov-2016 - Jul-2036			-		8,420		8,680		9,439
	7.00%	Nov-2013 - May-2032			-		3,370		3,386		3,801
	7.50%	Nov-2016 - Sep-2031			-		1,306		1,287		1,471
	8.00%	Jun-2012 - May-2031			-		293		295		322
	8.50%	Jan-2012 - Apr-2031			-		370		371		407
	9.00%	Jan-2024 - May-2025			-		135		136		154
					-		659,763		671,208		692,903
Multifamily1	3.59%	4	Apr-2020		-		9,249		9,250		9,226
	3.82%		Jul-2016		-		21,403		21,465		22,687
	4.06%		Oct-2025		-		26,668		26,995		26,078
	4.06%	4	Jun-2020		-		3,831		3,840		3,820
	4.15%		Jun-2021		-		9,600		9,695		9,867
	4.22%		Jul-2018		-		3,351		3,242		3,573
	4.25%		May-2021		-		4,496		4,518		4,654
	4.27%		Nov-2019		-		6,371		6,414		6,709

                                               (continued, nextpage)

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Schedule of Portfolio Investments
June 30, 2011 (Dollars in thousands; unaudited)
Fannie Mae Securities (42.5% of net assets),continued
		Commitment
Interest Rate	Maturity Date		Amount	Face Amount		Amortized Cost			Value
4.32%	Nov-2019	$	-	$	3,152	$	3,189	$	3,323
4.33%	Nov-2019 - Mar-2021		-		26,377		26,517		27,532
4.38%	Apr-2020		-		10,828		11,006		11,367
4.44%	May-2020		-		6,408		6,481		6,750
4.48%	Oct-2031		-		2,911		2,910		2,956
4.49%	Jun-2021		-		1,031		1,064		1,081
4.50%	Feb-2020		-		4,467		4,515		4,708
4.52%	Nov-2019 - May-2021		-		7,567		7,758		7,996
4.55%	Nov-2019		-		2,993		3,033		3,190
4.56%	Jul-2019 - May-2021		-		8,868		8,921		9,459
4.64%	Aug-2019		-		19,000		19,395		20,327
4.66%	Jul-2021 - Sep-2033		-		7,975		8,039		8,406
4.67%	Aug-2033		-		9,600		9,579		10,132
4.68%	Jul-2019		-		13,871		13,977		14,881
4.69%	Jan-2020		-		14,050		14,088		14,990
4.71%	Mar-2021		-		6,182		6,405		6,557
4.73%	Feb-2021		-		1,616		1,668		1,717
4.80%	Jun-2019		-		2,272		2,297		2,447
4.86%	May-2019		-		1,519		1,543		1,642
4.89%	Nov-2019 - May-2021		-		2,840		2,999		3,044
4.93%	Nov-2013		-		45,297		45,133		48,224
4.94%	Apr-2019		-		3,500		3,563		3,785
5.00%	Jun-2019		-		1,977		2,013		2,145
5.02%	Jun-2019		-		858		861		933
5.04%	Jun-2019		-		1,953		2,011		2,125
5.05%	Jun-2019 - Jul-2019		-		3,318		3,412		3,611
5.07%	Feb-2012		-		2,705		2,773		2,712
5.08%	Apr-2021		-		40,000		40,004		42,203
5.09%	Jun-2018		-		6,623		6,827		7,224
5.11%	Jul-2019		-		914		920		994
5.12%	Jul-2019		-		9,086		9,184		9,888
5.13%	Jul-2019		-		928		935		1,011
5.15%	Oct-2022		-		3,875		3,881		4,148
5.16%	Jan-2018		-		5,417		5,344		5,938
5.25%	Jan-2020		-		7,091		7,097		7,727
5.29%	May-2022		-		5,400		5,400		5,797
5.34%	Apr-2016		-		6,293		6,268		6,952
5.35%	Apr-2012 - Jun-2018		-		2,342		2,348		2,545
5.36%	Feb-2016		-		5,000		5,006		5,255
5.37%	Jun-2017		-		1,436		1,525		1,580
5.43%	Nov-2018		-		1,298		1,293		1,302
5.44%	Mar-2016		-		3,712		3,724		4,117
5.45%	May-2033		-		3,020		3,044		3,265
5.46%	Feb-2017		-		46,853		47,050		52,047
5.47%	Aug-2024		-		8,609		8,738		9,300
5.52%	Mar-2018		-		603		636		669

                                               (continued, nextpage)

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Schedule of Portfolio Investments

June 30, 2011 (Dollars in thousands; unaudited)

Fannie Mae Securities (42.5% of net assets),continued

		Commitment
Interest Rate	Maturity Date		Amount	Face Amount		Amortized Cost			Value
5.53%	Apr-2017	$	-	$	64,401	$	64,201	$	71,559
5.59%	May-2017		-		7,114		7,102		7,924
5.60%	Feb-2018 - Jan-2024		-		11,895		11,865		12,853
5.63%	Dec-2019		-		10,795		10,862		11,925
5.69%	Jun-2041		-		5,013		5,195		5,456
5.70%	Jun-2016		-		1,403		1,415		1,565
5.75%	Jun-2041		-		2,428		2,529		2,640
5.80%	Jun-2018		-		70,680		70,312		78,776
5.86%	Dec-2016		-		262		263		291
5.91%	Mar-2037		-		2,077		2,134		2,255
5.92%	Dec-2016		-		249		250		276
5.93%	Apr-2012		-		1,231		1,278		1,249
5.96%	Jan-2029		-		440		445		484
6.03%	Jun-2017 - Jun-2036		-		5,572		5,679		6,187
6.06%	Jul-2034		-		9,991		10,320		10,970
6.11%	Aug-2017		-		6,815		6,836		7,684
6.13%	Dec-2016		-		3,502		3,535		3,949
6.14%	Sep-2033		-		305		325		338
6.15%	Jul-2019 - Oct-2032		-		41,251		41,307		46,123
6.16%	Aug-2013		-		2,105		2,137		2,112
6.19%	Jul-2013		-		5,000		5,119		5,159
6.22%	Aug-2032		-		1,780		1,825		1,976
6.23%	Sep-2034		-		1,457		1,528		1,604
6.27%	Jan-2012		-		1,991		1,960		1,997
6.28%	Nov-2028		-		3,114		3,310		3,453
6.35%	Jun-2020 - Aug-2032		-		13,541		13,729		14,771
6.38%	Jul-2021		-		5,651		5,754		6,277
6.39%	Apr-2019		-		966		995		1,088
6.44%	Apr-2014		-		38,120		38,120		43,110
6.44%	Dec-2018		-		5,793		5,898		6,424
6.52%	May-2029		-		5,517		6,004		6,155
6.63%	Jun-2014 - Apr-2019		-		3,757		3,757		4,174
6.80%	Jul-2016		-		567		567		636
6.85%	Aug-2014		-		42,723		42,723		47,893
6.88%	Feb-2028		-		4,533		4,938		4,841
7.00%	Jun-2018		-		2,983		2,983		3,295
7.01%	Apr-2031		-		3,287		3,303		3,715
7.07%	Feb-2031		-		16,550		16,781		18,720
7.18%	Aug-2016		-		359		359		405
7.20%	Aug-2029		-		8,257		8,050		9,153
7.25%	Jul-2012		-		6,870		6,870		6,968
7.26%	Dec-2018		-		9,911		10,437		11,270
7.50%	Dec-2014		-		955		949		1,054
7.75%	Dec-2012 - Dec-2024		-		2,043		2,042		2,293
8.13%	Sep-2012		-		538		538		546
8.38%	Jan-2022		-		795		792		799

                                               (continued, nextpage)

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Schedule of Portfolio Investments

June 30, 2011 (Dollars in thousands; unaudited)

Fannie Mae Securities (42.5% of net assets),continued
	Interest Rate	Maturity Date	Commitment    Amount	Face Amount		Amortized Cost			Value
	8.40%	Jul-2023	$        -	$           451		$	442		$              504
	8.50%	Nov-2019	-		3,264		3,365			3,882
	8.63%	Sep-2028	-		6,300		6,300			7,073
			-		901,206		907,221		978,467
Forward Commitments1	3.66%	Aug-2021	134,000		-		670		(1,082)
TBA5	4.00%	Jul-2041	-		20,000		20,167		20,006
			134,000		20,000		20,837		18,924
Total Fannie Mae Securities			$  134,000	$ 1,580,969		$	1,599,266	$   1,690,294

Freddie Mac Securities (10.7% of net assets)
	Interest Rate	Maturity Date		Commitment Amount			Face Amount	Amortized Cost			Value
Single Family	0.49% 4	Feb-2036		$	-	$	8,463	$	8,463	$		8,474
	0.54% 4	Apr-2036			-		5,621		5,614			5,593
	0.69% 4	Nov-2040			-		43,367		43,055			43,086
	2.14% 4	Apr-2035			-		98		98			101
	2.47% 4	Jun-2033			-		1,258		1,254			1,317
	2.49% 4	Oct-2033			-		2,850		2,817			2,984
	2.80% 4	Jul-2035			-		709		706			743
	4.00%	Dec-2024 - Jan-2041			-		79,511		80,750			80,477
	4.50%	Aug-2018 - Sep-2040			-		40,451		40,601			42,213
	5.00%	Jan-2019 - Mar-2041			-		58,260		58,224			62,054
	5.50%	Oct-2017 - Jul-2038			-		71,662		70,831			77,583
	6.00%	Mar-2014 - Feb-2038			-		39,845		40,508		43,992
	6.50%	Oct-2013 - Nov-2037			-		15,328		15,892		17,198
	7.00%	Dec-2011 - Mar-2030			-		341		324			372
	7.50%	Sep-2012 - Apr-2031			-		336		324			379
	8.00%	Jul-2012 - Feb-2030			-		120		117			132
	8.50%	Jun-2015 - Jan-2025			-		220		221			252
	9.00%		Mar-2025		-		109		109			126
							368,549	369,908			387,076
Multifamily1	5.38%		Dec-2028		-		20,000		20,004			20,754
	5.42%		Apr-2016		-		10,000		9,945			10,966
	5.65%		Apr-2016		-		7,449		7,419			8,071
							37,449		37,368			39,791
Forward Commitments1	2.95%		Aug-2017		2,585		-		(84)			(16)
Total Freddie Mac Securities				$	2,585	$	405,998	$     407,192		$	426,851

Commercial Mortgage-Backed Securities1(0.6% of net assets)
Issuer	Interest Rate	Maturity Date		Face Amount	Amortized Cost			Value
Deutsche Bank	5.00%		Nov-2046	$  18,990	$	19,555	$	19,631
Mizuho	6.58%		Mar-2034	5,100		5,224		5,081
Total Commercial Mortgage-Backed Securities				$  24,090	$	24,779	$	24,712

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Schedule of Portfolio Investments

June 30, 2011 (Dollars in thousands; unaudited)

State Housing Finance Agency Securities (4.4% of net assets)
		Interest Rates2			Commitment			Face		Amortized
	Issuer	Permanent	Construction	Maturity Date	Amount			Amount			Cost		Value
Multifamily1	NYC Housing Development Corp	-	2.00%	Sep-2013	$	-	$		7,500	$	7,500	$	7,514
	NYC Housing Development Corp	-	3.45%	May-2013		-			9,500		9,516		9,504
	MA Housing Finance Agency	-	3.85%	Dec-2012 6		13,500			9,710		9,707		9,710
	MA Housing Finance Agency	-	4.15%	Dec-2013 6		26,700			3,530		3,527		3,524
	NYC Housing Development Corp	4.25%	-	Nov-2025		-			1,150		1,150		1,152
	NYC Housing Development Corp	4.40%	-	Nov-2024		-			4,120		4,120		4,112
	MA Housing Finance Agency	-	4.45%	Dec-2011 6		-		30,610			30,612		30,614
	NYC Housing Development Corp	4.50%	-	Nov-2030		-			1,680		1,682		1,667
	NYC Housing Development Corp	4.60%	-	Nov-2030		-			4,665		4,665		4,623
	NYC Housing Development Corp	4.70%	-	Nov-2035		-			1,685		1,685		1,619
	NYC Housing Development Corp	4.80%	-	Nov-2040		-			2,860		2,862		2,785
	NYC Housing Development Corp	4.90%	-	Nov-2034 - Nov-2041		-			8,800		8,800		8,677
	NYC Housing Development Corp	4.95%	-	Nov-2039 - May-2047		-		13,680			13,683		13,248
	NYC Housing Development Corp	5.55%	-	Nov-2039		-			5,000		4,979		5,055
	NYC Housing Development Corp	5.69%	-	Nov-2018		-			6,275		6,279		6,680
	MA Housing Finance Agency	5.70%	-	Jun-2040		-		14,540			14,543		14,276
	MA Housing Finance Agency	5.92%	-	Dec-2037		-			6,425		6,428		6,290
	NYC Housing Development Corp	6.42%	-	Nov-2039		-		22,000			22,000		22,002
	MA Housing Finance Agency	6.50%	-	Dec-2039		-			745		749		696
	MA Housing Finance Agency	6.58%	-	Dec-2039		-		11,385			11,386		11,274
	MA Housing Finance Agency	6.70%	-	Jun-2040		-		11,855			11,855		11,139
						40,200		177,715			177,728		176,161
Forward Commitments1	MA Housing Finance Agency	-	4.30%	Jun-2015		34,700			-		(88)		(123)
	MA Housing Finance Agency	-	4.37%	Jun-2014		23,500			-		(59)		(65)
						58,200			-		(147)		(188)
Total State Housing Finance Agency Securities					$	98,400	$	177,715		$ 177,581		$	175,973

Other Multifamily Investments (0.4% of net assets)
	Interest Rates2                   Permanent                             Construction		Maturity Date	Commitment Amount		Face Amount		Amortized Cost				Value
Multifamily Construction/Permanent Mortgages1
	8.63%	-	Jun-2025	$	1,469	$	1,117		$	1,113	$	1,110
Privately Insured Construction/Permanent Mortgages1,7
	5.40%	-	Mar-2047		9,000		8,696			8,704		7,375
	5.73%	-	Aug-2047		5,575		5,421			5,422		4,643
	6.20%	-	Dec-2047		3,325		3,252			3,269		2,851
	6.40%	6.40%	Nov-2048		993		977			993		851
					18,893		18,346			18,388		15,720
Total Other Multifamily Investments				$	20,362	$	19,463		$	19,501	$	16,830

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Schedule of Portfolio Investments
June 30, 2011 (Dollars in thousands; unaudited)
United States Treasury Securities (4.6% of net assets)
Interest Rate	Maturity Date	Face Amount		Amortized Cost		Value
1.88%	Jun-2015	$	25,000	$	25,082	$	25,589
2.00%	Jan-2016		20,000		19,852		20,391
2.63%	Nov-2020		15,000		14,597		14,447
3.13%	May-2021		50,000		50,490		49,863
3.50%	May-2020		25,000		25,970		26,103
3.63%	Feb-2021		45,000		46,261		46,927
Total United States Treasury Securities		$	180,000	$	182,252	$	183,320
Total Fixed-Income Investments		$	3,649,975	$	3,685,802	$	3,854,880

Equity Investment in Wholly-Owned Subsidiary (0.0% of net assets)

		Face Amount		Amount of Dividends
Issuer	Number of Shares		(Cost)	or Interest			Value
Building America CDE, Inc.8	1,000	$	1	$	-	$	(590)
Total Equity Investment	1,000	$	1	$	-	$	(590)
		Face Amount		Amortized Cost			Value
Total Fixed-Income and Equity Investments		$	3,649,976	$	3,685,803	$	3,854,290

Short-Term Investment (0.6% of net assets)

Commercial Paper	Interest Rate	Maturity Date	Face Amount		Amortized Cost			Value
Societe Generale	0.03%	July 1, 2011	$	25,000	$	25,000	$	25,000
Total Short-Term Investments			$	25,000	$	25,000	$	25,000
			Face Amount		Amortized Cost			Value
Total Investments			$	3,674,976	$	3,710,803	$	3,879,290

	Footnotes
1	Valued by the HIT’s management in accordance with the fair value procedures adopted by the HIT’s Board of Trustees.
2	Construction interest rates are the rates charged to the borrower during the construction phase of the project.The permanent interest rates are charged to the
	borrower during the amortization period of the loan, unless the U.S. Department of Housing and Urban Development requires that such rates be charged earlier.
3	Tax-exempt bonds collateralized by Ginnie Mae securities.
4	The coupon rate shown on floating or adjustable rate securities represents the rate at period end.
5	Represents to be announced (TBA) securities: the particular securities to be delivered are not identified at the trade date. However, delivered securities must meet
	specified terms, including issuer, rate, and mortgage term, and be within industry-accepted “good delivery” standards. Until settlement, the HIT maintains cash
	reserves and liquid assets sufficient to settle its TBA commitments.

6  Security exempt from registration under the Securities Act of 1933. The construction notes were privately placed directly by MassHousing (a not-for-profit publicagency) with the HIT. The notes are for construction only and will mature on or prior to December 1, 2013. The notes are general obligations of MassHousing and are secured by the full faith and credit of MassHousing. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. These securities are considered liquid, under procedures established by and under the general supervision of the HIT’s Board of Trustees.

7  Loans insured by Ambac Assurance Corporation, which are additionally backed by repurchase option from the mortgagee for the benefit of the HIT. Therepurchase option can be exercised by the HIT in the event of a payment failure by Ambac Assurance Corporation.

8  In July 2010, the HIT acquired the shares of Building America CDE, Inc. (BACDE), a wholly-owned subsidiary of the HIT formed to help generate potentialinvestments, principally through New Markets Tax Credit transactions. The fair value, determined in good faith under consistently applied procedures adopted by the HIT’s Board of Trustees, currently represents the net asset value of BACDE. These securities are considered illiquid.

See accompanying Notes to Financial Statements.

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Statement of Operations
For the Six Months Ended June 30, 2011 (Dollars in thousands; unaudited)
INVESTMENT INCOME	$	85,148
EXPENSES
Non-officer salaries and fringe benefits		4,329
Officer salaries and fringe benefits		1,940
Legal fees		200
Consulting fees		293
Auditing, tax and accounting fees		195
Insurance		166
Marketing and sales promotion (12b-1)		237
Investment management		408
Trustee expenses		32
Rental expenses		466
General expenses		796
Total expenses		9,062
NET INVESTMENT INCOME		76,086
Net realized gain on investments		22,513
Net change in unrealized appreciation on investments		14,196
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS		36,709
NET INCREASE IN NET ASSETS FROM OPERATIONS	$	112,795

See accompanying Notes to Financial Statements.

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Statements of Changes in Net Assets
(Dollars in thousands)
	Six Months Ended		Year Ended
	June 30, 2011		December 31, 2010
INCREASE IN NET ASSETS FROM OPERATIONS	(unaudited)
Net investment income	$	76,086	$	156,440
Net realized gain on investments		22,513		13,686
Net change in unrealized appreciation on investments		14,196		53,641
Net increase in net assets resulting from operations		112,795		223,767
DECREASE IN NET ASSETS FROM DISTRIBUTIONS
Distributions to participants or reinvested from:
Net investment income		(78,893)		(161,898)
Net decrease in net assets from distributions		(78,893)		(161,898)
INCREASE (DECREASE) IN NET ASSETS FROM UNIT TRANSACTIONS
Proceeds from the sale of units of participation		63,356		166,042
Dividend reinvestment of units of participation		70,307		144,935
Payments for redemption of units of participation		(81,147)		(106,444)
Net increase from unit transactions		52,516		204,533
Total increase in net assets		86,418		266,402
NET ASSETS
Beginning of period	$	3,889,839	$	3,623,437
End of period	$	3,976,257	$	3,889,839
Distribution in excess of net investment income	$	(2,873)	$	(2,893)
UNIT INFORMATION
Units sold		55,762		146,163
Distributions reinvested		61,731		126,833
Units redeemed		(70,978)		(92,808)
Increase in units outstanding		46,515		180,188

See accompanying Notes to Financial Statements.

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Notes to Financial Statements

(unaudited)

Note 1. Summary of Significant Accounting Policies

The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) Housing Investment Trust (HIT) is a common law trust created under the laws of the District of Columbia and is registered under the Investment Company Act of 1940, as amended (the Investment Company Act), as a no-load, open-end investment company.The HIT has obtained certain exemptions from the requirements of the Investment Company Act that are described in the HIT’s Prospectus and Statement of Additional Information.

In July 2010, the HIT acquired the shares of Building America CDE, Inc. (BACDE), a wholly-owned subsidiary of the HIT formed to generate potential investments, principally through New Markets Tax Credit (NMTC) transactions. BACDE has been certified as a Community Development Entity by the Community Development Financial Institutions Fund and has received a $35 million allocation as part of the 2010 NMTC allocation round.

Participation in the HIT is limited to pension plans and eligible labor organizations, including health and welfare, annuity, general and other funds, that have beneficiaries who are represented by labor organizations.

The following is a summary of significant accounting policies followed by the HIT in the preparation of its financial statements.The policies are in conformity with generally accepted accounting principles (GAAP) in the United States.

Investment Valuation

Net asset value per share (NAV) is calculated as of the close of business of the major bond markets in NewYork City on the last business day of the month. A description of the valuation techniques applied to the HIT’s major categories of assets and liabilities measured at fair value on a recurring basis follows.

Portfolio securities for which market quotations are readily available (U.S. Treasury securities, government-sponsored enterprise debt securities, single family mortgage-backed securities, and state housing finance agency securities) are valued by using independent pricing services, published prices, market quotes and bids from dealers who make markets in such securities. For U.S. Treasury securities, pricing services generally base prices on actual transactions as well as dealer supplied prices. For government-sponsored enterprise securities and single family mortgage-backed securities, pricing services generally base prices on discounted cash flow models and examine reference data such as issue name, issue size, ratings, maturity, call type, spread/benchmark yields and conditional prepayment rates, as well as dealer supplied prices. For state housing finance agency securities, pricing services generally base prices on trading spreads, new issue scales, verified bid information, and credit ratings.

Portfolio investments for which market quotations are not readily available (for example, multifamily mortgage-backed securities, and construction mortgage securities and loans) are valued at their fair value determined in good faith under consistently applied procedures adopted by the HIT’s Board of Trustees using dealer quotes and discounted cash flow models. The respective cash flow models utilize inputs from matrix pricing which considers market-based discount and prepayment rates, attributes of the collateral, and yield or price of bonds of comparable quality, coupon, maturity, and type. The market-based discount rate is composed of a risk-free yield (i.e., a U.S. Treasury note) adjusted for an appropriate risk premium. The risk premium reflects premiums in the marketplace over the yield on U.S. Treasury securities of comparable risk and average life to the security being valued as adjusted for other market considerations, such as: significant market or security specific events, changes in interest rates, and credit quality. On investments for which the HIT finances the construction and permanent securities or participation interests, value is determined based upon the total amount, funded and/or unfunded, of the commitment. Commercial mortgage-backed securities and real estate mortgage investment conduits are valued by using a dealer quote. The HIT has also retained an independent firm to determine the fair market value of securities for which market quotations are not readily available. In accordance with the procedures adopted by the HIT’s Board of Trustees, the monthly third-party valuation is reviewed by the HIT staff to determine whether valuation adjustments are appropriate based on any material impairments in value arising from specific facts and circumstances of the investment (e.g., prepayment speed). All such adjustments must be reviewed and reconciled with the independent valuation firm prior to incorporation in the NAV.

The shares of BACDE are valued at their fair value determined in good faith under consistently applied procedures adopted by the HIT’s Board of Trustees, which currently represents the net asset value of BACDE.

Short-term investments with remaining maturities of sixty days or less are valued at amortized cost, which approximates value. Cash and cash equivalents include overnight money market funds, which are also carried at cost.

GAAP establishes a disclosure hierarchy that categorizes the inputs to valuation techniques used to value assets and liabilities at measurement date. The HIT classifies its assets and liabilities into three levels based on the method used to value the assets or liabilities. Level 1 values are based on quoted prices in active markets for identical securities. Level 2 values are based on significant observable market inputs, such as quoted prices for similar securities, interest rates, prepayment speeds, credit risk, and quoted prices in inactive markets. Level 3 values are based on significant unobservable inputs that reflect the HIT’s determination of assumptions that market participants might reasonably use in valuing the securities.

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Notes to Financial Statements
(unaudited)
The following table presents the HIT’s valuation levels as of June 30, 2011:
Investment securities: ($ in thousands)		Level 1		Level 2		Level 3		Total
FHA Permanent Securities	$	-	$	130,399	$	20	$	130,419
FHA Construction Securities		-		12,799		-		12,799
Ginnie Mae Securities		-		924,113		-		924,113
Ginnie Mae Construction Securities		-		271,250		-		271,250
Fannie Mae Securities		-		1,691,376		-		1,691,376
Freddie Mac Securities		-		426,867		-		426,867
Commercial Mortgage-Backed Securities		-		24,712		-		24,712
State Housing Finance Agency Securities		-		176,161		-		176,161
Other Multifamily Investments		-		16,830		-		16,830
United States Treasury Securities		-		183,320		-		183,320
Equity Investments		-		-		(590)		(590)
Short-Term Investments		-		25,000		-		25,000
Other Financial Instruments*		-		(2,967)		-		(2,967)
Total	$	-	$	3,879,860	$	(570)	$	3,879,290

   *Other financial instruments include forward commitments.

The following table reconciles the valuation of the HIT’s Level 3 investment securities and related transactions for the six months ended June 30, 2011:

		Investments in Securities ($ in thousands)
	FHA Permanent Securities		Equity Investment			Total
Beginning Balance, 12/31/2010	$	20	$	(351)	$	(331)
Total Unrealized Gain (Loss)*		-		(239)		(239)
Ending Balance, 6/30/2011	$	20	$	(590)	$	(570)

   *Net change in unrealized loss attributable to Level 3 securities held at June 30, 2011, totaled $239,000 and is included on the accompanying

     Statement of Operations.

Level 3 investments in securities are not considered a significant portion of the HIT’s portfolio. The HIT’s policy is to recognize transfers between levels at the end of the reporting period. For the six months ended June 30, 2011, there were no transfers between levels.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.

Federal Income Taxes

The HIT’s policy is to comply with the requirements of the Internal Revenue Code of 1986, as amended (the Internal Revenue Code), that are applicable to regulated investment companies and to distribute all of its taxable income to its participants. Therefore, no federal income tax provision is required.

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Notes to Financial Statements

(unaudited)

Tax positions taken or expected to be taken in the course of preparing the HIT’s tax returns are evaluated to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. Management has analyzed the HIT’s tax positions taken on federal income tax returns and has concluded that no provision for income tax is required in the HIT’s financial statements.

The HIT files U.S. federal, state, and local tax returns as required. The HIT’s tax returns are subject to examination by the relevant tax authorities until the expiration of the applicable statutes of limitations, which is generally three years after the filing of the tax return but could be longer in certain circumstances.

Distributions to Participants

At the end of each calendar month, a pro rata distribution is made to participants of the net investment income earned during the month. This pro-rata distribution is based on the participant’s number of units held as of the immediately preceding month-end and excludes realized gains (losses) which are distributed at year-end.

Participants redeeming their investments are paid their pro rata share of undistributed net income accrued through the month-end of the month in which they redeem.

The HIT offers an income reinvestment plan that permits current participants automatically to reinvest their income distributions into HIT units of participation. Total reinvestment was approximately 89% of distributable income for the six months ended June 30, 2011.

Investment Transactions and Income

For financial reporting purposes, security transactions are accounted for as of the trade date. Gains and losses on securities sold are determined on the basis of amortized cost. Realized gains (losses) on paydowns of mortgage- and asset-backed securities are classified as interest income. Interest income, which includes amortization of premium and accretion of discount on debt securities, is accrued as earned.

12b-1 Plan of Distribution

The HIT’s Board of Trustees annually considers a Plan of Distribution under Rule 12b-1 under the Investment Company Act to pay for marketing and sales promotion expenses incurred in connection with the offer and sale of units and related distribution activities (12b-1 expenses). For the year 2011, the HIT is authorized to pay 12b-1 expenses in an amount up to $600,000 or 0.05% of its average monthly net assets on an annualized basis, whichever is greater. During the six months ended June 30, 2011, the HIT incurred approximately $237,000 of 12b-1 expenses.

Note 2. Investment Risk

Investment Rate Risk

As with any fixed-income investment, the market value of the HIT’s investments will fall below the principal amount of those investments at times when market interest rates rise above the interest rates of the investments. Rising interest rates may also reduce prepayment rates, causing the average life of the HIT’s investments to increase. This could in turn further reduce the value of the HIT’s portfolio.

Prepayment and Extension Risk

The HIT invests in certain fixed-income securities whose value is derived from an underlying pool of mortgage loans that are subject to prepayment and extension risk.

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Notes to Financial Statements

(unaudited)

Prepayment risk is the risk that a security will pay more quickly than its assumed payment rate, shortening its expected average life, resulting in a lower return from the security. In such an event, the HIT may be required to reinvest the proceeds of such prepayments in other investments bearing lower interest rates. The majority of the HIT’s securities backed by loans for multifamily projects include restrictions on prepayments for specified periods to mitigate this risk.

Extension risk is the risk that a security will pay more slowly than its assumed payment rate, extending its expected average life, resulting in a lower return from the security. When this occurs, the HIT’s ability to reinvest principal repayments in higher returning investments may be limited.

These two risks may increase the sensitivity of the HIT’s portfolio to fluctuations in interest rates and negatively affect the value of the HIT’s portfolio.

Note 3. Transactions with Related Entities

Since inception of BACDE operations, the HIT had advanced approximately $560,800 to BACDE as of June 30, 2011.

Note 4. Commitments

Certain assets of the HIT are invested in short-term investments until they are required to fund purchase commitments for long-term investments. As of June 30, 2011, the HIT had outstanding unfunded purchase commitments of approximately $527.9 million. The HIT maintains a reserve, in the form of securities, of no less than the total of the outstanding unfunded purchase commitments, less short-term investments. As of June 30, 2011, the value of the publicly traded mortgage-backed securities maintained for the reserve in a segregated account was approximately $3.54 billion.

The commitment amounts disclosed on the Schedule of Portfolio Investments represent the original commitment amount, which includes both funded and unfunded commitments.

Note 5. Investment Transactions

Purchases and sales of investments, excluding short-term securities and U.S. Treasury securities, for the six months ended June 30, 2011, were $721.9 million and $347.5 million, respectively.

Note 6. Distributions

No provision for federal income taxes is required since the HIT intends to continue to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code and distribute to shareholders all of its taxable income and gains. Federal income tax regulations differ from GAAP; therefore, distributions determined in accordance with tax regulations may differ in amount or character from net investment income and realized gains for financial reporting purposes. Financial reporting records are adjusted for permanent book/tax differences to reflect tax character. Financial records are not adjusted for temporary differences. The amount and character of tax-basis distributions and composition of the net assets are finalized at fiscal year-end; accordingly, tax-basis balances have not been determined as of June 30, 2011.

At June 30, 2011, the cost of investments for federal income tax purposes approximated book cost at amortized cost of $3,710,803,000. Net unrealized gain aggregated $168,487,000 at period-end, of which $188,346,000 related to appreciated investments and $19,859,000 related to depreciated investments.

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Notes to Financial Statements

(unaudited)

Note 7. Retirement and Deferred Compensation Plans

The HIT participates in the AFL-CIO Staff Retirement Plan, which is a multiemployer defined benefit pension plan, covering substantially all employees. This plan was funded by employer contributions, at rates approximating 26% of employees’ salaries for the six months ended June 30, 2011. The total HIT pension expense for the six months ended June 30, 2011, was approximately $911,000.

The HIT also sponsors a deferred compensation plan, referred to as a 401(k) plan, covering substantially all employees.This plan permits employees to defer the lesser of 100% of their total compensation or the applicable IRS limit. During 2011, the HIT will match dollar for dollar the first $4,800 of each employee’s contributions. The HIT’s 401(k) contribution for the six months ended June 30, 2011, was approximately $183,900.

Note 8. Loan Facility

The HIT has a $15 million uncommitted loan facility which expires on March 30, 2012. Under this facility, borrowings bear interest per annum equal to 1.25% plus the highest of (a) the Federal Funds rate, (b) the Overnight Eurodollar Rate, or (c) the one-month LIBOR. The HIT had no outstanding balance under the facility for the six months ended June 30, 2011. No compensating balances are required.

Note 9. Contract Obligations

In the ordinary course of business, the HIT enters into contracts that contain a variety of indemnifications. The HIT’s maximum exposure under these arrangements is unknown. However, the HIT has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be low.

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Financial Highlights
	Six Months**
	Ended June				Year Ended December 31
	30, 2011
PER SHARE DATA	(Unaudited)		2010		2009		2008		2007		2006
Net asset value, beginning of period	$ 1,133.82	$	1,114.72	$	1,098.48	$	1,097.01	$	1,081.27	$	1,086.97
Income from investment operations:
Net investment income	21.96*		47.27*		50.68*		53.64*		52.72		53.55
Net realized and unrealized gains (losses) on investments	10.50		20.75		17.15		1.91		17.54		(4.60)
Total income from investment operations	32.46		68.02		67.83		55.55		70.26		48.95
Less distributions from:
Net investment income	(22.77)		(48.92)		(51.59)		(54.08)		(54.52)		(54.65)
Net realized gains on investments	-		-		-		-		-		-
Total distributions	(22.77)		(48.92)		(51.59)		(54.08)		(54.52)		(54.65)
NET ASSET VALUE, END OF PERIOD	$ 1,143.51	$ 1,133.82		$	1,114.72	$	1,098.48	$	1,097.01	$	1,081.27
RATIOS/SUPPLEMENTAL DATA
Ratio of expenses to average net assets	0.46%		0.44%		0.43%		0.41%		0.41%		0.41%
Ratio of net investment income to average net assets	4.0%		4.1%		4.5%		5.0%		5.0%		5.0%
Portfolio turnover rate	40.6%		42.2%		28.5%		23.8%		42.1%		65.0%
NUMBER OF OUTSTANDING UNITS AT END OF PERIOD	3,477,252		3,430,737		3,250,549		3,156,720		3,388,107		3,334,684
NET ASSETS, END OF PERIOD (IN THOUSANDS)	$ 3,976,257	$ 3,889,839		$ 3,623,437		$	3,467,603	$	3,716,773	$ 3,605,679
TOTAL RETURN	2.89%		6.16%		6.28%		5.25%		6.70%		4.65%

*The average shares outstanding method has been applied for per share information.

** Percentage amounts for the period, except total return, have been annualized.

See accompanying Notes to Financial Statements.

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Leadership

 

Board of Trustees
John J. Sweeney, Chairman*	Stephen Frank	Richard Ravitch*
President Emeritus, AFL-CIO	Retired; formerlyVice President and Chief	Principal, Ravitch Rice & Co. LLC
	Financial Officer,The Small Business Funding
Richard L. Trumka*	Corporation	Kenneth E. Rigmaiden
President, AFL-CIO		Executive General Vice President, International
	Frank Hurt	Union of Painters and Allied Trades of the
Liz Shuler	International President, Bakery, Confectionery	United States and Canada
Secretary-Treasurer, AFL-CIO	& Tobacco Workers and Grain Millers
	International Union	Marlyn J. Spear, CFA*
Arlene Holt Baker		Chief Investment Officer, Building Trades
Executive Vice President, AFL-CIO	George Latimer	United Pension Trust Fund (Milwaukee
	Adjunct Professor of Urban Land Studies and	and Vicinity)
Mark H. Ayers	Geography, Macalester College
President, Building and Construction Trades		Tony Stanley*
Department, AFL-CIO	Jack Quinn	Director, TransCon Builders, Inc.; formerly
	President, Erie Community College, State	ExecutiveVice President, TransCon Builders,
James Boland	University of NewYork; formerly Member of	Inc.
President, International Union of Bricklayers	Congress, 27th District, NewYork
and Allied Craftworkers

* Executive Committee member.

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Leadership

Officers and Key Staff	Service Providers	AFL-CIO Housing Investment Trust
Stephen Coyle	Independent Registered Public	National Office
Chief Executive Officer	Accounting Firm	2401 Pennsylvania Avenue, N.W.
	Ernst &Young LLP	Suite 200
Theodore S. Chandler	McLean, Virginia	Washington, D.C. 20037
Chief Operating Officer		(202) 331-8055
	Corporate Counsel
Erica Khatchadourian	Bingham McCutchen LLP	New York City Office
Chief Financial Officer	Washington, D.C.	1270 Avenue of the Americas
		Suite 210
Chang Suh, CFA, CPA	Securities Counsel	New York, New York 10020
Executive Vice President and Chief Portfolio	Perkins Coie LLP	(212) 554-2750
Manager	Washington, D.C.
		Boston Office
Saul A. Schapiro	Transfer Agent	Ten Post Office Square, Suite 800
General Counsel	BNY Mellon Investment	Boston, Massachusetts 02109
	Servicing (US) Inc.	(617) 850-9071
Debbie Cohen	Wilmington, Delaware
Chief Development Officer		Western Regional Office
	Custodian	101 California Street, Suite 2450
Liz Diamond	Bank of  New York Mellon	San Francisco, California 94111
Director, Western Regional Office	New York, New York	(415) 433-3044
Christopher Kaiser		Gulf Coast Office
Chief Compliance Officer		935 Gravier Street, Suite 640
		New Orleans, Louisiana 70112
Carol Nixon		(504) 599-8750
Director, NewYork City Office
Thomas O’Malley
Director, New England Regional Office
Harpreet Singh Peleg, CPA
Controller
Eric W. Price
Executive Vice President
Lesyllee White
Director of Marketing
Stephanie H. Wiggins
Executive Vice President and Chief Investment
Officer

Investors should consider the HIT’s investment objectives, risks, and expenses carefully before investing. A prospectus containing more complete information may be obtained from the HIT by calling the Marketing and Investor Relations Department collect at (202) 331-8055 or by viewing the HIT’s website at www.aflcio-hit.com. The prospectus should be read carefully before investing.