AFL-CIO Housing Investment Trust
                          Highlights - 3rd Quarter 2008

Despite the unprecedented turmoil in the markets, the AFL-CIO Housing Investment
Trust (HIT) continued to outperform its benchmark and many other managers during
the third quarter. The HIT outperformed the Lehman Brothers Aggregate Bond Index
(benchmark  or Index) by 113 basis  points  for the third  quarter  and 95 basis
points year-to-date. The HIT also outperformed its benchmark for the 1-, 3-, 5-,
and 10-year periods as shown below.

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                Performance for periods ended September 30, 2008
             (Returns for periods exceeding one year are annualized)

                                  Quarter   1 Year    3 Year   5 Year    10 Year
                                  -------   ------    ------   ------    -------
  HIT Total Net Rate of Return     0.65%     4.58%     4.47%    4.00%     5.60%
  Lehman Aggregate Bond Index     (0.49%)    3.65%     4.15%    3.78%     5.20%

  The  performance  data  quoted  represents  past  performance  and  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 lower or higher than
  the  performance  quoted.  Performance  data  current  to the most  recent
  month-end can be viewed by following this link.
- --------------------------------------------------------------------------------

The HIT's  investment  strategy  has always  been based on  fundamentals  and on
investment  over a long time horizon and  emphasizes  investments in the highest
credit   quality   securities,   those  issued  by  the  U.S.   government   and
government-sponsored  enterprises  (GSEs).  Over 94% of the HIT's  portfolio  is
guaranteed  by  the  U.S.  government  or  a  GSE  and  over  3%  is  AAA-rated.
Furthermore,  the HIT has remained  disciplined  during recent periods when many
other market  participants  ignored risk,  seeking higher returns  without fully
understanding the potential for losses. For example,  the HIT has never employed
leverage and never invested in securities backed by subprime mortgages. In fact,
the only  residential  mortgage-backed  securities  (MBS)  in which  the HIT has
invested  are those  guaranteed  by Ginnie Mae or issued by a GSE, the latter of
which benefit from the credit of the  government and are more valuable since the
government takeover.

Positive contributions to the HIT's performance in the third quarter included:

o     Corporates  (18% of Index)  underperformed  all other major  fixed  income
      sectors in the Index;  they had one of their worst quarterly  performances
      on record posting  negative  "excess  returns" of -1027 basis points.  The
      fact  that  HIT's   portfolio  is  underweight  to  corporate   bonds  and
      private-label  CMBS as compared to the Index hugely benefited  performance
      as  spreads  during  the  quarter  widened  the most in these two  sectors
      resulting in the worst performing  major sectors in the Index  (Corporates
      and CMBS  make up 22.6%  of the  Index).  Private-label  CMBS  widened  by
      approximately +173 bps while agency CMBS only widened by approximately +25
      bps for the  quarter.  Lehman  Brothers  reported  that the CMBS  sector's
      "excess returns" were -809 bps.

o     Its ongoing yield advantage over the Index.

o     Its overweight to the highest  credit  quality sector (i.e.  AAA-rated) of
      the investment  grade  universe,  whose "excess  returns" were the highest
      among the four credit  ratings  buckets (AAA, AA, A and BBB) of the Lehman
      Aggregate Bond Index.  Those returns were -77, -733,  -1253, and -735 bps,
      respectively.  The HIT has an overweight with respect to the Index in high
      credit  quality  investments.  Over 97%  percent of the HIT  portfolio  is
      AAA-rated or carries a government or government-sponsored enterprise (GSE)
      guarantee.


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Negative contributions to the HIT's third quarter performance included:

o     The structural underweight in US Treasuries weighed on performance as this
      major sector posted the only  non-negative  "excess  return" in the Index;
      but mitigating it was the  portfolio's  underweight to the long end of the
      yield curve.  The 10+ year segment on the yield curve  underperformed  all
      other maturities on an excess return basis.  "Excess returns" for the 1-3,
      3-5, 5-7, 7-10, and 10+ year maturities were -160,  -259,  -283, -221, and
      -507 bps, respectively.

o     Its  structural  overweight  to  spread  based  assets  as  swap  spreads,
      especially  on the short end of the swap  surface,  rose during the month.
      Two year swap spreads  widened by 54.6 basis points while the 10 year swap
      spread narrowed by 3.75 basis points.

o     The  portfolio's  underweight  to single family MBS as this was the second
      best  performing  major  sector  in the  Index  posting  negative  "excess
      returns"  of only -5 bps.  MBS  comprises  approximately  40% of the Index
      where the portfolio has an approximate 33% allocation.

Overall  economic growth through 2008 will likely continue to be hampered by the
weak housing market,  soft labor market, and suppressed real income growth which
ultimately  have put stress on  consumer  spending.  Concerns  about the slowing
global  economy  and frozen  credit  markets  may keep bond  yields  from rising
significantly,  but  concerns  about  future  Treasury  supply from the Treasury
rescue plan combined with record  deficits will pressure  rates higher.  The HIT
anticipates maintaining its strategy of interest rate neutrality relative to its
benchmark.  With rising interest rate volatility expected to persist,  remaining
effectively duration neutral is prudent.

The HIT expects slow growth and  liquidity  issues to challenge  the economy and
the financial  markets for an extended period.  For investors  seeking to reduce
credit risk and for investors  seeking higher returns than Treasury yields,  the
HIT's  strategy  of  emphasizing  investments  in  the  highest  credit  quality
securities  bodes  well for  this  type of  market.  The HIT  expects  increased
opportunities to invest in FHA projects at relatively wide spreads into 2009 and
beyond. FHA and GNMA multifamily  investments  provide relative value over other
investment  grade  securities and represent an investment type for which the HIT
possesses over 40 years of experience.

Investors should consider the HITs investment objectives, risks, and charges and
expenses carefully before investing.  This and other information is contained in
the  HIT's  prospectus.  To  obtain  a  prospectus,   please  call  the  HIT  at
202-331-8055.  The prospectus  should be read carefully  before  investing.  The
Barclays Capital  Aggregate Bond Index (formerly Lehman Brothers  Aggregate Bond
Index) is an unmanaged  index.  It is not available for direct  investment;  its
returns  would be lower if they  reflected the expenses  associated  with active
management of an actual portfolio. This material represents the HIT's assessment
of the market  environment  at a specific point in time and should not be relied
upon as research or investment advice.

10/15/2008