AFL-CIO Housing Investment Trust
                          Highlights - 4th Quarter 2008

The AFL-CIO  Housing  Investment  Trust (HIT)  earned  positive  net returns and
outperformed  its benchmark in 2008 despite  unprecedented  market turmoil.  The
HIT's prudent and disciplined  investment  strategy  generated  superior returns
versus the benchmark  and  outperformed  many fixed income  managers in a market
environment  that continued to be challenged by liquidity and credit crises.  As
of December 31, 2008, the HIT outperformed  the Barclays Capital  Aggregate Bond
Index ("Barclays Aggregate," formerly the Lehman Brothers Aggregate Bond Index),
for the 1-, 3-, 5- and 10-year return periods as shown below.

- --------------------------------------------------------------------------------
                 Performance for periods ended December 31, 2008
             (Returns for periods exceeding one year are annualized)

                                        Quarter  1 Year  3 Year  5 Year  10 Year
                                        -------  ------  ------  ------  -------

  HIT Total Net Rate of Return           3.62%    5.25%   5.53%   4.68%   5.82%
  Barclays Capital Aggregate Bond Index  4.58%    5.24%   5.51%   4.65%   5.63%

  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 has  intentionally  avoided  excessive  risk  taking  and  irresponsible
investing that has led to the greatest  damage the U.S.  economy has faced since
the Great  Depression.  Unlike many strategies  employing  excessive risk taking
that  gained  popularity  in  recent  years,  the  HIT  has  offered  consistent
performance  while  minimizing  the  risk of loss of  principal  and  generating
predictable  income.  The HIT does not employ leverage  through  borrowing,  and
therefore,  does not have margin call risk or roll-over risk for debt.  Further,
the HIT does not use derivatives and has never invested in securities  backed by
subprime mortgages.

Positive contributions to the HIT's performance in the 4th quarter included:

  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.  "Excess returns" were the highest among the four
    credit  ratings  buckets  (AAA,  AA, A and BBB) of the  Barclays  Aggregate.
    Excess  returns  were  -207,  -221,  -360,  and -1318  basis  points  (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 GSE guarantee.

Negative contributions to the HIT's performance included:

  o The portfolio's underweight in U.S. Treasuries and agency debentures weighed
    on  performance  as these major sectors posted the highest excess returns of
    +0.0  (by  definition)  and +5  basis  points  in the  Index,  respectively.
    Mitigating the negative attribution, however, was the portfolio's overweight
    to the swap spread products as swap spreads tightened significantly.

  o Structured product had one of the worst quarters in recent memory as spreads
    widened.  Despite  swap  spreads  tightening  significantly  across the swap
    surface (two year swap  spreads  narrowed by 74.5 basis points while 10 year
    swap spreads tightened by 31.4 basis points),  spreads on agency multifamily
    MBS widened significantly offsetting the swap spread tightening. The HIT has
    a structural  overweight in agency  multifamily  MBS. Single loan Fannie Mae
    and GNMA multifamily



    MBS widened by over 150 basis points and agency  multifamily  REMICs widened
    by approximately 80 basis points.

CMBS  underperformed  all other  major  fixed  income  sectors  in the  Barclays
Aggregate,  the worst  quarter  on record  for the  sector.  Private-label  CMBS
widened by  approximately  +500 bps.  Barclays  Capital  reported  that the CMBS
sector's "excess returns" were -2043 bps, the worst performing major sector. The
HIT is  slightly  underweight  in  private  label  CMBS.  The  corporate  sector
underperformed Treasuries significantly,  but the support of the Federal Deposit
Insurance  Corporation  for 3-year  corporate  bonds kept the sector  better bid
versus other comparable credit sectors.  Excess returns for the sector were -563
basis points.

                                                               Modified Adjusted
Sector Performance           Absolute         Excess Return         Duration
- --------------------------------------------------------------------------------
US Treasuries                 +8.75%              +0.0               5.53
- --------------------------------------------------------------------------------
Agencies                      +6.10%               +5                3.61
- --------------------------------------------------------------------------------
RMBS                          +4.34%              -195               1.31
- --------------------------------------------------------------------------------
Corporates                    +3.98%              -563               6.15
- --------------------------------------------------------------------------------
CMBS                         -13.52%             -2043               4.11
- --------------------------------------------------------------------------------
ABS                           -6.82%             -1173               2.88
- --------------------------------------------------------------------------------

The U.S.  economy is  expected to remain weak for the  foreseeable  future.  Job
losses  continue to accelerate  and the health of the U.S. and global  financial
systems still needs to be restored. The U.S. government, along with many others,
will continue to attempt to spur growth through  fiscal and monetary  actions as
the  global   economy   works  through  the  pain  of   deleveraging.   The  new
administration  announced an $825 billion  stimulus package early in 2009. Among
other  actions,  the  government  is  expected  to  expand  FHA's  role  in  the
multifamily  mortgage  market to help fill the void left by the private  sector.
The HIT's over 40 years of  experience  in sourcing and investing in FHA and GSE
multifamily   mortgage  investments  should  enable  it  to  benefit  from  this
environment.

The lack of funding for multifamily projects over the last year has caused these
investments  to  be  much  more  attractive  (with  higher  yields  relative  to
Treasuries) than they have been historically.  In this environment, the HIT will
aggressively  seek  capital to fund the  expected  increase  in FHA  multifamily
production.  It will  continue to execute its  long-term  portfolio  strategy of
achieving  fundamentals of higher yield,  superior  credit quality,  and neutral
interest rate risk versus the Barclays  Capital  Aggregate Bond Index. The HIT's
strategy of substituting  government/agency  multifamily MBS for corporate bonds
provides principal protection and stable cash flows due to prepayment protection
for volatile market environments.  This strategy has allowed the HIT to generate
superior risk-adjusted returns over the long run. These multifamily  investments
also contribute to the HIT's  collateral  objectives of increasing the supply of
affordable housing and generating good union jobs.

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.

2/6/2009