N-CSRS

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSRS

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT

INVESTMENT COMPANIES

Investment Company Act File Number: 811-3493

American Federation of Labor –

Congress of Industrial Organizations

Housing Investment Trust

(Exact name of registrant as specified in charter)

2401 Pennsylvania Avenue, N.W., Suite 200

Washington, DC 20037

(Address of principal executive offices) (Zip code)

Kenneth G. Lore, Esq.

Katten Muchin Rosenman LLP

2900 K Street, N.W., North Tower Suite 200

Washington, DC 20007

(Name and address of agent for service)

(202) 331-8055

(Registrant’s telephone number, including area code)

Date of fiscal year end: December 31

Date of reporting period: January 1, 2016 through June 30, 2016

Item 1. Report to Stockholders.

The following is a copy of the 2016 Semi-Annual Report of the AFL-CIO Housing Investment Trust (the “Trust”) transmitted to Trust participants pursuant to Rule 30e-1 under the Investment Company Act of 1940, as amended (17 CFR 270.30e-1) (the “Act”).

 

 

TO OUR INVESTORS

When the AFL-CIO’s founders created the HIT more than thirty years ago, they had a vision that workers’ pension capital could help build local communities through union job creating investments in affordable housing developments. The first requirement of the HIT, then and now, was and is to provide market returns to its investors, and the HIT delivered strong absolute returns to investors for the first half of 2016. We have done that for decades, and our investments have created more than 100,000 rental housing units, most of which are affordable to lower income and working families. Those investments in turn, have created tens of thousands of on-site construction jobs for union members.

Few funds can meet HIT’s production track record. As described in the report, HIT and its wholly-owned subsidiary, Building America CDE, have put some 82 projects under agreement in 37 cities, creating 25,000 housing units and 22,600 union jobs. The HIT invested $2 billion in these developments. In these economically uncertain times, it is important that investors have access to prudent and experienced managers who get results.

After more than three decades of successful mission guided investing, the HIT is enhancing its program to increase its ability to provide long term value to investors while creating union construction jobs and affordable housing across the country.

First, the growing defined contribution/401(k) market can now access the benefits of the HIT. The HIT Daily Valued Fund (HIT DVF), a core fixed-income collective investment fund sponsored by Hand Benefits & Trust, a BPAS company, which holds units of the HIT, launched in April. The HIT DVF now has invested or committed capital of nearly $50 million. The HIT DVF allows the HIT to access a new market and attract new capital as the 401(k) market grows. Increased capital leads to increased investment activity, which means more affordable housing and union jobs.

Additionally, this June our investors voted overwhelmingly to allow the HIT to create a wholly owned subsidiary investment adviser company. It will focus its investments on the early pre-development phase of deals, like bridge loans, and is intended to increase the number of affordable union-built projects in which the HIT can invest. It is structured as a limited liability company to help protect against liability to the HIT. It will be operational later this year.

As the HIT approaches $6 billion in total net assets, we are grateful for your confidence and appreciate your ongoing investment in our program. The HIT is stronger than it has ever been and remains committed to providing triple bottom-line returns: affordable rental housing, union construction jobs and competitive returns. Thank you for your support.

 

Steve Coyle, CEO

HIT PERFORMANCE VS. BARCLAYS CAPITAL AGGREGATE BOND INDEX AS OF JUNE 30, 2016 (Percent)

 

COMPARISON OF $50,000 INVESTMENT IN HIT & BARCLAYS CAPITAL AGGREGATE BOND INDEX (Dollars in thousands)

 

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

2016 HIT PERFORMANCE

For the first half of 2016 the AFL-CIO Housing Investment Trust (HIT) provided its investors with gross and net returns of 4.74% and 4.52%, respectively, versus 5.31% for the Barclays Capital Aggregate Bond Index (Barclays Aggregate). For the 3-, 5-, and 10-year periods ending June 30, the HIT’s gross returns exceeded the benchmark by 37, 35, and 40 basis points, respectively, (as shown in the graph at left).

These solid returns are a result of the HIT constructing a portfolio that provides higher income with less credit risk than the Barclays Aggregate by focusing on high credit quality, job-creating multifamily mortgage securities. These securities substitute for some Treasuries and all corporate debt holdings in the benchmark. This investment strategy has benefited HIT’s investors over the long-term.

The HIT also maintains its interest rate and call risk to be similar to the benchmark. Consistent with the HIT’s execution of its strategy, the HIT maintained its income advantage to the Barclays Aggregate with a 34 basis point yield advantage as of June 30 (as shown on page 2).

Certain factors impacted HIT’s lower relative performance in the first half of the year. First, its underweight to Treasuries – approximately 10% vs. 37% for the Barclays Aggregate at June 30 – was a major factor in its relative performance as Treasuries posted six-month total returns of 5.37%. A second factor was the strong performance by the corporate bond sector, which represented over 25% of the Barclays Aggregate. The HIT does not invest in corporate bonds. This sector of the Barclays Aggregate posted an excess return of 120 basis points over the period. Third, spreads widened for some of the HIT’s multifamily mortgage-backed securities (MBS); Ginnie Mae permanent loan certificates spreads, for example, widened by 23 basis points. Finally, the lowest credit quality sector of the Barclays Aggregate showed strong performance, with an excess return of 216 basis points, compared to -11 basis points for the highest quality sector.¹ Taken together, this confluence of events contributed to HIT’s lower performance versus the Barclays Aggregate for the period.

2016 MARKETS AND OUTLOOK

A number of aspects of the current economy lead the HIT to believe that its long-term strategy will remain a prudent choice for pension fund investors going forward. Uncertainty and volatility were pervasive themes in the global financial markets during the first half of 2016 and are expected to continue for the foreseeable future. The consensus of economists is that the U.S. economy is expected to grow at around 2% this year – about the same rate as it has since the second half of 2009. This modest domestic economic growth, subdued inflation, weakness and uncertainty in the global economy, and the strength of the U.S. dollar have meant that the Federal Reserve

¹Approximately 96% of HIT’s portfolio carried a government or government-sponsored enterprise guarantee or had a AAA profile versus 71% for the Barclays Aggregate, and none of the portfolio was rated BBB versus 13.5% of the benchmark at June 30.

AFL-CIO HOUSING INVESTMENT TRUST 1

DIVERSIFICATION BENEFITS

With its lack of correlation to equities, the HIT provides diversification benefits, as shown below. Despite its lack of exposure to corporate bonds, the HIT’s returns are highly correlated with its benchmark, the Barclays Aggregate.

CORRELATION OF MONTHLY
YEAR-OVER-YEAR CHANGES IN INDICES
Periods ending June 30, 2016 

	Five Year	Ten Year
HIT Net	1.00	1.00
Barclays Capital Aggregate Bond Index	0.99	0.96
Bloomberg REIT Index	0.48	0.07
U.S. Standard & Poor’s 500 Index	-0.40	-0.18
United Kingdom FTSE 100 Index	-0.44	-0.05

Source: Haver Analytics, Bloomberg LP, Barclays Capital Aggregate Bond Index, and the HIT

U.S. TREASURY YIELD CURVE SHIFT

(Percent)

 

RISK COMPARISON

As of June 30, 2016

	HIT	Barclays
Superior Credit Profile
U.S. Government/Agency/AAA/Cash	95.8%	70.8%
A & Below	0.1%	24.8%
Superior Yield
Current Yield: 22 basis point advantage	3.14%	2.92%
Yield to Worst: 34 basis point advantage	2.16%	1.82%
Similar Interest Rate Risk
Effective Duration	5.30	5.50
Convexity	0.15	0.07
Similar Call Risk
Call Protected	79%	72%
Not Call Protected	21%	28%

Source: HIT and Barclays Capital Aggregate Bond Index

The calculations of the HIT yield herein represent widely accepted portfolio characteristics information based on coupon rate, current price and, for yield to worst, certain prepayment assumptions, and are not current yield or other performance data as defined by the SEC in Rule 482.

has been cautious to normalize interest rates to date. With historically low rates, however, if domestic economic conditions improve more than expected, interest rates could rise. In any event, the HIT’s solid portfolio fundamentals, which are expected to continue to offer higher income, higher credit quality, and similar interest rate risk versus the Barclays Aggregate should position it well.

In this market environment, high credit quality fixed income securities, such as those in the HIT, remain an important component of diversified portfolios. The HIT’s portfolio strategy of substituting high credit quality multifamily securities for corporates and some Treasuries in the Barclays Aggregate can provide diversification benefits to investors.

Historically, the HIT’s returns are negatively correlated with equities, while positively correlated with the Barclays Aggregate. Investing in the HIT can help investors to better manage portfolio risk, particularly in times of overall economic weakness. The HIT should continue to meet the needs of long-term investors seeking income, high credit quality, and diversification.

The HIT’s portfolio strategy of substituting high credit quality multifamily securities for corporates and some Treasuries in the Barclays Aggregate can provide diversification benefits to investors.

Portfolio Allocation

Based on value of total investments, including unfunded commitments, as of June 30, 2016.

2 SEMI–ANNUAL REPORT 2016

MULTIFAMILY INVESTMENTS

The HIT’s multifamily investments help its portfolio generate competitive returns – government/agency permanent MBS offer higher yields than securities with similar credit and interest rate risk and construction-related MBS offer even higher yields. Since starting its Construction Jobs Initiative in 2009, the HIT has committed $2 billion of union and public employee capital to fund construction-related multifamily developments. Together with its subsidiary Building America CDE, Inc., the HIT has invested $2 billion, financing 82 projects with a total development investment of $4.5 billion in 37 cities. These investments have created an estimated 22,600 on-site union construction jobs and 48,200 total jobs across all industry sectors, and built or rehabilitated some 25,000 housing units in the local communities.^*

The HIT continues to identify investment opportunities for high credit quality multifamily mortgage securities, including new construction, substantial rehabilitation, and preservation of affordable housing. Through existing relationships and new

partnerships with developers, sponsors, mortgage bankers, housing finance agencies, community groups, and others, the HIT seeks to engage early in the financing process. It can use its expertise in structuring and negotiating terms to maximize the investment’s value for the portfolio while meeting the needs of the project developer or sponsor.

  “This is a nice project. We have a lot of union workers here making good benefits and a good living wage.”

-- Kyle Crotty, Laborers Local 42

Heights at Manhassett, Richmond Heights, MO

ELIZABETH SETON PEDIATRIC CENTER IIYonkers, NY

 

The HIT committed $18.3 million in financing for a $21 million addition to this state-of-the-art, skilled nursing care facility for medically fragile children, which was previously constructed with HIT financing. The addition will house 32 new long-term ventilator beds, tripling the capacity for children with severe respiratory problems. The expanded unit will be covered under the existing collective bargaining agreement with 1199 SEIU United Healthcare Workers East, AFL-CIO. The construction activity is expected to create an estimated 105 on-site union construction jobs.

ZVAGO COOPERATIVE,Minnetonka, MN

To help finance the new construction of this $19 million 54-unit senior cooperative (for those 62 and older), the HIT is providing a $14.8 million investment. The project is located on the northern portion of Glen Lake in Minnetonka, in the southwest suburbs of Minneapolis and is part of the wider Glen Lake Redevelopment Project, which includes a 52-unit mixed-use project built in 2008 and a 159-unit senior apartment community built in 2011. It will provide quality housing for seniors who want to enjoy an independent and active lifestyle. Construction is expected to generate approximately 85 union jobs.

 

^*Economic impacts such as jobs and personal income are derived from an IMPLAN model. See page 24 for additional detail.

AFL-CIO HOUSING INVESTMENT TRUST 3

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 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, Building America CDE, Inc. and shares in mutual funds holding short-term or overnight cash, if applicable, 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. The HIT has reported information regarding how it voted in matters related to its subsidiary in its most recent filing with the SEC on Form N-PX. This filing is 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. The expense example in the table below 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, 2016, and held for the entire period ended June 30, 2016.

Actual Expenses: The first line of the table below provides information 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 six-month 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, 2016” 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 information about 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 the other mutual funds.

Please note that this example is useful in comparing funds’ ongoing costs only. It does not include any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. The HIT does not have such transactional costs, but many other funds do.

	Beginning Account Value January 1, 2016	Ending Account Value June 30, 2016	Expenses Paid During Six-Month Period Ended June 30, 2016*
Actual expenses	$ 1,000.00	$ 1,045.20	$ 2.19
Hypothetical expenses (5% return before expenses)	$ 1,000.00	$ 1,022.73	$ 2.16

*Expenses are equal to the HIT’s annualized six-month expense ratio of 0.43%, as of June 30, 2016, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period).

PARTICIPANTS MEETING

A special meeting of the Participants was held in Washington, D.C., on Tuesday June 14, 2016. The following matter was put to a vote of the Participants at the meeting through the solicitation of proxies:

The Participants approved the formation of a wholly owned subsidiary investment adviser entity and its registration as an investment adviser under applicable federal or state law by: votes for 3,313,910.069; votes against 1,940.711; votes abstaining 26,867.749; votes not cast 1,714,669.173.

4 SEMI–ANNUAL REPORT 2016

 

STATEMENT OF ASSETS AND LIABILITIES

June 30, 2016 (Dollars in thousands, except per share data; unaudited)

Assets
	Investments, at value (cost $5,827,431)	$	6,060,990
	Cash		698
	Accrued interest receivable		18,052
	Receivables for investments sold		39
	Other assets		1,502
	Total assets		6,081,281
Liabilities
	Payables for investments purchased		171,971
	Redemptions payable		931
	Income distribution and capital gains payable, net of dividends reinvested of $10,816		1,596
	Refundable deposits		380
	Accrued salaries and fringe benefits		4,425
	Other liabilities and accrued expenses		1,396
	Total liabilities		180,699
	Other commitments and contingencies (note 4 of financial statements)		—
Net assets applicable to participants’ equity —
	Certificates of participation—authorized unlimited;
	Outstanding 5,101,598 units	$	5,900,582
Net asset value per unit of participation (in dollars)		$	1,156.62
Participants’ equity
	Participants’ equity consisted of the following:
	Amount invested and reinvested by current participants	$	5,663,539
	Net unrealized appreciation of investments		233,559
	Distribution in excess of net investment income		(2,233)
	Accumulated net realized gain, net of distributions		5,717
	Total participants’ equity	$	5,900,582

See accompanying Notes to Financial Statements.

6 SEMI–ANNUAL REPORT 2016

SCHEDULE OF PORTFOLIO INVESTMENTS

June 30, 2016 (Dollars in thousands; unaudited)

FHA Permanent Securities (2.7% of net assets)

	Interest Rate			Maturity Date		Face Amount		Amortized Cost		Value
Single Family	7.75	%	1	Jul-2021	$	9	$	9	$	9
Multifamly	3.65	%		Dec-2037		9,680		9,922		9,937
	3.75	%		Aug-2048		4,065		4,061		4,174
	4.00	%		Dec-2053		65,070		65,045		67,458
	4.79	%		May-2053		4,850		5,113		5,323
	5.35	%		Mar-2047		7,361		7,371		7,520
	5.55	%		Aug-2042		7,977		7,980		8,017
	5.60	%		Jun-2038		2,459		2,464		2,471
	5.65	%		Oct-2038		1,912		1,943		1,919
	5.80	%		Jan-2053		2,050		2,060		2,296
	5.87	%		May-2044		1,784		1,783		1,933
	5.89	%		Apr-2038		4,620		4,625		4,739
	6.02	%		Jun-2035		4,413		4,415		4,439
	6.20	%		Apr-2052		11,572		11,568		13,440
	6.40	%		Aug-2046		3,811		3,813		4,297
	6.48	%		Nov-2041		6,265		6,508		6,381
	6.60	%		Jan-2050		3,371		3,402		3,922
	6.75	%		Apr-2040 - Jul-2040		4,856		4,841		4,891
	7.20	%		Oct-2039		2,845		2,850		2,867
	7.50	%		Sep-2032		1,338		1,334		1,410
	7.93	%		Apr-2042		2,682		2,682		2,786
						152,981		153,780		160,220
Total FHA Permanent Securities					$	152,990	$	153,789	$	160,229

Ginnie Mae Securities (28.8% of net assets)

	Interest Rate		Maturity Date	Unfunded Committments2			Face Amount		Amortized Cost		Value
Single Family	4.00	%	Feb-2040 - Jun-2040	$	—	$	6,866	$	6,954	$	7,433
	4.50	%	Aug-2040		—		3,879		3,969		4,268
	5.50	%	Jan-2033 - Jun-2037		—		3,435		3,423		3,913
	6.00	%	Jan-2032 - Aug-2037		—		2,243		2,241		2,588
	6.50	%	Jul-2028		—		60		60		71
	7.00	%	Nov-2016 - Jan-2030		—		1,269		1,276		1,517
	7.50	%	Nov-2017 - Aug-2030		—		678		684		806
	8.00	%	Sep-2026 - Nov-2030		—		508		515		616
	8.50	%	Jun-2022 - Aug-2027		—		482		485		555
	9.00	%	Mar-2017 - Jun-2025		—		143		144		161
	9.50	%	Sep-2021 - Sep-2030		—		44		45		52
					—		19,607		19,796		21,980
Multifamily	1.73	%	May-2042		—		4,397		4,407		4,410
	2.15	%	May-2056		—		9,451		9,433		9,550
	2.18	%	May-2039		—		10,231		10,319		10,283
	2.20	%	Jun-2056		—		9,950		9,929		10,056
	2.25	%	Dec-2048		—		13,444		13,325		13,652
	2.30	%	Mar-2056 -May-2056		—		54,689		54,519		55,446
	2.30	%	Oct-2056		—		31,897		31,520		32,239
	2.31	%	Nov-2051		—		7,076		7,078		7,023

AFL-CIO HOUSING INVESTMENT TRUST 7

SCHEDULE OF PORTFOLIO INVESTMENTS

June 30, 2016 (Dollars in thousands; unaudited)

Ginnie Mae Securities (28.8% of net assets), continued

Interest Rate		Maturity Date	Unfunded Committments2		Face Amount			Amortized Cost		Value
2.32	%	Apr-2054	$	—	$	22,652	$	23,293	$	21,732
2.35	%	Dec-2040 - Nov-2056		—		37,879		38,429		37,504
2.40	%	Aug-2047		—		15,381		15,421		15,694
2.43	%	Nov-2038		—		20,000		20,097		20,226
2.50	%	Jul-2045 - Mar-2057		—		44,927		45,028		45,817
2.53	%	Jul-2038 - Feb-2040		—		34,453		34,968		35,076
2.55	%	Feb-2048		—		22,589		22,775		22,130
2.60	%	Apr-2048 - Apr-2056		—		34,751		34,952		35,537
2.60	%	Dec-2055		—		24,856		25,029		25,443
2.70	%	May-2048		—		29,697		30,233		30,327
2.70	%	Jul-2056		—		16,907		17,118		17,356
2.70	%	Jan-2053		—		51,015		51,484		51,632
2.72	%	Feb-2044		—		1,117		1,153		1,139
2.79	%	Apr-2049		—		24,490		24,786		25,350
2.82	%	Apr-2050		—		1,500		1,536		1,545
2.87	%	Feb-2036 - Dec-2043		—		25,000		25,344		25,756
2.89	%	Mar-2046		—		32,000		32,250		32,819
3.00	%	Mar-2051		—		20,000		20,117		20,624
3.05	%	May-2044		—		45,500		45,845		46,962
3.05	%	May-2054		—		11,545		11,610		11,937
3.06	%	Aug-2040		—		5,421		5,570		5,467
3.10	%	Jan-2044		—		23,000		23,366		23,857
3.13	%	Nov-2040		—		1,064		1,094		1,074
3.19	%	Jan-2049		—		17,025		17,754		17,814
3.20	%	Jul-2041 - Oct-2053		—		24,751		24,913		25,817
3.24	%	Apr-2051		—		5,267		5,352		5,528
3.25	%	Sep-2054		—		35,000		34,669		36,954
3.26	%	Feb-2038 - Nov-2043		—		29,456		29,705		30,515
3.30	%	May-2055		—		10,000		9,491		10,366
3.33	%	Jun-2043		—		15,000		15,556		15,798
3.35	%	Nov-2042 - Mar-2044		—		25,000		24,433		26,206
3.37	%	Dec-2046		—		19,200		19,491		20,150
3.40	%	Apr-2017 - Jul-2046		—		8,050		8,329		8,465
3.47	%	Apr-2046		—		7,922		8,476		8,483
3.49	%	Mar-2042		—		28,000		29,200		29,286
3.49	%	Feb-2044		—		4,000		4,228		4,267
3.50	%	Feb-2051 - Jan-2054		—		31,363		31,189		33,274
3.55	%	May-2042 - Apr-2051		—		15,856		16,261		16,542
3.57	%	Apr-2053		—		33,911		36,454		36,200
3.59	%	Sep-2050		—		7,986		8,462		8,528
3.60	%	Sep-2041		—		10,000		10,703		10,368
3.62	%	Nov-2044		—		28,791		29,731		29,931
3.67	%	Nov-2035		—		17,445		18,315		18,712
3.68	%	Sep-2052		—		6,500		6,769		6,942
3.71	%	Nov-2052		—		9,501		10,304		10,227
3.74	%	Sep-2046		—		10,000		10,804		10,349
3.76	%	Dec-2045		—		8,583		8,174		9,207
3.81	%	Dec-2053		—		10,632		10,733		11,312
3.85	%	Oct-2054		—		31,321		31,480		33,971

8 SEMI–ANNUAL REPORT 2016 (continued)

SCHEDULE OF PORTFOLIO INVESTMENTS

June 30, 2016 (Dollars in thousands; unaudited)

Ginnie Mae Securities (28.8% of net assets), continued

	Interest Rate		Maturity Date		Unfunded Committments2			Face Amount		Amortized Cost		Value
	3.85	%	Jan-2056		$	—	$	33,234	$	33,576	$	36,575
	3.86	%	Apr-2046 - Oct-2047			—		13,979		14,047		14,752
	3.90	%	Apr-2055			—		16,786		17,448		18,227
	3.92	%	Aug-2039			—		49,066		52,953		53,394
	3.94	%	Jun-2045 - Sep-2051			—		27,375		27,988		29,683
	3.95	%	Jul-2053			—		5,950		5,963		6,458
	3.99	%	Sep-2043			—		10,042		10,468		10,243
	4.00	%	May-2049			—		11,848		12,790		12,149
	4.05	%	Feb-2052 - Oct-2053			—		6,388		6,392		6,844
	4.05	%	Oct-2053			—		59,142		63,996		64,406
	4.10	%	May-2051			—		4,131		4,546		4,499
	4.15	%	Jun-2053			—		2,208		2,241		2,404
	4.24	%	May-2041			—		3,529		3,738		3,572
	4.25	%	Sep-2038			—		37,464		37,699		40,090
	4.42	%	Feb-2031			—		30,875		31,010		32,783
	4.45	%	Jun-2055			—		2,627		2,517		2,910
	4.50	%	May-2038			—		19,826		21,783		21,315
	4.63	%	Sep-2037	3		—		1,500		1,461		1,581
	4.70	%	Sep-2056			3,400		—		170		317
	4.90	%	Mar-2044	3		—		1,000		991		1,057
	4.94	%	Jun-2046	3		—		3,620		3,624		3,661
	5.05	%	Apr-2049	3		—		2,765		2,766		2,842
	5.15	%	Dec-2050			—		15,250		15,102		17,167
	5.21	%	Mar-2053			—		48,714		48,773		54,974
	5.25	%	Apr-2037			—		19,750		19,743		21,563
	5.34	%	Jul-2040			—		13,218		13,029		13,916
	5.45	%	Sep-2037			—		13,271		14,582		14,889
	5.55	%	May-2049	3		—		10,065		10,066		10,445
						3,400		1,601,062		1,632,466		1,675,591
When Issued4	3.77	%	Sep-2053			—		3,984		4,352		4,297
Total Ginnie Mae Securities					$	3,400	$	1,624,653	$	1,656,614	$	1,701,868

Ginnie Mae Construction Securities (3.1% of net assets)

	Interest Rates5					Unfunded
	Permanent		Construction		Maturity Date		Commitments2		Face Amount		Amortized Cost		Value
Multifamily	3.10	%	3.10	%	Apr-2055	$	188	$	4,878	$	4,878	$	4,983
	3.30	%	3.30	%	Jul-2057		14,218		11,710		12,494		13,084
	3.50	%	3.50	%	Mar-2057 - Apr-2057		20,534		28,305		29,997		31,378
	3.53	%	3.53	%	Jun-2042		17,443		857		1,541		1,944
	3.55	%	3.55	%	Apr-2057		19,391		22,239		23,395		24,620
	3.60	%	3.60	%	Jun-2057		6,637		7,678		8,257		8,666
	3.62	%	3.62	%	Dec-2057		11,212		18,538		19,136		20,579
	3.66	%	3.66	%	Jul-2058		24,000		—		269		962
	3.68	%	3.68	%	Jun-2057		16,814		10,940		11,784		13,014
	3.68	%	3.68	%	Aug-2057		13,359		1,462		1,831		2,445
	4.09	%	4.09	%	Feb-2056		1,277		56,807		57,691		62,319
Total Ginnie Mae Construction Securities						$	145,073	$	163,414	$	171,273	$	183,994

AFL-CIO HOUSING INVESTMENT TRUST 9

SCHEDULE OF PORTFOLIO INVESTMENTS

June 30, 2016 (Dollars in thousands; unaudited)

Fannie Mae Securities (35.5% of net assets)

	Interest Rate		Maturity Date		Face Amount		Amortized Cost		Value
Single Family	0.70	%6	Mar-2037	$	472	$	467	$	470
	0.75	%6	Jul-2043		16,800		16,678		16,678
	0.77	%6	Jun-2037		2,256		2,257		2,248
	0.80	%6	Mar-2043		14,531		14,495		14,426
	0.80	%6	Nov-2044		29,604		29,608		29,475
	0.83	%6	Nov-2042		9,422		9,426		9,358
	0.85	%6	Apr-2037 - Oct-2044		23,771		23,820		23,667
	0.91	%6	Oct-2042		7,794		7,833		7,759
	0.95	%6	Dec-2040 - Feb-2043		49,575		49,415		49,532
	0.97	%6	Jun-2042		5,466		5,498		5,462
	1.00	%6	Mar-2042		13,031		13,056		13,034
	1.04	%6	Mar-2041		9,004		9,082		9,026
	1.05	%6	Mar-2042 - Oct-2043		18,850		18,921		18,874
	1.15	%6	Dec-2040		4,560		4,575		4,599
	2.23	%6	Aug-2033		247		247		257
	2.31	%6	Jul-2033		447		445		468
	2.34	%6	Sep-2035		1,000		997		1,053
	2.42	%6	Nov-2033		2,809		2,811		2,907
	2.47	%6	Aug-2033		941		940		994
	2.49	%6	Jul-2033		2,236		2,245		2,361
	2.50	%6	Nov-2034		1,489		1,530		1,560
	2.54	%6	Aug-2033		1,824		1,821		1,924
	2.61	%6	May-2033		529		531		556
	2.76	%6	Apr-2034		1,562		1,604		1,637
	3.00	%	Apr-2031 - Dec-2042		28,160		29,170		29,515
	3.50	%	Oct-2026 - Jan-2046		100,654		104,773		106,913
	4.00	%	Jun-2018 - Jan-2045		64,939		67,006		69,850
	4.50	%	Mar-2018 - May-2044		82,721		86,290		90,440
	5.00	%	Sep-2016 - Apr-2041		24,757		25,545		27,362
	5.50	%	Jul-2017 - Jun-2038		13,535		13,583		15,268
	6.00	%	Jan-2017 - Nov-2037		7,938		7,985		9,120
	6.50	%	Nov-2016 - Jul-2036		1,434		1,468		1,648
	7.00	%	Nov-2016 - May-2032		1,215		1,216		1,420
	7.50	%	Nov-2016 - Sep-2031		428		428		499
	8.00	%	Apr-2030 - May-2031		72		73		77
	8.50	%	Dec-2021 - Apr-2031		51		52		57
	9.00	%	May-2025		1		1		1
					544,125		555,892		570,495
Multifamily	0.82	%	Nov-2025		22,318		22,330		22,373
	0.88	%	Nov-2022		22,815		22,827		22,890
	1.01	%	Dec-2025		21,015		21,027		21,009
	1.07	%	Jan-2023		18,134		18,144		18,154
	1.11	%	Jan-2026		5,000		5,003		5,002
	1.33	%	Jan-2023		29,903		29,880		30,022
	1.39	%	Apr-2022		10,075		10,080		10,088
	2.21	%	Dec-2022		31,569		31,592		32,431
	2.21	%	Dec-2022		23,959		23,976		24,613
	2.24	%	Dec-2022		31,601		31,625		32,488
	2.26	%	Nov-2022		6,561		6,593		6,762
	2.48	%	Jul-2021		45,000		45,120		46,463

10 SEMI–ANNUAL REPORT 2016 (continued)

SCHEDULE OF PORTFOLIO INVESTMENTS

June 30, 2016 (Dollars in thousands; unaudited)

Fannie Mae Securities (35.5% of net assets), continued

Interest Rate		Maturity Date		Face Amount		Amortized Cost		Value
2.50	%	Jun-2026	$	60,000	$	60,000	$	61,557
2.70	%	Nov-2025		16,428		16,460		17,250
2.80	%	Mar-2018 - Apr-2025		20,589		21,002		21,372
2.84	%	Mar-2022		3,640		3,660		3,883
2.85	%	Mar-2022		33,000.00		33,094		35,213
2.91	%	Jun-2031		25,000		25,288		25,435
2.92	%	Jan-2026 - Apr-2028		34,255		34,430		36,463
2.99	%	Jun-2025		2,750		2,765		2,943
3.00	%	Mar-2028		9,360		9,371		9,832
3.02	%	Jun-2027		4,109		4,131		4,438
3.04	%	Apr-2030		25,100		25,249		26,625
3.05	%	Apr-2030		28,800		28,854		29,775
3.12	%	Apr-2030		14,000		14,008		14,881
3.18	%	May-2035		12,130		12,371		12,574
3.20	%	Oct-2027		10,894		11,002		11,909
3.21	%	May-2030		7,367		7,554		7,894
3.22	%	Sep-2026		28,451		28,517		31,147
3.25	%	Nov-2027		10,895		11,003		11,954
3.26	%	Jan-2027		7,851		7,897		8,577
3.31	%	Oct-2027		16,320		16,606		17,965
3.36	%	Dec-2023 - Oct-2029		20,369		20,433		22,455
3.40	%	Oct-2026		3,117		3,146		3,459
3.41	%	Sep-2023		14,145		14,315		15,526
3.42	%	Apr-2035		5,555		5,674		6,022
3.43	%	Oct-2026		7,608		7,677		8,456
3.46	%	Dec-2023		3,500		3,519		3,868
3.54	%	Oct-2021		7,282		7,309		7,976
3.61	%	Sep-2023		6,656		6,734		7,387
3.63	%	Jul-2035		21,987		22,032		23,975
3.66	%	Jul-2021		111,846		111,933		122,370
3.66	%	Oct-2023		4,890		4,957		5,425
3.77	%	Dec-2033		10,500		10,788		11,213
3.84	%	May-2018		7,140		7,345		7,462
3.87	%	Sep-2023		2,567		2,641		2,855
4.00	%	Sep-2021		15,462		15,472		16,335
4.03	%	Oct-2021		6,999		7,004		7,701
4.06	%	Oct-2025		24,647		24,753		27,535
4.15	%	Jun-2021		9,128		9,139		10,089
4.22	%	Jul-2018		1,102		1,102		1,136
4.25	%	May-2021		4,180		4,180		4,634
4.27	%	Nov-2019		5,870		5,867		6,360
4.32	%	Nov-2019		2,900		2,899		3,146
4.33	%	Nov-2019 - Mar-2021		24,469		24,465		26,631
4.38	%	Apr-2020		9,960		9,967		10,918
4.44	%	May-2020		5,905		5,907		6,497
4.49	%	Jun-2021		961		967		1,075
4.50	%	Feb-2020		4,143		4,142		4,333
4.52	%	Nov-2019 - May-2021		7,041		7,066		7,796
4.55	%	Nov-2019		2,776		2,775		3,029

	(continued)
AFL-CIO HOUSING INVESTMENT TRUST	11

SCHEDULE OF PORTFOLIO INVESTMENTS

June 30, 2016 (Dollars in thousands; unaudited)

Fannie Mae Securities (35.5% of net assets), continued

Interest Rate		Maturity Date		Face Amount		Amortized Cost		Value
4.56	%	Jul-2019 - May-2021	$	8,258	$	8,270	$	8,989
4.66	%	Jul-2021		1,289		1,296		1,374
4.68	%	Jul-2019		12,817		12,805		13,925
4.69	%	Jan-2020 - Jun-2035		13,714		13,750		15,101
4.71	%	Mar-2021		5,758		5,793		6,476
4.73	%	Feb-2021		1,512		1,520		1,699
4.80	%	Jun-2019		2,093		2,091		2,278
4.86	%	May-2019		1,398		1,397		1,521
4.89	%	Nov-2019		860		861		948
4.94	%	Apr-2019		3,407		3,404		3,708
5.00	%	Jun-2019		1,828		1,827		1,998
5.02	%	Jun-2019		792		793		866
5.04	%	Jun-2019		1,810		1,809		1,980
5.05	%	Jun-2019 - Jul-2019		3,092		3,090		3,387
5.08	%	Apr-2021		40,000		40,001		44,871
5.09	%	Jun-2018		6,164		6,193		6,318
5.11	%	Jul-2019		845		846		927
5.12	%	Jul-2019		8,454		8,446		9,282
5.13	%	Jul-2019		858		858		943
5.15	%	Oct-2022		2,539		2,549		2,705
5.19	%	Jan-2018		668		667		699
5.25	%	Jan-2020		6,623		6,627		7,397
5.29	%	May-2022		5,104		5,104		5,945
5.30	%	Aug-2029		6,071		5,966		7,016
5.45	%	May-2033		2,644		2,653		2,781
5.46	%	Feb-2017		26,433		26,433		26,981
5.47	%	Aug-2024		8,043		8,074		8,815
5.52	%	Mar-2018		571		574		581
5.60	%	Feb-2018 - Jan-2024		10,320		10,321		11,659
5.63	%	Dec-2019		4,765		4,774		5,056
5.69	%	Jun-2041		4,737		4,872		5,475
5.75	%	Jun-2041		2,297		2,372		2,560
5.86	%	Dec-2016		21		21		21
5.91	%	Mar-2037		1,884		1,921		2,130
5.92	%	Dec-2016		15		15		15
5.96	%	Jan-2029		363		365		390
6.03	%	Jun-2017 - Jun-2036		4,690		4,734		4,730
6.06	%	Jul-2034		8,910		9,098		10,034
6.11	%	Aug-2017		3,368		3,368		3,521
6.13	%	Dec-2016		302		302		304
6.14	%	Sep-2033		275		288		292
6.15	%	Jul-2019		31,934		31,934		34,877
6.15	%	Jan-2023-Oct-2032		6,737		6,771		6,697
6.22	%	Aug-2032		1,580		1,603		1,589
6.23	%	Sep-2034		1,301		1,341		1,421
6.28	%	Nov-2028		2,560		2,654		2,756
6.35	%	Aug-2032		9,651		9,674		10,046
6.38	%	Jul-2021		5,151		5,161		6,029
6.39	%	Apr-2019		844		843		831
6.52	%	May-2029		4,744		4,997		5,412

12 SEMI–ANNUAL REPORT 2016 (continued)

SCHEDULE OF PORTFOLIO INVESTMENTS

June 30, 2016 (Dollars in thousands; unaudited)

Fannie Mae Securities (35.5% of net assets), continued

	Interest Rate		Maturity Date		Face Amount		Amortized Cost		Value
	6.63	%	Apr-2019	$	1,915	$	1,915	$	1,939
	6.80	%	Jul-2016		11.00		11		11
	7.18	%	Aug-2016		14.00		14		14
	7.20	%	Aug-2029		785		776		797
	7.75	%	Dec-2024		1,328		1,328		1,333
	8.40	%	Jul-2023		323		321		329
	8.50	%	Nov-2019		1,661		1,695		1,827
					1,277,725		1,282,853		1,361,252
When Issued4	2.44	%	Aug-2026		22,400		22,400		22,458
	2.75	%	Jul-2028		15,750		16,045		16,079
	2.72	%	Jul-2028		36,400		37,026		37,052
	2.50	%	Jul-2023		37,680		37,821		38,558
	2.46	%	Aug-2026		25,830		25,846		26,112
	2.38	%	Jul-2026		21,840		21,901		21,890
					159,900		161,039		162,149
Total Fannie Mae Securities				$	1,981,750	$	1,999,784	$	2,093,896

Freddie Mac Securities (13.1% of net assets)

	Interest Rate		Maturity Date		Face Amount		Amortized Cost		Value
Single Family	0.74	%6	Feb-2036	$	2,111	$	2,111	$	2,107
	0.77	%6	May-2037		325		324		323
	0.79	%6	Apr-2036 - Mar-2045		38,098		38,126		37,882
	0.84	%6	Aug-2043		7,072		7,068		7,044
	0.92	%6	Oct-2040		6,159		6,153		6,163
	0.94	%6	Oct-2040 - Jun-2044		56,996		57,014		56,933
	0.99	%6	Nov-2040		7,037		7,112		7,039
	1.11	%6	Aug-2037		5,831		5,913		5,870
	2.48	%6	Oct-2033		1,177		1,167		1,241
	2.52	%6	Jul-2035		290		290		306
	2.84	%6	Jun-2033		509		508		537
	3.00	%	Aug-2042 - Nov-2043		92,914		95,185		96,683
	3.50	%	Jan-2026 - Nov-2045		171,577		176,925		181,517
	4.00	%	Aug-2020 - Mar-2045		121,378		127,955		130,288
	4.50	%	Aug-2018 - Dec-2044		86,645		91,263		95,059
	5.00	%	Jan-2019 - Mar-2041		16,304		16,538		17,748
	5.50	%	Oct-2017 - Jul-2038		7,235		7,191		8,177
	6.00	%	Aug-2016 - Feb-2038		7,347		7,440		8,474
	6.50	%	Apr-2028 - Nov-2037		1,075		1,088		1,252
	7.00	%	Apr-2028 - Mar-2030		73		67		86
	7.50	%	Aug-2029 - Apr-2031		69		67		83
	8.00	%	Aug-2017 - Feb-2030		18		17		22
	8.50	%	Nov-2018 - Jan-2025		89		89		103
	9.00	%	Mar-2025		57		57		68
					630,386		649,668		665,005
Multifamily	1.10	%	Jan-2023		24,494		24,494		24,566
	1.14	%	Sep-2022		44,088		44,016		44,212
	1.15	%	Nov-2022		35,000		35,000		35,106
	2.95	%	Jan-2018		1,480		1,459		1,497
					105,062		104,969		105,381
Total Freddie Mac Securities				$	735,448	$	754,637	$	770,386

AFL-CIO HOUSING INVESTMENT TRUST 13

SCHEDULE OF PORTFOLIO INVESTMENTS

June 30, 2016 (Dollars in thousands; unaudited)

State Housing Finance Agency Securities (4.1% of net assets)

		Interest Rates5							Face		Amortized
	Issuer	Permanent		Construction		Maturity Date			Amount		Cost		Value
Multifamily	MassHousing	—		3.45	%	Oct-2017	7	$	29,742	$	29,580	$	29,768
	NYC Housing Development Corp	2.95	%	—		Nov-2045			5,000		5,000		5,274
	NYC Housing Development Corp	3.75	%	—		May-2035 - Nov-2035			5,980		5,980		6,284
	MassHousing	4.00	%	—		Dec-2028			5,000		5,103		5,463
	NYC Housing Development Corp	4.04	%	—		Nov-2032			1,305		1,305		1,338
	MassHousing	4.13	%	—		Dec-2036			5,000		5,000		5,348
	MassHousing	4.20	%	—		Dec-2039			8,305		8,305		8,925
	NYC Housing Development Corp	4.25	%	—		Nov-2025			1,150		1,150		1,235
	NYC Housing Development Corp	4.29	%	—		Nov-2037			1,190		1,190		1,222
	NYC Housing Development Corp	4.40	%	—		Nov-2024			4,120		4,120		4,422
	NYC Housing Development Corp	4.44	%	—		Nov-2041			1,120		1,120		1,161
	NYC Housing Development Corp	4.49	%	—		Nov-2044			1,000		1,000		1,040
	NYC Housing Development Corp	4.50	%	—		Nov-2030			1,680		1,682		1,824
	MassHousing	4.50	%	—		Dec-2056			45,000		45,000		48,236
	NYC Housing Development Corp	4.60	%	—		Nov-2030			4,665		4,665		5,080
	NYC Housing Development Corp	4.70	%	—		Nov-2035			1,685		1,685		1,837
	NYC Housing Development Corp	4.78	%	—		Aug-2026			12,500		12,503		13,268
	NYC Housing Development Corp	4.80	%	—		Nov-2040			2,860		2,862		3,093
	NYC Housing Development Corp	4.90	%	—		Nov-2034 - Nov-2041			8,800		8,800		9,579
	NYC Housing Development Corp	4.95	%	—		Nov-2039 - May-2047			13,680		13,683		14,855
	MassHousing	5.55	%	—		Nov-2039			5,000		4,982		5,610
	MassHousing	5.69	%	—		Nov-2018			2,300		2,301		2,422
	MassHousing	5.70	%	—		Jun-2040			13,385		13,386		14,452
	MassHousing	6.42	%	—		Nov-2039			22,000		22,000		23,677
	MassHousing	6.50	%	—		Dec-2039			695		696		719
	MassHousing	6.58	%	—		Dec-2039			11,385		11,386		11,784
	MassHousing	6.70	%	—		Jun-2040			10,990		10,990		11,804
Total State Housing Finance Agency Securities								$	225,537	$	225,474	$	239,720

Other Multifamily Investments (0.3% of net assets)

	Interest Rates5				Maturity		Unfunded		Face		Amortized
Issuer	Permanent		Construction		Date		Commitments2		Amount		Cost		Value
Direct Loans
Harry Silver Housing Company, Inc.	—		2.70	%	Oct-2016	$	—	$	5,197	$	5,201	$	5,200
Harry Silver Housing Company, Inc.	—		2.70	%	Oct-2016		2,803		—		—		2
							2,803		5,197		5,201		5,202
Privately Insured Construction/Permanent Mortgages8
IL Housing Development Authority	5.40	%	—		Mar-2047		—		8,239		8,240		8,161
IL Housing Development Authority	6.20	%	—		Dec-2047		—		3,113		3,124		3,085
IL Housing Development Authority	6.40	%	—		Nov-2048		—		940		952		927
							—		12,292		12,316		12,173
Total Other Multifamily Investments						$	2,803	$	17,489	$	17,517	$	17,375

14 SEMI–ANNUAL REPORT 2016

SCHEDULE OF PORTFOLIO INVESTMENTS

June 30, 2016 (Dollars in thousands; unaudited)

Commercial Mortgage-Backed Securities (2.5% of net assets)

Issuer	Interest Rate		Maturity Date		Face Amount		Amortized Cost		Value
Nomura	2.77	%	Dec-2045	$	10,000	$	10,173	$	10,443
Deutsche Bank	2.94	%	Jan-2046		19,070		19,556		20,098
Nomura	3.19	%	Mar-2046		20,000		20,417		21,192
JP Morgan	3.48	%	Jun-2045		10,000		10,487		10,772
Citigroup	3.62	%	Jul-2047		8,000		8,221		8,730
Barclays/ JP Morgan	3.81	%	Jul-2047		2,250		2,312		2,471
RBS/ Wells Fargo	3.82	%	Aug-2050		5,000		5,139		5,500
Deutsche Bank/UBS	3.96	%	Mar-2047		5,000		5,137		5,511
Barclays/ JP Morgan	4.00	%	Apr-2047		5,000		5,138		5,567
Cantor/Deutsche Bank	4.01	%	Apr-2047		20,000		20,550		22,242
Barclays/ JP Morgan	4.08	%	Feb-2047		6,825		7,189		7,639
Cantor/Deutsche Bank	4.24	%	Feb-2047		7,000		7,190		7,921
Deutsche Bank	5.00	%	Nov-2046		18,990		19,459		21,275
Total Commercial Mortgage Backed Securities				$	137,135	$	140,968	$	149,361

United States Treasury Securities (10.3% of net assets)

	Interest Rate		Maturity Date		Face Amount		Amortized Cost		Value
	1.63	%	Feb-2026	$	15,000	$	14,680	$	15,169
	1.63	%	May-2026		45,000		44,803		45,552
	2.00	%	Aug-2025		45,000		44,295		47,040
	2.13	%	May-2025		85,000		83,450		89,781
	2.24	%	Nov-2024		65,000		67,042		69,339
	2.25	%	Nov-2025		60,000		61,206		64,013
	2.38	%	Aug-2024		90,000		90,466		96,884
	2.50	%	May-2024		50,000		49,665		54,314
	2.50	%	Feb-2046		15,000		14,310		15,604
	2.50	%	May-2046		35,000		36,326		36,434
	2.88	%	Aug-2045		10,000		10,264		11,210
	3.13	%	Aug-2044		55,000		56,785		64,664
Total United States Treasury Securities				$	570,000	$	573,292	$	610,004
Total Fixed-Income Investments				$	5,608,416	$	5,693,348	$	5,926,833

AFL-CIO HOUSING INVESTMENT TRUST 15

SCHEDULE OF PORTFOLIO INVESTMENTS

June 30, 2016 (Dollars in thousands; unaudited)

Equity Investment in Wholly Owned Subsidiary (less than 0.05% of net assets)

Issuer	Number of Shares	Face Amount (Cost)		Amount of Dividends		Value
Building America CDE, Inc.1,9	1,000	$	1	$	—	$	75
Total Equity Investment	1,000	$	1	$	—	$	75

Short-Term Investments (2.3% of net assets)

Fund	Yield			Maturity Date	Face Amount		Amortized Cost		Value
Blackrock Federal Funds 30-Day (Institutional)		0.29	%	Jul-2016		134,082		134,082		134,082
Total Short-Term Investments					$	134,082	$	134,082	$	134,082
Total Investments					$	5,742,499	$	5,827,431	$	6,060,990

Footnotes

¹ Valued by the HIT’s Valuation Committee in accordance with the fair value procedures adopted by the HIT’s Board of Trustees.

² The HIT may make commitments in securities or loans that fund over time on a draw basis or forward commitments that fund at a single point in time. The unfunded amount of these commitments totaled $151.3 million at period end. Generally, GNMA construction securities fund over a 12-to 24-month period. Funding periods for State Housing Finance Agency construction securities and Direct Loans vary by deal, but generally fund over a zero- to 48-month period. Forward commitments generally settle within 12 months of the original commitment date.

³ Tax-exempt bonds collateralized by Ginnie Mae securities.

⁴ The HIT records when issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when issued basis are marked to market monthly. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.

⁵ 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.

⁶ The coupon rate shown on these floating or adjustable rate securities represents the rate at period end.

⁷ Securities exempt from registration under the Securities Act of 1933 and were privately placed directly by MassHousing (a not-for-profit public agency) with the HIT. The notes are for construction only and will mature on or prior to October 1, 2017. The notes are backed by mortgages and are general obligations of MassHousing, therefore 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.

⁸ Loans insured by Ambac Assurance Corporation, which are additionally backed by a repurchase option from the mortgagee for the benefit of the HIT. The repurchase price is defined as the unpaid principal balance of the loan plus all accrued unpaid interest due through the remittance date. The repurchase option can be exercised by the HIT in the event of a payment failure by Ambac Assurance Corporation.

⁹ The HIT holds the shares of Building America CDE, Inc. (Building America or BACDE), a wholly owned subsidiary of the HIT. Building America is a Community Development Entity, certified by the Community Development Financial Institutions Fund of the U.S. Department of Treasury. The fair value of the HIT’s investment in BACDE approximates its carrying value.

16 SEMI–ANNUAL REPORT 2016

STATEMENT OF OPERATIONS

For the Six Months Ended June 30, 2016 (Dollars in thousands; unaudited) 

Investment income		$	79,781
Expenses
	Non-officer salaries and fringe benefits		5,085
	Officer salaries and fringe benefits		2,928
	Consulting fees		703
	Investment management		642
	Marketing and sales promotion (12b-1)		563
	Legal fees		478
	Auditing, tax and accounting fees		253
	Insurance		188
	Trustee expenses		25
	Rental expenses		587
	General expenses		833
	Total expenses		12,285
Net investment income			67,496
Net realized and unrealized gains (losses) on investments
	Net realized gain on investments		22,279
	Net change in unrealized appreciation on investments		161,284
Net realized and unrealized gains on investments			183,563
Net increase in net assets resulting from operations		$	251,059

See accompanying Notes to Financial Statements

AFL-CIO HOUSING INVESTMENT TRUST 17

STATEMENTS OF CHANGES IN NET ASSETS

(Dollars in thousands)

		Six Months Ended
		June 30, 2016			Year Ended
Increase (decrease) in net assets from operations		(unaudited)			December 31, 2015
	Net investment income	$	67,496		$	131,326
	Net realized gain (loss) on investments		22,279			17,357
	Net change in unrealized appreciation (depreciation) on investments		161,284			(94,968	)
	Net increase (decrease) in net assets resulting from operations		251,059			53,715
Decrease in net assets from distributions
	Distributions to participants or reinvested from:
	Net investment income		(74,694	)		(142,621	)
	Net decrease in net assets from distributions		(74,694	)		(142,621	)
Increase (decrease) in net assets from unit transactions
	Proceeds from the sale of units of participation		255,154			601,394
	Dividend reinvestment of units of participation		67,400			129,235
	Payments for redemption of units of participation		(53,619	)		(45,778	)
	Net increase (decrease) from unit transactions		268,935			684,851
Total increase (decrease) in net assets			445,300			595,945
Net assets
	Beginning of period	$	5,455,282		$	4,859,337
	End of period	$	5,900,582		$	5,455,282
Distribution in excess of net investment income		$	(2,233	)	$	(2,409	)
Unit information
	Units sold		223,805			530,460
	Distributions reinvested		58,898			113,611
	Units redeemed		(46,984	)		(40,410	)
	Increase in units outstanding		235,719			603,661

See accompanying Notes to Financial Statements.

18 SEMI–ANNUAL REPORT 2016

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.

Participation in the HIT is limited to eligible pension plans and labor organizations, including health and welfare, 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. The HIT follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946 Financial Services – Investment Companies.

Investment Valuation

Net asset value per share (NAV) is calculated as of the close of business of the major bond markets in New York City on the last business day of each month. Following is a description of the valuation methods and inputs applied to the HIT’s major categories of assets.

Portfolio securities for which market quotations are readily available are valued by using independent pricing services. For U.S. Treasury securities, independent pricing services generally base prices on actual transactions as well as dealer supplied market information. For state housing finance agency securities, independent pricing services generally base prices using models that utilize trading spreads, new issue scales, verified bid information, and credit ratings. For commercial mortgage-backed securities independent pricing services generally base prices on cash flow models, that take into consideration benchmark yields, and utilize available trade information, dealer quotes, and market color.

For U.S. agency and government-sponsored enterprise securities, including single family and multifamily mortgage-backed securities, construction mortgage securities and loans, and collateralized mortgage obligations, independent pricing services generally base prices on an active TBA (“to-be-announced”) market for mortgage pools, discounted cash flow models or option-adjusted spread models. Independent pricing services examine reference data and use observable inputs such as issue name, issue size, ratings, maturity, call type and spread/benchmark yields, as well as, dealer supplied market information. The discounted cash flow or option-adjusted spread models utilize inputs from matrix pricing which consider observable market-based discount and prepayment rates, attributes of the collateral, and yield or price of bonds of comparable quality, coupon, maturity, and type.

Investments in registered open-end investment management companies are valued based upon the NAVs of such investments.

When 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.

Portfolio investments for which market quotations are not readily available or deemed unreliable are valued at their fair value determined in good faith by the HIT’s Valuation Committee using consistently applied procedures adopted by the HIT’s Board of Trustees. In determining fair market value, the Valuation Committee will employ a valuation method that it believes reflects fair value for that asset, which may include the referral of the asset to an independent valuation consultant or the utilization of a discounted cash flow model based on broker and/or other market inputs. The frequency with which these fair value procedures may be used by the Board of Trustees cannot be predicted. However, on June 30, 2016, the HIT fair valued less than 0.05% of the HIT’s net assets.

Short-term investments acquired with a stated maturity of 60 days or less are generally valued at amortized cost, which approximates fair market value.

The HIT holds the shares of Building America CDE, Inc. (Building America or BACDE), a wholly owned subsidiary of the HIT. The shares of Building America are valued at their fair value determined in good faith under consistently applied procedures adopted by the HIT’s Board of Trustees, which approximates Building America’s carrying value.

The HIT’s Board of Trustees is responsible for the valuation process and has delegated the supervision of the valuation process to a Valuation Committee. The Valuation Committee, in accordance with the policies and procedures adopted by the HIT’s Board of Trustees, is responsible for evaluating the effectiveness of the HIT’s pricing policies, determining the reliability of third-party pricing information, and reporting to the Board of Trustees on valuation issues, including fair value determinations.

AFL-CIO HOUSING INVESTMENT TRUST 19

NOTES TO FINANCIAL STATEMENTS

(unaudited)

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.

The following table presents the HIT’s valuation levels as of June 30, 2016: 

Investment securities: ($ in thousands)		Level 1		Level 2		Level 3		Total
FHA Permanent Securities
Multi-Family	$	—	$	160,220	$	—	$	160,220
Single Family		—		—		9		9
Total FHA Permanent Securities		—		160,220		9		160,229
Ginnie Mae Securities		—		1,697,571		—		1,697,571
Ginnie Mae Construction Securities		—		183,994		—		183,994
Fannie Mae Securities		—		1,931,747		—		1,931,747
Freddie Mac Securities		—		770,386		—		770,386
Commercial Mortgage-Backed Securities		—		149,361		—		149,361
State Housing Finance Agency Securities		—		239,720		—		239,720
Other Multifamily Investments
Direct Loans		—		—		5,202		5,202
Privately Insured Construction/Permanent Mortgages		—		12,173		—		12,173
Total Other Multifamily Investments		—		12,173		5,202		17,375
United States Treasury Securities		—		610,004		—		610,004
Equity Investments		—		—		75		75
Short-Term Investments		134,082		—		—		134,082
Other Financial Instruments*		—		166,446		—		166,446
Total	$	134,082	$	5,921,622	$	5,286	$	6,060,990

*If held in the portfolio at report date, other financial instruments include forward commitments, TBA and when issued securities.

The following table reconciles the valuation of the HIT’s Level 3 investment securities and related transactions for the period ended June 30, 2016:

Investments in Securities ($ in thousands)	FHA Permanent Securities			Other Multifamly Investments		Equity Investment			Total
Beginning Balance, 12/31/2015	$	10		$	5,180	$	(5	)	$	5,185
Amortization/Accretion		—			21		—			21
Total Unrealized Gain (Loss)*		—			1		80			81
Paydowns		(1	)		—		—			(1	)
Ending Balance, 6/30/2016	$	9		$	5,202	$	75		$	5,286

* Net change in unrealized gain (loss) attributable to Level 3 securities held at June 30, 2016 totaled $34,000 and is included on the accompanying Statement of Operations.

Level 3 securities primarily consist of two Direct Loans (Other Multifamily Investments) which were valued by an independent pricing service near par at June 30, 2016 due to: a coupon rate of 2.70%, low loan-to-value estimates, and remaining expected maturities of 4 months or less. The HIT’s policy is to recognize transfers between levels at the beginning of the reporting period. For the six months ended June 30, 2016, 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.

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 for all open years 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.

20 SEMI–ANNUAL REPORT 2016

NOTES TO FINANCIAL STATEMENTS

(unaudited)

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 90% of distributed income for the six months ended June 30, 2016.

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 six months ended June 30, 2016, the HIT was authorized to pay 12b-1 expenses in an annual amount up to $600,000 or 0.05% of its average monthly net assets, whichever was greater. During the six months ended June 30, 2016, the HIT incurred approximately $563,000, or less than 0.01% of its average monthly net assets, in 12b-1 expenses.

New Accounting Pronouncement

In February 2016, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) No. 2016-02, Leases, which intends to improve financial reporting about leasing transactions. The ASU affects all companies and other organizations that lease assets such as real estate and equipment. The new disclosure is effective for annual or interim periods beginning on or after December 15, 2019. Management is evaluating the impact of this update on its financial statements and disclosures.

Note 2. Investment Risk

Interest Rate Risk

As with any fixed-income investment, the market value of the HIT’s investments will generally fall at times when market interest rates rise. 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.

Prepayment risk is the risk that a security will pay more quickly than its assumed payment rate, shortening its expected average life. 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. 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.

AFL-CIO HOUSING INVESTMENT TRUST 21

NOTES TO FINANCIAL STATEMENTS

(unaudited)

Note 3. Transactions with Related Entities

Building America is a Community Development Entity, certified by the Community Development Financial Institutions Fund (CDFI Fund) of the U.S. Department of the Treasury. Building America has committed all of its $85 million in New Markets Tax Credit (NMTC) awards to qualified transactions. Building America receives fees for committing NMTCs to such qualified transactions and ongoing asset management fees on closed transactions. Building America is accounted for as an investment of the HIT.

The NMTC program¹, which is run by the CDFI Fund, provides tax credits to equity investors that invest in businesses operating in low-income areas, including those that engage in the creation of housing and other construction activities.

¹The New Markets Tax Credit (NMTC) Program, enacted by Congress as part of the Community Renewal Tax Relief Act of 2000, is incorporated as section 45D of the Internal Revenue Code.

Summarized financial information for Building America on a historical cost basis is included in the table below:
As of June 30, 2016	$ in Thousands
Assets	$	423
Liabilities	$	348
Equity	$	75
For the six months ended June 30, 2016
Income	$	281
Expenses		(165	)
Tax expenses		(35	)
Net Income	$	81

In accordance with a contract, in addition to its equity interest, the HIT provides Building America advances to assist with its operations and cash flow management as needed. Advances are repaid as cash becomes available. Also in accordance with the contract, the HIT provides the time of certain personnel to Building America on a cost-reimbursement basis. As of June 30, 2016, advances to Building America by the HIT totaled $256,000, which represents less than 0.01% of HIT’s average monthly net assets.

A rollforward of advances to Building America by the HIT is included in the table below:

Advances to BACDE by HIT	$ in Thousands
Beginning Balance, 12/31/2015	$	261
Advances in 2016		215
Repayment by BACDE in 2016		(220	)
Ending Balance, 6/30/2016	$	256

Note 4. Commitments and Contingencies

The HIT may make commitments in securities or loans that fund over time on a draw basis or forward commitments that fund at a single point in time. The HIT agrees to an interest rate and purchase price for these securities or loans when the commitment to purchase is originated.

Certain assets of the HIT are invested in liquid investments until they are required to fund these purchase commitments. As of June 30, 2016, the HIT had outstanding unfunded purchase commitments of approximately $151.3 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, 2016, the value of the publicly traded securities maintained for the reserve in a segregated account was approximately $5.7 billion.

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, 2016, were $918.3 million and $10.0 million, respectively.

Note 6. Income Taxes

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 were adjusted for permanent book/tax differences of $7.2 million as of June 30, 2016 to reflect tax character. 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, 2016.

At June 30, 2016, the cost of investments for federal income tax purposes was $5,827,430,500 which approximated book cost at amortized cost. Net unrealized gain aggregated $233,559,000 at period-end, of which $241,810,000 related to appreciated investments and $8,251,000 related to depreciated investments.

22 SEMI–ANNUAL REPORT 2016

NOTES TO FINANCIAL STATEMENTS

(unaudited)

Note 7. Retirement and Deferred Compensation Plans

The HIT participates in the AFL-CIO Staff Retirement Plan (Plan), which is a multiemployer defined benefit pension plan, under the terms of a collective-bargaining agreement. The Plan covers substantially all employees, including non-bargaining unit employees. The risks of participating in a multiemployer plan are different from a single-employer plan in the following aspects:

a. Assets contributed to a multiemployer plan by one employer may be used to provide benefits to employees of other participating employers.

b. If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers based on their level of contributions to the plan.

c. If the HIT chooses to stop participating in its multiemployer plan, the HIT may be required to pay the plan an amount based on the HIT’s share of the underfunded status of the plan, referred to as a withdrawal liability.

The HIT’s participation in the Plan for the period ended June 30, 2016, is outlined in the table below. The “EIN/Pension Plan Number” line provides the Employee Identification Number (EIN) and the three-digit plan number. The most recent Pension Protection Act (PPA) zone status available in 2016 is for the 2014 Plan year-ended at June 30, 2015. The zone status is based on information that the HIT received from the Plan and is certified by the Plan’s actuary. Among other factors, plans in the red zone are generally less than 65% funded, plans in the yellow zone are less than 80% funded, and plans in the green zone are at least 80% funded. The “FIP/RP Status Pending/ Implemented” line indicates whether a financial improvement plan (FIP) or a rehabilitation plan (RP) is either pending or has been implemented.

Pension Fund: AFL-CIO Staff Retirement Plan
EIN/Pension Plan Number	53-0228172/001
2014 Plan Year PPA Zone Status	Green
FIP/RP Status Pending/ Implemented	No
2016 Contributions	1,097,409
2016 Contribution Rate	24%
Surcharge Imposed	no
Expiration Date of Collective Bargaining Agreement	03/31/2017

The HIT was listed in the Plan’s Form 5500 as providing more than 5% of the total contributions for the following plan year:

Pension Fund	Years Contributions to Plan Exceeded More Than 5 Percent of Total Contributions
AFL-CIO Staff Retirement Plan	20141

¹ The 2014 plan year ended at June 30, 2015.

At the date the HIT financial statements were issued, the Plan’s Form 5500 was not available for the plan year ended June 30, 2016.

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 Internal Revenue Service limit. During 2016, the HIT matched dollar for dollar the first $5,800 of each employee’s contributions. The HIT’s 401(k) contribution for the six months ended June 30, 2016, was approximately $234,400.

Note 8. Loan Facility

The HIT has a $15 million uncommitted loan facility which expires on June 13, 2017. Under this facility, borrowings bear interest per annum equal to 1.25% plus the highest of (a) the Federal Funds Effective Rate, (b) the Overnight Eurodollar Rate, or (c) the one-month LIBOR. The HIT did not borrow against the facility during, and had no outstanding balance under the facility for, the six months ended June 30, 2016. 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 any prior claims or losses pursuant to these contracts and expects the risk of loss to be low.

AFL-CIO HOUSING INVESTMENT TRUST 23

FINANCIAL HIGHLIGHTS

	Six Months Ended
	June 30, 2016**									Year Ended December 31
Per share data	(unaudited)			2015			2014			2013			2012			2011
Net asset value, beginning of period	$	1,121.13		$	1,140.10		$	1,107.45		$	1,171.21		$	1,170.21		$	1,133.82
Income from investment operations:
Net investment income *		13.48			29.41			32.48			34.11			38.55			43.58
Net realized and unrealized gains (losses) on investments		37.02			(16.43	)		34.38			(61.53	)		10.81			43.81
Total income (loss) from investment operations		50.50			12.98			66.86			(27.42	)		49.36			87.39
Less distributions from:
Net investment income		(15.02	)		(31.95	)		(34.21	)		(36.33	)		(40.74	)		(45.52	)
Net realized gains on investments		—			—			—			(0.01	)		(7.62	)		(5.48	)
Total distributions		(15.02	)		(31.95	)		(34.21	)		(36.34	)		(48.36	)		(51.00	)
Net asset value, end of period	$	1,156.62		$	1,121.13		$	1,140.10		$	1,107.45		$	1,171.21		$	1,170.21
Ratios/supplemental data
Ratio of expenses to average net assets		0.43	%		0.43	%		0.43	%		0.43	%		0.42	%		0.44	%
Ratio of net investment income to average net assets		2.4	%		2.6	%		2.9	%		3.0	%		3.3	%		3.8	%
Portfolio turnover rate		24.0	%		18.9	%		18.3	%		29.5	%		27.3	%		33.9	%
Number of outstanding units at end of period		5,101,598			4,865,879			4,262,218			4,077,108			3,906,752			3,642,485
Net assets, end of period (in thousands)	$	5,900,582		$	5,455,282		$	4,859,337		$	4,515,201		$	4,575,635		$	4,262,471
Total return		4.52	%		1.13	%		6.10	%		(2.37	%)		4.27	%		7.86	%

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

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

See accompanying Notes to Financial Statements.

Job and economic benefit figures in this report are provided by Pinnacle Economics, Inc. and HIT. Estimates are calculated using an IMPLAN input-output model based on HIT project data and secondary source materials. In 2015 dollars.

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.

This report contains forecasts, estimates, opinions, and/or other information that is subjective. Statements concerning economic, financial, or market trends are based on current conditions, which will fluctuate. There is no guarantee that such statements will be applicable under all market conditions, especially during periods of downturn. Actual outcomes and results may differ significantly from the views expressed. It should not be considered as investment advice or a recommendation of any kind.

24 SEMI–ANNUAL REPORT 2016

Leadership

BOARD OF TRUSTEES 

Richard Ravitch*
Chairman
Manager, Waterside Plaza LLC; formerly Lieutenant Governor, State of New York  Richard L. Trumka*
President, AFL-CIO Liz Shuler
Secretary-Treasurer, AFL-CIO Vincent Alvarez
President, New York City Central Labor Council James Boland
President, International Union of Bricklayers and Allied Craftworkers Sean McGarvey
President, North America’s Building Trades Unions  Jack Quinn
President, Erie County Community College, State University of New York; formerly Member of Congress, 27th District, New York Kenneth E. Rigmaiden
General President, International Union of Painters & Allied Trades of the United States and Canada Marlyn J. Spear, CFA*
Chief Investment Officer, Building Trades United Pension Trust Fund (Milwaukee and Vicinity) Tony Stanley*
Director, TransCon Builders, Inc.; formerly Executive Vice President, TransCon Builders, Inc. * Executive Committee member.

OFFICERS AND KEY STAFF 

Stephen Coyle
Chief Executive Officer Theodore S. Chandler
Chief Operating Officer  Erica Khatchadourian
Chief Financial Officer  Chang Suh, CFA
Senior Executive Vice President & Chief Portfolio Manager  Nicholas C. Milano
General Counsel Debbie Cohen
Chief Development Officer Christopher Kaiser
Chief Compliance Officer & Deputy General Counsel  Thalia B. Lankin
Director of Operations Carol Nixon
Director, New York City Office  Harpreet Singh Peleg, CFA, CPA
Controller Eric W. Price
Executive Vice President Lesyllee White
Executive Vice President & Managing Director of Marketing Stephanie H. Wiggins
Executive Vice President & Chief Investment Officer

SERVICE PROVIDERS

Independent Registered Public
Accounting Firm
Ernst & Young LLP
McLean, Virginia Corporate Counsel
Katten Muchin Rosenman LLP
Washington, D.C. Securities Counsel
Perkins Coie LLP
Washington, D.C. Transfer Agent
BNY Mellon Investment
Servicing (US) Inc.
Wilmington, Delaware Custodian
Bank of New York Mellon
New York, New York

AFL-CIO HOUSING INVESTMENT TRUST

National Office	New England Regional Office	Southern California Office
2401 Pennsylvania Avenue, N.W., Suite 200	Ten Post Office Square, Suite 800	155 N. Lake Avenue, Suite 800
Washington, D.C. 20037	Boston, Massachusetts 02109	Pasadena, CA 91101
(202) 331-8055	(617) 850-9071	(626) 993-6676
New York City Office	Western Regional Office
1270 Avenue of the Americas, Suite 210	One Sansome Street, Suite 3500
New York, New York 10020	San Francisco, California 94104
(212) 554-2750	(415) 433-3044

AFL-CIO HOUSING INVESTMENT TRUST 25

AFL-CIO HOUSING INVESTMENT TRUST

2401 Pennsylvania Avenue, N.W., Suite 200

Washington, DC 20037

202-331-8055

www.aflcio-hit.com

bug

Item 2. Code of Ethics.

Not applicable for semi-annual reports.

Item 3. Audit Committee Financial Expert.

Not applicable for semi-annual reports.

Item 4. Principal Accountant Fees and Services.

Not applicable for semi-annual reports.

Item 5. Audit Committee.

Not applicable.

Item 6. Schedule of Investments.

Schedule I - Investments in securities of unaffiliated issuers required by Item 6(a) is included herein under Item 1.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable.

Item 8. Portfolio Managers of Closed-End Management Investment Companies.

Not applicable.

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

Not applicable.

Item 10. Submission of Matters to a Vote of Security Holders.

No material changes have been made to the procedures by which participants may recommend nominees to the Board of Trustees of the Trust, where those changes were implemented after the Trust last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)) or this Item 10.

Item 11. Controls and Procedures.

(a) The Trust’s Chief Executive Officer (the principal executive officer) and Chief Financial Officer (the principal financial officer) have concluded that the design and operation of the Trust’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Act (17 CFR 270.30a-3(c)) are generally effective to provide reasonable assurance that information required to be disclosed by the Trust in this report is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, based on their evaluation of the effectiveness of the design and operation of such controls and procedures as of a date within 90 days of the filing of this report.

(b) There was no change in the Trust’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d)) that occurred during the Trust’s second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Trust’s internal control over financial reporting.

Item 12. Exhibits.

(a) (1) Not applicable.

(2)	Separate certifications for the Chief Executive Officer (the principal executive officer) and Chief Financial Officer (the principal financial officer) of the registrant as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2(a)) are filed as Exhibits herewith.
(3)	Not Applicable.

(b) Separate certification for the Chief Executive Officer (the principal executive officer) and Chief Financial Officer (the principal financial officer) of the registrant as required by Rule 30a-2(b) under the Act (17 CFR 270.30a-2(b)) are filed as Exhibits herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Trust has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

AFL-CIO HOUSING INVESTMENT TRUST 

By:	/s/ Stephen Coyle
Name:	Stephen Coyle
Title:	Chief Executive Officer
	(Principal Executive Officer)
Date:	September 1, 2016

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Trust and in the capacities and on the dates indicated.

/s/ Stephen Coyle

Stephen Coyle

Chief Executive Officer

(Principal Executive Officer)

Date: September 1, 2016

/s/ Erica Khatchadourian

Erica Khatchadourian

Chief Financial Officer

(Principal Financial Officer)

Date: September 1, 2016

EX-99.(A)(2) CERT

AFL-CIO Housing Investment Trust - N-CSRS

Exhibit (a)(2)

Certification

I, Stephen Coyle, certify that:

1. I have reviewed this report on Form N-CSRS of the AFL-CIO Housing Investment Trust (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of trustees (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Stephen Coyle

Stephen Coyle

Chief Executive Officer

(Principal Executive Officer)

AFL-CIO Housing Investment Trust

Date: September 1, 2016

EX-99.(A)(2) CERT

AFL-CIO Housing Investment Trust - N-CSRS

Exhibit (a)(2)

Certification

I, Erica Khatchadourian, certify that:

1. I have reviewed this report on Form N-CSRS of the AFL-CIO Housing Investment Trust (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of trustees (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Erica Khatchadourian

Erica Khatchadourian

Chief Financial Officer

(Principal Financial Officer)

AFL-CIO Housing Investment Trust

Date: September 1, 2016

EX-99.(B) CERT

AFL-CIO Housing Investment Trust - N-CSRS

Exhibit (b)

Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

AFL-CIO Housing Investment Trust

In connection with the report on Form N-CSRS of the AFL-CIO Housing Investment Trust that is accompanied by this certification (the “Report”), the undersigned hereby certifies that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Trust.

Dated: September 1, 2016

/s/ Stephen Coyle

Stephen Coyle

Chief Executive Officer

(Principal Executive Officer)

AFL-CIO Housing Investment Trust

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the AFL-CIO Housing Investment Trust and will be retained by the AFL-CIO Housing Investment Trust and furnished to the Securities and Exchange Commission or its staff upon request.

EX-99.(B) CERT

AFL-CIO Housing Investment Trust - N-CSRS

Exhibit (b)

Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

AFL-CIO Housing Investment Trust

In connection with the report on Form N-CSRS of the AFL-CIO Housing Investment Trust that is accompanied by this certification (the “Report”), the undersigned hereby certifies that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Trust.

Dated: September 1, 2016

/s/ Erica Khatchadourian

Erica Khatchadourian

Chief Financial Officer

(Principal Financial Officer)

AFL-CIO Housing Investment Trust

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the AFL-CIO Housing Investment Trust and will be retained by the AFL-CIO Housing Investment Trust and furnished to the Securities and Exchange Commission or its staff upon request.