CREF Policy Update: June 1, 2023
FHFA Director Thompson Testifies Before House Financial Services Committee
Last Tuesday, Federal Housing Finance Agency (FHFA) Director Sandra Thompson testified before the House Financial Services Committee (HFSC). Like the recent HFSC Housing & Insurance Subcommittee hearing, much of the discussion focused on the FHFA single-family loan-level pricing adjustment (LLPA) updates to the GSEs’ pricing framework announced in January. There were also questions on credit risk transfers, the GSEs’ equitable housing finance plans, the GSEs’ ongoing conservatorship status, and the debt limit, among other issues. MBA worked with a bipartisan slate of HFSC Members on potential hearing questions. Reps. Roger Williams (R-TX) and Andrew Garbarino (R-NY) asked Director Thompson about the White House’s “Blueprint for a Renters Bill of Rights” and rent control.
Why it matters: In January, the White House put forth a “Blueprint for a Renters Bill of Rights” that included a directive for FHFA to review policies to promote renter protections and review “egregious” rent increases. Hearing questions from elected officials can sometimes place pressure on an agency like FHFA to resolve issues garnering significant attention, including the implementation of specific programs and the nature of enforcement actions. A complete summary of the hearing can be found here.
What’s next: MBA will continue its engagement with FHFA, lawmakers, and industry stakeholders to stress the importance of increasing affordable housing supply and avoiding unnecessary regulations such as rent control.
For more information, please contact Alden Knowlton at (202) 557-2741 or Borden Hoskins at (202) 557-2712.
Senior Senators Introduce Bill Making Small Business Tax Parity Provision Permanent
Sen. Steve Daines (R-MT) and other senators recently introduced the “Main Street Tax Certainty Act,” which would make the 20 percent pass-through business tax deduction for Qualified Business Income (QBI) permanent. MBA helped craft a trade coalition letter showing strong support for the legislation.
Why it matters: The 2017 Tax Cuts and Jobs Act created Section 199A of the Internal Revenue Code, which allows pass through businesses to deduct up to 20 percent of qualifying business income. The deduction, which was created to allow LLCs and S Corps relative tax parity with C Corp entities benefiting from a lower corporate tax rate, is currently slated to expire at the end of 2025.
What’s next: Any tax reform legislation introduced during the current divided Congress faces a challenging path to enactment. Nonetheless, maintaining the Section 199A deduction over time remains a key advocacy priority for MBA.
For more information, please contact Ethan Saxon at (202) 557-2913 or Tallman Johnson at (202) 557-2866.
Senators Reintroduce Davis-Bacon Wage Rate Bill
Senators John Thune (R-SD) and Jerry Moran (R-KS) introduced legislation designed to increase affordable housing units across the country by making targeted reforms to requirements under the Davis-Bacon Act. S. 1682, the “Housing Supply Expansion Act,” reflects MBA’s feedback and would address the issue of burdensome split-wage determinations (assigning “building” or “highway” construction wages rates to residential categories) by locking in Davis-Bacon wage rates at the time of application. The Senators’ press release, which includes a copy of the bill and a statement from MBA’s Chief Lobbyist Bill Killmer, can be found here.
Why it matters: The way the Department of Labor (DOL) applies wage rates under the Davis-Bacon Act is critical, and its split-wage determinations for residential housing projects continue to create significant administrative burden and complexity.
What’s next: Any legislative effort related to Davis-Bacon wage rates remains a partisan exercise in Congress, making enactment of S. 1682 (or its House companion bill, H.R. 1053) this year challenging. One year ago, the DOL announced that it is proposing updated regulations implementing Davis-Bacon rates (with no “hard-and-fast” timeline for to finalize the changes).
For more information, please contact Ethan Saxon at (202) 557-2913 or Tallman Johnson at (202) 557-2866.
MBA and Broad Coalition Urge Congress to Promote Housing Supply
A broad coalition of 19 organizations sent a letter to Congress urging lawmakers to pursue bipartisan solutions to increase the supply of housing in all markets and at all price points. The letter outlined many specific proposals, many of which already are contained within existing legislative vehicles.
Why it matters: The rising costs of housing are driven by a lack of supply created by barriers to development combined with today’s inflation.
What’s next: MBA will continue to push policymakers to remove obstacles to housing production and preservation and to address the housing supply problem.
For more information, please contact Ethan Saxon at (202) 557-2913 or Megan Booth at (202) 557-2740.
Rent Control Map and State Trackers
Given the ongoing proposals and ballot initiatives across the country, MBA has published an online map that provides an overview of state and local rent control laws. MBA will follow ongoing developments on this issue and will update the map accordingly.
For more information, please contact William Kooper at (202) 557-2737.
Upcoming MBA Education Webinars on Critical Industry Issues
MBA Education continues to deliver timely single-family and commercial/multifamily programming that covers the spectrum of challenges, obstacles and solutions pertaining to our industry. Below, please see a list of upcoming webinars – which are complimentary to MBA members:
What Trends Will Shape the Lending Space in the Second Half of 2023 – June 1
Profit & Succeed with Down Payment Assistance Programs – June 8
Benchmarking for Performance and the Performance Ratios Every Mortgage Banker Must Know – June 13
MSR Transfers: Balancing Risk, Customer Experience and Efficiency – June 15
How to Leverage Document AI for Unparalleled Efficiency in Loan Production and Loan Servicing – June 27
MBA members can register for any of the above events and view recent webinar recordings by clicking here.
For more information, please contact David Upbin at (202) 557-2931.
