CREF Highlights Aug. 20, 2020

Commercial and multifamily developments and activities from MBA relevant to your business and our industry.

Last Wednesday, MBA convened a member meeting to discuss issues related to Oregon’s recently enacted law (HB 4204/HB 4213) that attempts to address financial hardships caused by the COVID-19 pandemic. On Monday, Aug. 10, MBA, along with the California MBA, convened a webinar to discuss concerns with Propositions 15 and 21, which will be on the California Election Day ballot in November. And finally, MBA’s CREF team has launched a new Diversity and Inclusion Task Force.

To help members keep track of the many pieces of state legislation that can affect CREF members, we have added a new MBA State Legislation Roundup resource below. Please let us know what you think, and please do not hesitate to contact me if you have any questions or feedback.

. Oregon Foreclosure and Forbearance Law Update – and New MBA State Legislation Roundup Resource

On Wednesday,  MBA convened a member call to discuss issues related to Oregon’s recently enacted law (HB 4204/HB 4213) that attempts to address financial hardships caused by the COVID-19 pandemic. The call was led by MBA State Legislative and Regulatory Committee Chair Lisa Klika and featured a panel of experts that included Matt Markee, Lobbyist for the Oregon MBA and President of Markee and Associates; David Shirk, Managing Director of Shirk Law PLLC; and Jesse Calm, Partner at McEwen Gisvold LLC. A recording of the call can be found here.

On Thursday, MBA led an effort to develop a joint trades letter that was shared with Oregon Governor Kate Brown urging her not to extend the “emergency period” of the law beyond the current sunset date of September 30, 2020. In the letter, MBA and other national industry groups argue that the current law undermines the ongoing efforts by our industry to assist homeowners and renters because it creates duplicative – and sometimes contradictory – requirements to those already mandated by the federal CARES Act and the policies of the federal government’s affordable housing programs.

Also on Thursday, the Oregon Division of Financial Regulation (DFR) released a model lender disclosure on Thursday. The guidance applies only to loans on one-to-four-family properties, and is not directly applicable to commercial and multifamily lenders. However, it may provide a useful and credible starting point for commercial and multifamily lenders.

  • Further Resources: Additional resources that may be helpful to commercial and multifamily lenders include the following:
  • New MBA State Legislation Roundup Resource. This new MBA resource provides an up-to-date snapshot of state legislation relevant to our CREF members.
  • Agency Notice: Fannie Mae also recently released its Notice of Accommodations form, which it are requiring for properties secured in Oregon.
  • Oregon AttorneysJesse M. Calm, Partner, McEwen Gisvold LLP; and David Shirk, Managing Director, Shirk Law PLLC, discussed the Notice of Accommodation requirement and other aspects of the new law on Wednesday’s member call about Oregon HB 4204 and HB 4213.
  • Bill Summary and Discussion: A link to MBA’s discussion of the bill can be found here.

  • Oregon MBA: The Oregon MBA website is here.

Why it matters: HB 4204 and HB 4213 provide first-in-the-nation forbearance and eviction measures affecting residential and multifamily lenders and servicers. Notably, the new law requires all lenders authorized to conduct business in the state to send each borrower a written Notice of Accommodations under the law by August 29, 2020.

What’s next: MBA will continue to work with the Oregon MBA to advocate on behalf of the industry in the state.

For more information, please contact Kobie Pruitt at (202) 557-2870 or Grant Carlson at (202) 557-2765.

2. MBA and California MBA Convene a Webinar on California Ballot Initiatives 

On Monday, MBA, along with the California MBA, convened a webinar to discuss concerns with Propositions 15 and 21, which will be on the California Election Day ballot in November. Proposition 15 would amend the state constitution to change commercial property tax assessments and allow for higher assessments on all commercial sites worth more than $3 million. Proposition 21 would significantly expand recently enacted strongest-in-the-nation statewide rent control and renter protections and empower local governments to impose even more restrictive rent control policies of their own.

  • Why it matters: If approved, Proposition 15 would collectively cost businesses in the state up to an additional $12.5 billion annually and would increase the cost of living in some of the most expensive cities in America at exactly the wrong time when the economy in the state and the rest of the country are struggling.

    Proposition 21 would likely create a patchwork of state and local laws that would make lending in the state more costly and affect the availability of affordable credit in the state. Both ballot initiatives are strongly opposed by both the MBA and the California MBA and represent a clear threat to the entire real estate finance industry.
  • What’s next: MBA will continue to work with the California MBA and advocate against these harmful propositions. If you would like to know more, MBA and the California MBA have created issue briefs for both Proposition 15 and Proposition 21.

For more information, please contact Kobie Pruitt at (202) 557-2870 or William Kooper at (202) 557-2737 or Grant Carlson at (202) 557-2765.

CREF Launches Diversity and Inclusion Task Force

The CREF team,with the support of COMBOG and MBA President and CEO Bob Broeksmit, CMB, has launched a new Diversity and Inclusion Task Force. The Task Force will provide a forum for our commercial/multifamily members to have open discussions; share ideas on how each of us is addressing the D&I effort; and, most importantly, to assist in identifying ways to effectuate real and relevant change in our industry.

  • Why it matters: MBA strives to be a resource on all matters related to the commercial finance industry for our members, and promotes a culture of diversity and inclusion within the industry.
  • What’s next: The Task Force will work with the commercial membership in an effort to help develop strategies and solutions as well as identify resources that can help to make a change on this very important issue. MBA’s AVP of CREF/Multifamily, Sharon Walker, will lead the D&I Task Force.

For more information, please contact Sharon Walker at (202) 557-2747.

HUD Expands State and Local Flexibility for Block Grant Funds

Today, U.S. Department of Housing and Urban Development (HUD) Secretary Ben Carson announced new flexibilities states and local government can use in order to best utilize Community Development Block Grant (CDBG-CV) funds appropriated by the CARES Act, as well as other federal funds, to support their communities in the wake of the coronavirus outbreak. Key new flexibilities available to communities in administering their CDBG-CV funds include:

  • States may carry out activities directly or pass funds through to local governments in both rural and urban areas throughout the state. (Some funds must be set aside for rural areas.)
  • Economic development rules have been updated and streamlined so grantees can move quickly to help small businesses.
  • Emergency payments to a provider or landlord on behalf of a family or individual, usually limited to 90 days, may extend for up to six months.

The Notice also contains waivers and alternative requirements to expedite submissions across multiple grant programs so states and local governments can quickly realign existing resources to respond to COVID-19.

  • Why it matters: As the unemployment insurance under the CARES Act expires, and absent further legislative relief, renters need help to pay rent and remain in their homes.
  • What’s next: Congress has yet to come to an agreement on the next round of legislative COVID-19 relief, including possible rental assistance.

For more information, please contact Sharon Walker at (202) 557-2747.

New Details Released from Fannie Mae on Multifamily SOFR ARMs

On Tuesday, Fannie Mae released additional details about its Multifamily Secured Overnight Financing Rate (SOFR) ARM products. Beginning September 1, 2020, Fannie Mae will begin quoting and on October 1, 2020, it will accept delivery of Multifamily SOFR ARMs. Fannie Mae’s ARM 7-6, Hybrid ARM, Structured ARM (SARM), and a new ARM 5-5 will all be indexed to the 30-day Average SOFR published by the Federal Reserve Bank of New York. Additional details can be found here.

  • What’s next: Under Federal Housing Finance Agency (FHFA) guidance, Fannie Mae will no longer acquire Multifamily ARM loans indexed to LIBOR by the end of 2020.
  • Why it matters: The London Interbank Offered Rate, or LIBOR, serves as the primary interest rate benchmark across numerous financial products, including floating-rate mortgages. Due to structural weaknesses in the benchmark that made it susceptible to manipulation during the crisis, regulators have called for markets to transition to more resilient benchmarks in the near future. As a result, LIBOR is likely to be discontinued in late 2021, or perhaps even sooner.

For more information, please contact Andrew Foster at (202) 557-2740.

New York Courts Extend Residential Eviction Until October 1, 2020

On Wednesday, New York State Chief Administrative Judge Lawrence Marks issued a new directive mandating that no new residential eviction warrants can be executed until October 1, 2020. This directive continues a suspension on eviction proceedings brought by landlords since March 17,2020, under a combination of a series of executive orders issued by the New York Governor Andrew Cuomo and the Tenant Safe Harbor Act, which prohibits eviction of residential tenants experiencing financial hardship during the COVID-19 State of Emergency for unpaid rent accrued after March 7, 2020. Under Judge Marks’ order, eviction cases filed before March 17, 2020, cannot progress without the courts holding settlement meetings with judges.

  • Why it matters: Eviction moratoriums reduce the ability of property owners to collect rents due from tenants that live in those properties.
  • What’s next: The directive applies through October 1, 2020.

For more information, please contact Grant Carlson at (202) 557-2765.

California Judicial Council Extends Eviction Protections Until September 1, 2020, Pending Legislative Action

On Thursday, the Judicial Council of California voted to extend the statewide moratorium on evictions until September 1, 2020, to give the legislature “additional time to develop and enact policy and legislative proposals.” The Judicial Council originally approved the temporary emergency rules staying eviction and foreclosure proceedings at a special remote meeting on April 6, 2020. California Chief Justice Tani G. Cantil-Sakauye then suspended a vote on June 10, 2020, to provide Governor Gavin Newsome and the Legislature more time to develop policy proposals and solutions to deal with the potential impacts of evictions and foreclosures during the COVID-19 pandemic. Thursday’s vote extends the earlier stay of eviction and foreclosure proceedings.

  • Why it matters: Eviction moratoriums reduce the ability of property owners to collect rents due from tenants that live in those properties.
  • What’s next: California lawmakers are currently considering numerous measures dealing with evictions and foreclosures. MBA is working with the California MBA to oppose CA AB 1436 which would prohibit evictions until 90 days after the pandemic emergency has been lifted, or April 1, 2021, whichever is earlier, and would also impose single-family and multifamily forbearance requirements. 

For more information, please contact Grant Carlson at (202) 557-2765.

. HUD Awards $472 Million to Public Housing Authorities to Keep Residents Housed

On August 10, HUD Secretary Ben Carson announced $472 million in CARES Act funding to help low-income families stay in their homes during the COVID-19 pandemic. The funding will be awarded to Public Housing Authorities across the nation. Of note, the Housing Choice Voucher Program (HCV) includes the Mainstream Program, which provides tenant-based vouchers that serve low-income households.

The eligible COVID-19-related activities include, but are not limited to, the following:

  • Procuring cleaning supplies and/or services to maintain safe and sanitary HCV units, including common areas of PHA-owned Project Based Voucher (PBV) projects.
  • Relocation of participating families to health units or other designated units for testing, hospitalization, or quarantine, or transportation to these locations to limit the exposure that could be caused by using mass transportation.
  • Costs to retain or increase owner participation in the HCV Program, such as incentive or retention costs (e.g., the PHA offers owner an incentive payment to participate, in recognition of added difficulties of making units available for HCV families to rent while stay-at-home orders or social distancing practices are in effect).

Why it matters: In a recent statement, HUD Secretary Ben Carson said, “This funding will provide additional resources to public housing authorities to make sure people have a decent, safe, and affordable place to call home.”

What’s next: For more information on HUD’s response and the actions the Department has taken amid the COVID-19 pandemic, visit HUD’s coronavirus webpage.For more information, please contact Sharon Walker at (202) 557-2747.

. HUD Announces it will Safely Resume REAC Inspections

On August 7, HUD Secretary Ben Carson announced that the Department will resume Real Estate Assessment Center (REAC) inspections of HUD multifamily and public housing properties and units under strict safety protocols during the national recovery from the COVID-19 pandemic. REAC inspections are the assessment tool that ensures HUD-assisted properties meet federal standards of health, safety, and accessibility, and were temporarily paused due to the pandemic.

  • Why it matters: REAC inspections are a critical tool that HUD uses to ensure that this housing stock continues to provide decent, safe, and accessible homes as the Department continues to serve its residents.

For more information, please contact Sharon Walker at (202) 557-2747.

. [VIDEO]: mPower Moments: mPower Moments: On Managing a Team and a Toddler During a Pandemic, with MBA’s Teressa Lurk

In this latest episode of mPower Moments, mPower Founder Marcia M. Davies sits down with MBA’s Teressa Lurk, Vice President of Marketing and Design, to discuss managing a team and keeping them engaged while working from home with a toddler.

  • Why it matters: The ongoing COVID-19 pandemic continues to present challenges for the men and women professionals wearing many hats these days while they work remotely and keep their families safe. In the video, Lurk also gives advice on how we can all make progress toward true equality in the workplace.
  • What’s next: To watch more mPower Moments, click here.

For more information, please contact Marcia Davies at (202) 557-2707.

Upcoming and Recent MBA Education Webinars on COVID-19-Related Topics

MBA Education continues to deliver timely single-family and commercial/multifamily programming that covers the spectrum of challenges, obstacles, and solutions pertaining to the ongoing COVID-19 pandemic. Below, please see a list of upcoming and recent webinars – which are complimentary to MBA members:

MBA members can access the full list of COVID-19 webinar recordings by clicking here.For more information, please contactDavid Upbin at (202) 557-2890.