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CREF Highlights Oct. 15, 2020

October 12, 2020 |By Mike Flood

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

1. NAIC Adopts MBA/ACLI Proposed RBC Reporting of 2020 NOI
Today, the National Association of Insurance Commissioners (NAIC) Life Risk-Based Capital Working Group unanimously adopted risk-based capital (RBC) guidance and reporting instructions to implement the MBA/American Council of Life Insurers (ACLI) proposed RBC treatment of 2020 Net Operating Income (NOI). The guidance also implements the Working Group’s earlier actions to (1) extend the June 12, 2020 RBC Guidance through December 31, 2020 reporting; (2) treat construction loans temporarily paused by governmental directive favorably; and (3) to apply a 2019-2020 average NCREIF price index for year-end 2020 RBC reporting. On Tuesday, MBA and ACLI submitted a letter of support of the guidance and reporting instructions.

  • Why it matters: The NOI and other proposals are designed to adapt RBC reporting to the unique circumstances of the COVID-19 pandemic.
  • What’s next: MBA and ACLI will work with NAIC staff on making a conforming change to RBC reporting worksheets. MBA will also work with ACLI to advocate for an industry proposal to change the RBC factors for equity investments in real estate.

For more information or to join MBA’s Life Company RBC Working Group, please contact Bruce Oliver at (202) 557-2840.

2. MBA Leads Joint Trade Letter to State and Local Government Associations on Rental Assistance
Today, MBA sent a joint letter with 14 other real estate trade associations urging state and local governments to use, or dedicate, any available CARES Act funds for rental assistance.

  • Why it matters: The letter outlines concerns that the Centers for Disease Control and Prevention’s (CDC) national eviction moratorium, absent rental assistance for tenants, can make it harder for rental property owners to meet their mortgage and other financial obligations.
  • What’s next: MBA will continue to work at all levels of government, and with industry groups, to support further stimulus and financial support for tenants.

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

3. MBA Joins Real Estate Coalition Urging Congress and the Administration to Take Action to Provide Rental Assistance
On Thursday, MBA joined 12 other real estate trades in two letters urging Congress and the administration to return to the negotiating table and fund rental assistance. The letters also contain a link to a coalition advertisement urging action on rental assistance.

  • Why it matters: America’s renters and housing providers need immediate support to stabilize the sector and avert a future housing crisis.
  • What’s next: MBA will continue to advocate for rental assistance.

For more information, please contact Bruce Oliver at 2020-557-2840.

4. MBA Reiterates Views on GSE Reforms, FHFA Oversight
On Monday, MBA submitted comments to the Federal Housing Finance Agency (FHFA) in response to its Strategic Plan for Fiscal Years 2021-2024. The Strategic Plan includes several important reforms to the market conduct of the GSEs, including “a fair playing field for large and small lenders,” and efforts to ensure the activities of the GSEs “stay within the boundaries of their charters.”

  • Why it matters: Many of the objectives identified in the Strategic Plan, along with recent reforms to the GSEs, are critical prerequisites in preparing the GSEs to safely and sustainably exit conservatorship.
  • What’s next: MBA will continue to advocate for more permanent reforms to ensure the GSEs operate with financial strength and appropriate market conduct post-conservatorship.

For more information, please contact Sasha Hewlett at (202) 557-2805.

5. Federal Reserve May Back Off Agency CMBS Purchases
On Wednesday, the Federal Open Market Committee (FOMC) released minutes from its September 15-16, 2020, meeting that reflect the Fed’s monetary policy approach, as well as plans for Fed operations to support agency CMBS. 

  • What it said: “Markets for Treasury securities and agency mortgage-backed securities (MBS) continued to function smoothly, with bid-ask spreads and a range of other indicators remaining near pre-pandemic levels. Indicators of functioning in the market for agency commercial mortgage-backed securities (CMBS) also remained stable. In light of the improved conditions, the staff proposed that the Desk no longer be required to increase agency CMBS holdings or reinvest principal payments for agency CMBS. For the time being, the Desk would continue to conduct regular agency CMBS operations to maintain backstop capacity.”
  • “…continued:” “Members considered the staff proposal to eliminate the requirement in the directive to increase the holdings of agency CMBS held in portfolio. In light of the substantial improvement in market functioning in the agency CMBS market, the Committee judged that it would be appropriate for the Desk to purchase agency CMBS only as needed to sustain smooth market functioning, rather than seek to steadily increase agency CMBS holdings, and to cease reinvestments of agency CMBS principal payments.”
  • What’s next: MBA will continue to monitor the Agency CMBS marketplace to ensure it continues to function smoothly.

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

6. D.C. Mayor Extends Health Emergency, Extending Eviction and Foreclosure Moratoriums Until End of 2020
On Wednesday, Washington, D.C. Mayor Muriel Bowser issued Mayor’s Order 2020-103 to extend the District’s public emergency and public health emergency until December 31, 2020.

  • Why it matters: Emergency legislation enacted in the D.C. Council places a moratorium on commercial and multifamily evictions and foreclosures until 60 days after the expiration of the Mayor’s declared Health Emergency.
  • What’s next: MBA will monitor the D.C. Council for potential actions.

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

7. Eviction Moratorium, State Legislative Roundup and Rental Assistance Tracker
MBA has compiled a new member resource outlining current state and local rental assistance programs or resources. We will continue to provide weekly updates of these member resources.

  • MBA’s CREF State Eviction Moratorium Tracker can be found here.
  • MBA’s CREF State Legislation Roundup can be found here.
  • MBA’s State Rental Assistance Tracker can be found here.

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

8. Upcoming and Recent MBA Education Webinars on Critical Industry Issues
MBA Education continues to deliver timely programming that covers the spectrum of challenges, obstacles and solutions pertaining to our industry. Below, please see a list of upcoming and recent webinars – which are complimentary to MBA members:

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

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