MBA CREF Policy Update Aug. 25 2022
Bill Killmer bkillmer@mba.org; Mike Flood mflood@mba.org
Last Tuesday, FHFA issued a Notice of Proposed Rulemaking for the 2023-2024 multifamily enterprise housing goals. Also last week, HUD published Mortgagee Letter 2022-12, which introduces a new policy for delegating to lenders the process for approving borrowers’ requests for disbursement of funds from Reserve for Replacement accounts.
MBA last week released its Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations, which showed that commercial and multifamily mortgage loan originations increased 19% in the second quarter of 2022 compared to the same period last year.
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FHFA Publishes 2023-2024 Multifamily Housing Goals Proposal
Last Tuesday, the Federal Housing Finance Agency issued a Notice of Proposed Rulemaking for the 2023-2024 multifamily enterprise housing goals. The rule proposes a new methodology for measuring the enterprise multifamily housing goals and is applicable to years 2023 and 2024. Comments are due 60 days from publication in the Federal Register. A summary of the rule can be found here.
- Why it matters: Rather than establishing the multifamily housing goals based on a fixed number of units, the proposed rule would use the percentage of each enterprise’s annual multifamily loan acquisitions (in units) that are affordable to each income category. The proposed benchmark levels for 2023-2024 are 61% of annual loan acquisitions (in units) for the low-income goal (80 area median income [AMI]), 12% for the very low-income subgoal (50 AMI) and 2% for the small multifamily low-income subgoal (80 AMI). Relying, in part, on the data and forecasts of MBA, FHFA took into consideration various economic factors when determining the proposed housing goals. FHFA is not proposing a change to the criteria that determine which units qualify for housing goal credit.
- What’s next: MBA will fully analyze the proposal and work with members to provide comment.
For more information, contact Stephanie Milner at (202) 557-2747.
HUD Publishes New Policy Delegating to Lenders the Process of Approving Borrowers’ Requests for Disbursements
Last week, HUD published Mortgagee Letter 2022-12, which introduces a new policy for delegating to lenders the process for approving borrowers’ requests for disbursement of funds from Reserve for Replacement (RFR) accounts. Lenders can either choose partial or full delegation in review of a borrower’s request. Full delegation enables lenders to take full responsibility for review and approval of borrowers’ requests for disbursements. Partial delegation would enable lenders to review and recommend requests for approval by HUD.
- Why it matters: Currently, HUD limits this delegation to only certain properties and this mortgagee letter would extend the delegation to all market rate-insured properties under Sections 220, 221(d)(3), 221(d)(4), 223(a)(7), 223(f), and 231. The goal is to increase efficiencies in processing borrowers’ requests for RFR disbursement. Lenders must submit a written request to HUD to participate in the delegation.
- What’s next: MBA will continue to encourage HUD to explore new ways to increase efficiencies in the MAP program.
For more information, contact Stephanie Milner at (202) 557-2747.
Florida Board of Commissioners Approves Rent-Control Ballot Initiative
The Orange County Board of Commissioners recently approved a November ballot initiative that would let voters decide whether to limit how much landlords can raise rents. Orange County is in Central Florida and includes the City of Orlando.
- Why it matters: On Monday, two Florida real estate trade groups filed a lawsuit seeking to block the measure, which they contend violates Florida state law that pre-empts local jurisdictions from enacting rent-control laws. However, Orange County officials have cited a provision in Florida law that allows local jurisdictions to enact rent-control laws when local housing conditions are “a serious menace to the general public,” according to state law.
- What’s next: MBA will follow developments.
For more information, contact William Kooper at (202) 557-2737 or Grant Carlson at (202) 557-2765.
Commercial/Multifamily Borrowing Up 19% Year-Over-Year in the Second Quarter of 2022
Commercial and multifamily mortgage loan originations increased 19% in the second quarter of 2022 compared to the same period last year, according to MBA’s Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations released yesterday.
- MBA Vice President of Commercial Real Estate Research Jamie Woodwell said, “Borrowing and lending backed by commercial real estate set another quarterly record from April through June, although the pace of increase slowed from the first quarter. Property owners, investors, and lenders continue to work through broader economic uncertainty that is affecting the space, equity, and debt markets. MBA is forecasting that borrowing and lending will slow during the second half of the year. That said, improvements in fundamentals and values in recent years provide significant support to properties with outstanding loans and continued financing opportunities for properties whose cash flows can support debt.”
- To view the report, click here.
For more information, please contact Jamie Woodwell at (202) 557-2936.
State Trackers
For more information, contact William Kooper at (202) 557-2737 or Grant Carlson at (202) 557-2765.
6. mPower Moments: On Breaking Glass Ceilings with Morgan Stanley’s Carla Harris
In this episode of mPower Moments, mPower Founder Marcia M. Davies sits down with Carla Harris, Managing Director and Senior Client Advisor at Morgan Stanley. During this inspirational conversation, Harris discusses her career path and how she was able to climb the corporate ladder on Wall Street. She highlights several pivotal moments that helped redefine her authenticity and leverage her voice when facing adversity.
- Why it matters: Harris also notes the importance of “trusting your gut” when taking career risks and measuring the impact the risk can have when going to the next level. Furthermore, she also provides actionable steps the real estate finance industry can take to provide minority women with more leadership opportunities.
- What’s next: To watch more mPower Moments, please click here.
For more information, contact Marcia Davies at (202) 557-2707.
Upcoming 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 webinars – which are complimentary to MBA members:
- CONVERGENCE: What Does it Cost to Produce a Unit of Housing?: Costs & Elements of Production – August 25
- The Power of Reverse Mortgages for a Changing Market – September 1
- Climate Risk Management: Data & Analytics – September 7
MBA members can register for any of the above events and view recent webinar recordings.
For more information, contact David Upbin at (202) 557-2931.
