Home > CMF Newslinks > MBA Commercial/Multifamily NewsLink Feb. 24 2022

CREF Policy Update Feb. 24, 2022

February 18, 2022

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

Last week, FHA announced at MBA’s Commercial/Multifamily Finance Convention & Expo that it is removing temporary COVID-19 underwriting mitigants for multifamily transactions insured under Section 223(f) of the National Housing Act, effective immediately for all insured transactions that have yet to reach endorsement. 

Also, last Monday, MBA submitted its response to the OCC’s request for feedback on proposed principles for climate-related financial risk management for large banks. And Congress passed yet another Continuing Resolution to keep the federal government funded through March 11, though earlier in the week partisan differences most likely delayed votes in the Senate Banking Committee until sometime in March on several key nominations at the Federal Reserve and FHFA. 

Sign MBA’s Home for All Pledge: Join the 180+ MBA member companies that have signed MBA’s Home for All Pledge, representing a commitment to promoting affordable rental housing; minority homeownership; and company diversity, equity, and inclusion. One senior executive (e.g., CEO, COO, President) is encouraged to sign this online form on behalf of your organization.  

View Any Session You Missed from MBA CREF22: Were you one of the over 2,400 registrants that attended MBA’s Commercial/Multifamily Finance Convention & Expo? If you weren’t able to attend every session, they are available to you online for the next month. Simply access the program videos by clicking here. 

1. FHA Announces Removal of Temporary COVID-19 Underwriting Mitigants for Multifamily Transactions 

The Federal Housing Administration (FHA) announced last Monday at MBA’s Commercial/Multifamily Finance Convention & Expo that it is removing temporary COVID-19 underwriting mitigants for multifamily transactions insured under Section 223(f) of the National Housing Act, effective immediately for all insured transactions that have yet to reach endorsement. MBA President and CEO Bob Broeksmit, CMB, released a press statement in support of the announcement at the conference from Lopa Kolluri, Principal Deputy Assistant Secretary for the Office of Housing and FHA.

  • What it says: The temporary requirements for nine months of debt service reserves, 250% repair escrows, and limits on cash-out refinance transactions were originally put in place in April 2020 to counterbalance potential financial effects resulting from the COVID-19 pandemic. MBA advocated for the return to standard requirements for reserves, escrows, and cash-out refinance transactions, arguing that it would make even more capital available for affordable rental housing in communities across the country.
  • What’s next: MBA looks forward to its continued work with FHA leadership to find solutions that increase housing supply and improve affordability and stability in the rental market.

For more information, please contact Stephanie Milner at (202) 557-2747

2. MBA Responds to OCC Principles on Climate Change Financial Risk Management

Last Monday, MBA submitted its response to the Office of the Comptroller of the Currency’s request for feedback on proposed principles for climate-related financial risk management for large banks. In the letter, MBA said it supports the OCC’s approach of not treating emerging climate-related financial risk as a separate, new category of risk and the approach of looking to banks to leverage their existing risk-management frameworks to address climate-change financial risks rather than requiring them to develop entirely new risk-management frameworks. MBA’s response observed that, “while climate-related financial risk is not fully understood, it is important to recognize that banks do not face that risk unarmed.”

  • Why it matters: The draft guidance applies to OCC-supervised banks with more than $100 billion in total consolidated assets, but the draft OCC guidance sets the stage for comparable guidance across all financial institution regulators.  
  • What’s next: The OCC will review all feedback on its principles before issuing final guidance on large-bank management of climate-related financial risk, and MBA will continue to engage with policymakers on climate-related issues that may affect commercial real estate lending.

For more information, please contact Adrian Ballinger at (202) 557-2774 or see MBA’s FAQs on Climate Change and ESG.

3. Federal Insurance Office Joins International Network for Greening the Financial System 

On Thursday, the Federal insurance Office (FIO) of the U.S. Treasury announced that it had joined the Network of Central Banks and Supervisors for Greening the Financial System (NGFS). The Federal Reserve and OCC were already members. The NGFS promotes best practices for strengthening the global response to the Paris Agreement goals and for mobilizing capital for environmentally sustainable development. FIO also announced that the Federal Advisory Committee on Insurance (FACI) launched a Climate Related Financial Risk Subcommittee to provide expert advice and recommendations relevant to FIO’s work on climate-related risks in the insurance sector. FIO has previously issued a Request for Information (RFI) on the insurance sector and climate-related financial risk. MBA submitted a response to that RFI on October 15, 2021.

  • Why it matters: While FIO has no direct supervisory role over insurance companies, its policy views on climate risk could influence the National Association of Insurance Commissioners (NAIC) and state insurance regulators’ approaches to climate change and financial risk.
  • What’s next: FIO intends to publish a climate report by the year’s end focusing on insurance supervision and regulation, with an assessment of climate-related issues or gaps in the supervision and regulation of insurers, including their potential impacts on U.S. financial stability. The report is expected to also include an analysis of climate-related disclosures for the insurance sector, and it may include initial analyses of selected at-risk insurance markets.

For more information, please contact Adrian Ballinger at (202) 557-2774 or see MBA’s FAQs on Climate Change and ESG.

4. MBA 2022 Forecast: Commercial/Multifamily Lending to Hit Record $1 Trillion in 2022    

Total commercial and multifamily mortgage borrowing and lending is expected to break $1 trillion for the first time in 2022, a 13% increase from 2021’s estimated volume of $900 billion, according to MBA’s new forecast released this week at the 2022 Commercial/Multifamily Finance Convention & Expo. Multifamily lending alone (which is also included in the total figures above) is forecast to rise to $493 billion in 2022 – a new record and a 5% increase that surpasses last year’s record total of $470 billion.

For more information, please contact Jamie Woodwell at (202) 557-2936.

5. MBA Presents JLL with 2022 Commercial/Multifamily DEI Leadership Award

On Monday, MBA, during its 2022 Commercial/Multifamily Finance Convention & Expo, presented JLL with the 2022 Commercial/Multifamily Diversity, Equity, and Inclusion (DEI) Leadership Award.

  • Why it matters: JLL was selected for having a multifaceted diversity and inclusion (D&I) program that features several employee-led platforms across the organization that support equity and inclusion for individuals of all backgrounds. For more information on JLL’s D&I efforts, click here.
  • What’s next: For more information on MBA’s DEI Leadership Awards, click here.

For more information, please contact Amber Lawrence at (202) 557-2766.

12. State Trackers

  • State eviction moratorium and legislative activity tracker available here.

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

6. 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:

  • mPower presents Being You Is Your Superpower! – February 28
  • A Lender’s Playbook for Maximizing the ROI of your CRM – March 1
  • Driving Engagement and Purchase Volumes in Today’s Market – March 3
  • COVID’s Continued Impact on CECL and Lending – March 8
  • Combating Multifamily Real Estate Financial Crimes and Fraud – March 10
  • CRE Investor Themes & Perspectives – March 16

MBA members can register for any of the above events and view recent webinar recordings.

For more information, please contact David Upbin at (202) 557-2931.

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