CREF Policy Update May 26 2022

Mike Flood mflood@mba.org; Bill Killmer bkillmer@mba.org.

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

Last Monday, the Biden administration released its Housing Supply Action Plan aimed at increasing affordable housing for prospective homeowners and renters. Then in Tuesday, MBA and 10 industry trade organizations submitted a joint comment letter to the Wage and Hour Division of the U.S. Department of Labor on the Proposed Rule Updating the Davis-Bacon and Related Acts Regulations.

On Thursday, FHA announced that it plans to make significant reductions to mortgage insurance premiums on most new Section 232 deals as long as the facilities meet industry-recognized green building certifications.

Thank you to the nearly 800 registrants who joined us in L.A. for the first in-person Commercial/Multifamily Servicing and Technology Conference since 2019. The conversations were lively and productive, and the energy throughout the hotel was as bright as the lights in Hollywood.

Sign MBA’s Home for All Pledge: Join the 260+ 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, Head of Lending, SVP) is encouraged to sign this online form on behalf of your organization.

White House Releases Action Plan on Housing Supply Issues 

On Monday, the Biden administration published an action plan with recommendations it believes will help close the housing supply gap over the next five years. These recommendations address: land use and zoning, new financing for housing production and preservation, improvements to existing financing, preservation of single-family homes for owner-occupants, and high material costs and low labor supply. MBA President and CEO Bob Broeksmit, CMB, released a statement in which he commended the Biden administration for its focus on housing supply issues.

• Why it matters: The persistent low supply of available housing throughout the country has led to rapid levels of home-price appreciation and intense competition among potential homebuyers – further adding to the challenges faced by first-time and low- to moderate-income homebuyers and renters.
• What’s next: MBA is reviewing the action plan and identifying ways in which further collaboration between industry and government stakeholders can encourage meaningful housing construction, preservation, and rehabilitation.

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

MBA Submits Industry Comment Letter to the Department of Labor’s Proposed Updates to Davis-Bacon Regulations

On Tuesday, MBA and 10 industry trade organizations submitted a joint comment letter to the Wage and Hour Division (WHD) of the U.S. Department of Labor (DOL) on the Proposed Rule Updating the Davis-Bacon and Related Acts Regulations (DBRA). Among other comments, the industry letter recommends that WHD, by rulemaking, create a policy and practice favoring a single residential wage decision for Federal Housing Administration-assisted (FHA) assisted projects, including incidental items, based on the overall residential character of the project.

• Why it matters: Davis-Bacon wage rates apply to FHA-insured new construction and substantial rehabilitation projects. Current WHD policies and practices result in unwarranted and disruptive split-wage decisions and other impediments to increasing the supply of workforce and affordable housing.
• What’s next: MBA will monitor the rulemaking process and communicate any relevant information to members.

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

Senior Senators Submit Comment Letter to DOL Opposing Efforts to Rewrite Davis-Bacon  

This week, Sen. Richard Burr (R-NC), Ranking Member of the Senate Health, Education, Labor and Pensions (HELP) Committee, led a group of 13 Republican senators in submitting comments to DOL opposing the Biden administration’s efforts to change wage regulations issued under DBRA. In the comment letter, the lawmakers underscored the consequences of DOL’s proposed changes, stating the modifications to DBRA would further inflate wages and regulatory burdens. A copy of the letter can be found here.

• Why it matters: The senators’ comment letter comes after the introduction last month of S. 3941, the “Housing Supply Expansion Act,” which would address the burdensome split-wage determinations.
• What’s next: MBA continues to stress in its regulatory and legislative advocacy that current Davis-Bacon policies and practices result in unwarranted and disruptive split-wage decisions and other impediments to increasing the supply of workforce and affordable housing.

For more information, please contact Ethan Saxon at (202) 557-2913 or Tallman Johnson at (202) 557-2866.

FHA Announces Reduced Mortgage Insurance Premiums for Residential Care Facilities that Meet Certain Green Building Certifications

On Thursday, FHA announced that it plans to make significant reductions to mortgage insurance premiums (MIP) on most new Section 232 deals as long as the facilities meet industry-recognized green building certifications. The reduction is meant to help meet the Biden administration’s environmental objectives and applies to commitments issued or reissued beginning October 1, 2022. The Notice in the Federal Register can be found here; comments are due on or before June 21, 2022.

• Why it matters: Mortgages on Section 232 properties that qualify can expect a 75-basis-point reduction to the upfront MIP and further reductions to the ongoing MIP rate, which will result in significant savings for the borrower and could potentially encourage owners of these facilities to adopt more energy-efficient standards for construction, rehabilitation, and repairs.
• What’s next: MBA will work with members to develop comments, if necessary, and submit them prior to the deadline.   

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

House Financial Services Committee Holds Legislative Markup 

On Tuesday and Wednesday, the House Financial Services Committee (HFSC) considered and “marked up” nine bills addressing a broad range of issues. Of note, included in the markup was H.R. 7022, the Strengthening Cybersecurity for the Financial Sector Act, introduced by Rep. Bill Foster (D-IL). The bill would reauthorize and make permanent the National Credit Union Administration’s (NCUA) authority over the third-party service providers of credit unions and would also provide the Federal Housing Finance Agency (FHFA) with similar authority over the third-party service providers of Fannie Mae, Freddie Mac, and the Federal Home Loan Banks (FHLBs).

• Why it matters: MBA is concerned that the legislation (as written) could be interpreted to provide a much more broad-based expansion of FHFA authority over all elements of service provider operations – including direct authority to regulate mortgage servicers. MBA sent a letter to HFSC leadership and committee members ahead of the markup outlining our concerns with the legislation, and pushed for targeted amendments to limit FHFA’s expanded authority to examinations of vendors and for excluding the GSEs’ customers (i.e., seller/servicers) from the scope of the bill.
• What’s next: H.R. 7022 was reported favorably to the House on a party line vote of 24-22. Timing on floor consideration of the measure is uncertain. A more detailed summary of the markup is here.

For more information, please contact Borden Hoskins at (202) 557-2712 or Alden Knowlton at (202) 557-2741.

Senate Banking Committee Holds Hearings on Climate and Nominees

On Thursday, the Senate Banking, Housing and Urban Affairs Committee held a hearing on the nominations of Michael Barr to be the Federal Reserve’s Vice Chair for Supervision and Jaime Lizárraga and Mark Toshiro to serve as members of the Securities and Exchange Commission (SEC). The committee also held a hearing Tuesday titled, “Addressing Climate Change with Energy-Efficient and Resilient Housing.”

• Why it matters: Barr, if confirmed, will be the Fed’s top banking regulator and could play a significant role regarding policies impacting the C/MF sector, including proposed revisions to the Community Reinvestment Act. Lizárraga and Toshiro, if confirmed, would solidify a Democratic majority at the SEC as it considers climate change and ESG-related rulemakings.
• The Tuesday climate change hearing highlighted shortcomings in the National Flood Insurance Program (NFIP), and the need for effective federal weatherization programs and legislative proposals to invest in both single-family and multifamily housing. A summary of both hearings can be found here.
• What’s next: The Senate Banking Committee is expected to hold votes on the Barr, Lizárraga, and Toshiro nominations shortly (potentially in the next several weeks). Barr is the Biden administration’s final nominee to fill the Fed’s seven-person Board of Governors.

For more information, please contact Ethan Saxon at (202) 557-2913 or Tallman Johnson at (202) 557-2866.

MBA’s CREF Market Intelligence Symposium 

MBA’s popular CREF Market Intelligence Symposium is back – in person – at the NYU Stern Center for Real Estate Finance Research on June 15-16. Cut through the clutter to get the hard facts about the state of commercial real estate markets from the nation’s leading CRE analysts, including representatives from U.S. Bank, JLL, CBRE, Institutional Property Advisors, CoStar, Moody’s, JP Morgan, and more.

• Why it matters: The symposium goes beyond talking heads, featuring data, analysis, and insights from leaders in CRE research – as well as a networking reception on Wednesday evening. Presented in partnership with the NYU Stern Center for Real Estate Finance Research, this is an event you won’t want to miss. Learn more and register today.

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

State Trackers

• State eviction moratorium and legislative activity tracker available here and here.

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

[WATCH]: On Becoming a CREF Leader with PGIM Real Estate’s Stephanie Wiggins

In this episode of mPower Moments, mPower Founder Marcia M. Davies sits down with Stephanie Wiggins, Managing Director and Head of Production for Agency Lending with PGIM Real Estate. During this insightful interview, Wiggins explains why her family’s background in commercial real estate led to it being a passion of hers from a very early age. She also shares insights on the power of confidence, the need to be an active listener, and what is needed to get more women of color in the C-suite.

• What’s next: To watch more mPower Moments, click here.

For more information, please 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:

• New Fannie Mae and Freddie Mac Condominium and Cooperative Guideline Changes – May 24
• What Trends will Shape the Lending Space in the Second Half of 2022 – June 2
• CFPB, UDAAP and the Focus on Junk Fees – June 9
• Serving Loan Applicants with Limited English Proficiency – June 14
• Leveling Up Your Social Media Strategy with Paid Advertising – June 28

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.