MBA CREF Policy Update April 13, 2023

We’re down to the wire, but registration remains open for MBA’s National Advocacy Conference (NAC) to be held in less than two weeks on April 18 and 19 in Washington, D.C. Attending this critical event – with a tailored CREF track – will allow you to connect directly with elected officials in our nation’s capital. Register today. 

MBA’s Technology Solutions Conference wrapped up last week in San Jose, including a track of sessions dedicated to commercial real estate finance technology (CREFtech). Speakers and attendees covered a wide range of topics, but the standout issues were information security in the network of CREF firms and the opportunities (and challenges) that lie ahead in the application of advances in AI. MBA’s CREF Technology Officers Peer Business Roundtable will be picking these topics up in the coming weeks. To learn more and get involved, contact Jamie Woodwell.  

Join the 380+ MBA member companies that have signed MBA’s Home for All Pledge, representing a commitment to promoting minority homeownership; affordable rental housing; and company diversity, equity, and inclusion.   

FHFA Announces Updated Equitable Housing Finance Plans for GSEs

Last Wednesday, the Federal Housing Finance Agency announced the release of Fannie Mae’s and Freddie Mac’s updated Equitable Housing Finance Plans for 2023. The revised plans build on the first iterations released last year and include updates based on initial findings and research. Updates include an enhanced focus on loss mitigation support, the inclusion of financial coaching to build credit and savings, support for locally owned modular construction facilities in communities of color, continued focus on multifamily rehab and construction, and increases to the reach of the GSEs’ Special Purpose Credit Programs (SPCPs). The GSEs also published performance reports outlining the progress made on the 2022 plans.

• The implementation of these plans is an important step in addressing our nation’s long-standing challenges related to housing equity. Many of the activities included in the plans align with MBA recommendations developed through MBA’s Building Generational Wealth through Homeownership initiative. MBA has led industry efforts to facilitate greater use of SPCPs, including releasing an SPCP toolkit last year.

• MBA will analyze the updated plans and progress reports in the coming weeks and will continue to engage withFHFA and the GSEs on efforts to close the racial homeownership gap and boost the supply of affordable rental housing.

For more information, contact Sasha Hewlett at (202) 557-2805 or Stephanie Milner at (202) 557-2747.  

MBA Opposes HUD Proposal to Consolidate HAP Contracts
Last Monday, MBA submitted comments to the Department of Housing and Urban Development (HUD) on its proposed rule to transition to a single Section 8 regulation and a single Housing Assistance Payment contract for its Section 8 project-based rental assistance programs.

• HUD’s proposal calls for a consolidation of all HAP contracts under one single program. Such a change would have significant negative impacts on longstanding contractual relationships and the preservation of affordable housing units.
• MBA urged HUD to withdraw the proposal and joined coalition partners with the same request.

For more information, contact Megan Booth at (202) 557-2740.

FHA Publishes Annual Adjustment to Statutory Loan Limits for FHA Multifamily
HUD published the annual adjustment to the basic statutory multifamily limits for 2023 on Friday.These are effective January 1, 2023, for applications submitted or amended, so long as the loan has not been initially endorsed. This notice does not include the high-cost factors.

• With construction costs increasing, adjustments to the loan limits are critical to continuing the development of rental housing throughout the nation.
• MBA continues to urge HUD to adjust the high-cost loan limit threshold and is working with Congress to increase the base for the statutory limits.

For more information, contact Megan Booth at (202) 557-2740.

MBA Urges CFPB to Reconsider Consent Order Registry for Nonbank Mortgage Companies

MBA recently submitted comments on the Consumer Financial Protection Bureau’s proposed rule requiring nonbank financial firms that are under a final court order or regulatory order to enter those into an online registry. MBA strongly opposes the creation of the registry because almost all the information sought by the CFPB is already available in a consumer database maintained by the Nationwide Multistate Licensing System. The letter notes that the Bureau is required to use reports that have already been provided to federal and state agencies, use information that has been reported publicly, and tailor rules with consideration of the extent of current state supervision. MBA urged the CFPB to exempt nonbank mortgage companies rather than creating redundant reporting requirements. 

• Why it matters: If finalized, applicable MBA members would incur the costs  required to register and submit the requested information to the Bureau and have appropriate compliance infrastructure in place, including designating a senior-level executive to attest to compliance with each order.  MBA’s letter urged the Bureau to be more “focused on helping mortgage lenders lower origination costs by removing – and not proposing – duplicative regulatory requirements that will provide little benefit to consumers.”

• What’s next: MBA will continue to monitor this rulemaking and keep members aware of any changes.

For more information, contact Justin Wiseman at (202) 557-2854 or Gabriel Acosta at (202) 557-2811.

CFPB Issues Final Rule on Small Business Loan Reporting

The Consumer Financial Protection Bureau released its small business loan reporting final rule that implements Section 1071 of the Dodd-Frank Act. The final rule will require some MBA members to collect and report data on certain commercial real estate loans. The rule exempts any loans that are already reportable under the Home Mortgage Disclosure Act (HMDA), and also any lenders who originate less than 100 qualifying small business loans in each of the preceding two calendar years. A summary of the final rule is now available here.

• Why it matters: Lenders that originate at least 2,500 small business loans annually must collect data starting October 1, 2024. Lenders that originate at least 500 loans annually must collect data starting April 1, 2025. Lenders that originate at least 100 loans annually must collect data starting January 1, 2026.

• What next: MBA expects the CFPB to provide additional documents about complying with the new rule in the coming months, prior the start of data collection in October of 2024. MBA will share these documents with members.

For more information, contact Megan Booth at (202) 557-2740.

MBA Issues MAA Call to Action to Oppose Harmful Rent Control “Good Cause Eviction” Legislation in New York

MBA’s Mortgage Action Alliance (MAA) issued a Call to Action that urges New York MAA members to halt S. 305 and A. 4454 or “Good Cause Eviction” legislation. The bill would limit New York landlords’ ability to properly manage their properties and would enact sweeping rent control measures limiting annual rent increases to 3 percent or 1.5 % of the consumer price index. The enactment of “Good Cause Eviction” legislation – on top of New York’s already onerous rent control laws – would further harm the state’s housing market. 

• Why it matters: Research based on real-life examples, along with an overwhelming majority of economists, has concluded that rent control decreases housing affordability and creates negative spillover to the surrounding neighborhood. To truly tackle housing affordability in New York, lawmakers should instead support efforts to increase the supply of affordable housing through public-private partnerships and reform of burdensome local zoning laws and complex application processes. They should also support direct assistance to renters. This has shown itself to be an effective and efficient alternative to rent control because it ties assistance to a renter rather than a rental unit.
• What’s next:. S. 305 and A. 4454, the “Good Cause Eviction”measures, are currently included in both the New York Assembly and Senate proposed budget plans. New York lawmakers are working to finalize a 2023 state budget, which was due on April 1st. The inclusion of “Good Cause Eviction” legislation will remove incentives to develop new affordable housing units leading to higher housing costs in New York’s rental housing market. This will be harmful to renters and the entire real estate finance industry in general – and especially multifamily mortgage lenders. Moreover, if this legislation succeeds, it is certain to be emulated by other states. New York MAA members need to contact their state Assembly members and Senators today and urge them to oppose this bill before it is considered by the Assembly and Senate.

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

Florida Affordable Housing and Statewide Rent Control Preemption Legislation Signed into Law

Last week, Florida Governor Ron DeSantis signed S.B. 102 into law. Known as the Live Local Act, the law enacts zoning changes, expedites preempting, and enacts tax incentives for affordable housing.

·       Why it matters: S.B. 102 includes $711 million in funding to address affordable housing and updates the state’s law preempting local rent control laws, which were previously possible during a defined “rental emergency.”

• What’s next: S.B. 102 will become law on July 1, 2023.

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

Rent Control Map and State Trackers

• Given the ongoing proposals and ballot initiatives across the country, MBA has published an online map that provides an overview of state and local rent control laws. MBA will follow ongoing developments on this issue and will update the map accordingly.  
• State eviction moratorium and legislative activity tracker available here and here.

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

Upcoming and Recent MBA Education Webinars on Critical Industry Issues

MBA Education continues to deliver timely single-family and commercial/multifamily 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:

• Multifamily Finance Faces Headwinds Head-On – April 18
• Turn Distressed Mortgage Loans into Performing Portfolios Faster – April 20
• ROI Guide to Risk & QC Technology – April 25
• MSR Transfers: Balancing Risk, Customer Experience and Efficiency – May 11
• What Trends will Shape the Lending Space in the Second Half of 2023 – June 1

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

For any questions, please contact David Upbin at Dupbin@mba.org or 202-557-2931.