CREF Policy Update: Aug. 10, 2023
- MBA Submits Comments to FHFA’s Request for Input on Multifamily Tenant Protections
Last Monday, MBA submitted comments to the Federal Housing Finance Agency’s (FHFA) Request for Input (RFI) on multifamily tenant protections. The RFI is intended to help FHFA collect information on the tenant experience and solicit ideas for improved data collection to “better quantify the size and scope of the issues identified by tenants.”
The letter highlighted MBA’s significant concerns about including additional enhancements for tenants, and urged FHFA to refrain from enacting new or expanded obligations, like rent control, that would disincentivize participation in the Enterprises’ multifamily programs. The letter also pointed out that lenders and servicers do not have a direct connection with tenants or the ability to monitor and report on the landlord/tenant relationship, and that involving the mortgage lender and/or servicer and attaching any additional enhancements for tenants to an Enterprise-guaranteed mortgage is not a workable or lasting solution as the loan will pay off, often in 5 years or less, and those covenants and agreements will terminate with the mortgage.
• Why it matters: FHFA’s RFI is part of the Biden Administration’s January 2023 announcement of a set of actions it will take in order to enhance tenant protections and further principles of fair housing. The announcement included new actions by several federal agencies, a ” Blueprint for a Renters Bill of Rights,” and a voluntary challenge to the industry to adopt stronger policies and practices that better serve tenants. MBA and other industry stakeholders have met with the Biden Administration numerous times this year on the topic of tenant protections and have stressed the importance of increasing affordable housing supply and avoiding unnecessary regulations such as rent control.
• What’s next: MBA will update members on any further developments related to this issue.
For more information, please contact Stephanie Milner at (202) 557-2747.
- Federal Judge in Texas Grants Order Blocking Enforcement of CFPB’s Final Rule on 1071 Small Business Reporting
Last week the U.S. District Court for the Southern District of Texas issued an order blocking enforcement of the Consumer Financial Protection Bureau’s (CFPB) small business loan reporting final rule that implements Section 1071 of the Dodd-Frank Act. The injunction only applies with respect to members of the American Bankers Association and/or Texas Bankers Association and is only valid until the Supreme Court’s final decision in the case Community Financial Services Association v. Consumer Financial Protection Bureau.
• Why it matters: The small business reporting final rule will require some MBA members to collect and report data on commercial real estate loans. MBA’s comments in response to CFPB’s proposed rule argued that the rule should only apply to small business lending and exempt most commercial and multifamily real estate loans. 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’s next: MBA will update members on any further developments related to this issue.
For more information, please contact Stephanie Milner at (202) 557-2757.
- MBA Releases Progress Report on its Affordable Rental Housing Strategy
MBA recently released a progress report of its advocacy work, accomplishments, and next steps to implement policies, programs, best practices, and public-private partnerships to specifically target and enhance affordable rental housing options through the Affordable Rental Housing Strategy: Expanding Affordable Rental Housing Opportunities.
• Why it matters: The Strategy signifies MBA’s commitment to addressing the barriers to sustainable housing for persons and communities of color and expanding the opportunities for wealth creation and stability that come from homeownership and affordable rental housing. The progress report highlights the significant strides made this year in developing and advocating for policies, programs, and practices to support affordable rental housing, building upon the affordable housing efforts set forth by MBA’s Building Generational Wealth through Homeownership Campaign and MBA’s Home for All Pledge.
• What’s next: MBA will continue to prioritize advocacy, partnerships, and connections within the industry to increase the availability of affordable multifamily housing, expand educational opportunities for renters to achieve stable homeownership, provide clarity within the industry regarding the different definitions of affordable housing, and offer support to minority professionals in the field.
For more information, please contact Katelynn Harris Walker at (202) 557-2734.
- Multifamily Lending Declined 1 Percent to $480 Billion in 2022
In 2022, 2,242 different multifamily lenders provided a total of $480.1 billion in new mortgages for apartment buildings with five or more units, according to the Mortgage Bankers Association’s (MBA) annual report of the multifamily lending market, released Tuesday.
• Jamie Woodwell, MBA’s Head of Commercial Real Estate Research said, “Multifamily borrowing remained strong in 2022, largely as a result of lending by banks. Beginning in last year’s third quarter, rising and volatile interest rates, uncertainty about property values, and questions about some property fundamentals led to a falloff in borrowing and lending across commercial property types, including multifamily. Most capital sources saw a significant decline in lending activity in 2022, but bank activity increased by an almost equal amount. It’s unlikely that this momentum is occurring this year, given current evidence that banks have tightened underwriting standards and borrower demand has weakened.”
• To purchase the report, please click here.
For more information, please contact Jamie Woodwell at (202) 557-2936.
- MBA Forecast: Higher Rates, Uncertainty to Slow Commercial/Multifamily Lending in 2023
Total commercial and multifamily mortgage borrowing and lending is expected to fall to $504 billion this year, which is a 38 percent decline from 2022’s total of $816 billion. This is according to an updated baseline forecast released by MBA.
• Why it matters: Multifamily lending alone (which is included in the total figures) is expected to drop to $299 billion in 2023 – a 38 percent decline from last year’s total of $480 billion. MBA anticipates borrowing and lending will rebound in 2024 to $856 billion in total commercial real estate lending, with $452 billion of that total in multifamily lending.
• Woodwell said, “Higher and volatile interest rates, uncertainty about property values, and questions about some property fundamentals have led to an impasse in property sales and mortgage originations activity this year. Our baseline economic forecast anticipates that interest rates will moderate over the next year and half, helping to break the current logjam in transaction activity and bringing relief to financing costs and property valuations.”
For more information, please contact Jamie Woodwell at (202) 557-2936.
- Get Involved – MBA Advocacy Month Kicks Off in September
Join MBA’s Legislative and Political Affairs (LPA) team in September for MBA Advocacy Month, an all-member, national campaign focused on raising awareness regarding the top single-family and commercial/multifamily issues impacting members during these challenging, current market conditions.
• Why it matters: Throughout the month, MBA will work with members to engage with their employees and help run impactful Mortgage Action Alliance (MAA) and MORPAC campaigns. In addition, MBA staff will host (virtual) events, including legislative townhall(s) and webinars designed to discuss how members can more effectively make their voices heard with their elected officials.
• What’s next: If you are interested in learning more about how to get involved, visit mba.org/advocacymonth.
For more information, please contact Jamey Lynch, AMP at (202) 557-2818.
- Upcoming 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 webinars – which are complimentary to MBA members:
• Budgeting and Financial Planning for Non-Believers – August 22
• C-PACE Financing 101: A Commercial/Multifamily Lender’s Overview – August 23
• Current Expected Credit Losses (CECL) Updates – August 24
• Navigating the Obstacles in Multifamily Housing: Perspectives from the Affordable Rental Housing Advisory Council – August 29
• Succeeding Today and Tomorrow: Tech Tools That Can Drive More Market Share – September 7
MBA members can register for any of the above events and view recent webinar recordings by clicking here.
