MBA CREF Policy Update Jan. 26, 2023

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

FHFA Releases New Radon Testing Requirements

The Federal Housing Finance Agency announced an increase to the radon testing requirements for multifamily properties backed by Fannie Mae and Freddie Mac. The new standard applies to all loans with applications executed after June 20, 2023, and requires that 25% of ground-contact units be tested (as compared to 10% under the prior policy). There are notable exceptions to the radon testing requirement, including properties with no ground-contact residential units and manufactured housing communities. Also, small mortgage loans/small balance loans do not have to perform radon testing until 2024. The new 2023 Enterprise Multifamily Radon Policy can be found here.

• Why it matters: In a press statement following the announcement, MBA President and CEO Bob Broeksmit, CMB, said, “MBA and its members fully support safe and healthy multifamily housing and appreciate FHFA’s willingness to work closely with scientists and industry stakeholders during this process. We hope that these new radon testing standards strike the appropriate balance of ensuring tenant safety without leading to significant delays and added costs to multifamily projects. We ask FHFA to remain flexible on the six-month implementation date if it becomes apparent that the new standards will impact the current lending pipeline.”
• What’s next: MBA will continue to work with members and FHFA to collect more data and will encourage FHFA to consider adjustment to these standards, if necessary.

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

MBA Submits TILA Preemption Determination Comment Letter to CFPB 

On Wednesday, MBA submitted a comment letter in support of the Consumer Financial Protection Bureau’s (CFPB) notice of intent to make a determination as to whether the Truth in Lending Act (TILA) preempts a New York State commercial financing law with respect to certain provisions. In the notice, the CFPB makes the preliminary determination that TILA does not preempt the New York law governing commercial financing with respect to certain provisions relating to the use of the terms “finance charge” and “annual percentage rate.” 

• Why it matters: TILA is a federal law that governs certain disclosures in consumer credit transactions and can preempt state laws that contradict TILA provisions. In the comment letter, MBA supported the CFPB’s position that TILA and the New York commercial law govern different types of transactions, and that TILA does not preempt or override the provisions of the New York commercial law. The CFPB also noted that it has reviewed similar commercial laws in California, Utah, and Virginia and made the same preliminary conclusion that TILA does not preempt those state laws.
• What’s next: MBA will keep members informed on all relevant updates.

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

Federal Reserve Requests Climate Risk Analysis from Six Largest Banks by July 31, 2023

On Tuesday, the Federal Reserve told the nation’s six largest banks to compile and submit data on how their businesses would be impacted by climate change outcomes and the transition to a low-carbon economy. This pilot program is intended to ensure that banks are prepared for the effects of climate change.  

• Why it matters: Banks are requested to submit a “scenario analysis” to the Fed by July 31, 2023, which will include estimates on how real estate portfolios may be affected by “physical” risk.
• What’s next: MBA will follow developments and is forming a member group to learn what data banks intend to submit. 

For more information, contact Grant Carlson at (202) 557-2765.

Commercial and Multifamily Mortgage Delinquency Rates Increased Slightly Through the Fourth Quarter of 2022

Delinquency rates for mortgages backed by commercial and multifamily properties increased slightly through the fourth quarter of 2022, according to MBA’s latest CREF Loan Performance Survey, released Tuesday. 

• Jamie Woodwell, MBA’s Head of Commercial Real Estate Research, said, “Delinquency rates increased by small amounts for most property types even while the overall rate of delinquency remains low. CRE markets are going through a period of adjustment brought on by the increase in interest rates and investment yields spawned by the Federal Reserve’s actions in 2022, as well as by uncertainty about the direction of the economy in 2023. As those changes continue to ripple through the CRE space, equity, and debt markets, it’s likely delinquency rates will rise from what have been, in some cases, record lows.”
• To download the survey, click here.

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

Register Today for MBA’s mPact Summit on March 7 

On March 7, mPact, MBA’s network for young professionals, will host its first mPact Summit in Plano, Texas. Join an exclusive group of young professionals for a day of career development and industry programming. Young professionals have selected the sessions and developed networking opportunities with senior leaders for this inaugural event. 

• Why it matters: Event topics include developing leadership skills, learning how to navigate your career, and building and practicing networking skills. You won’t want to miss this opportunity. 
• What’s next: Registration is capped at 100 participants and closes on February 27. Register now.

For more information, contact Jacky Salazar at (202) 557-2746.

[WATCH]: mPower Moments: On Finding Your Inner Voice with Nicole Provonchee

In this mPower Moments episode, mPower Founder Marcia M. Davies sits down with Nicole Provonchee, Chief Coaching Officer and Founder of Bright Blue Consulting. Provonchee discusses her career journey and her passion for motivating women professionals from across the country and provides solutions on how women can stop self-sabotaging their careers and focus on the unique character traits that make them successful. Provonchee also shares tips on how women can finetune their inner voice by turning down the “critical voice” and turning up the “self-promotional and self-advocacy voice.” Provenchee will take the mPower stage on Tuesday, February 14, at CREF where she’ll provide critical tips on how we can stop career-limiting behaviors. Learn more here.

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

For more information, contact Marcia Davies at (202) 557-2707.

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 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:

• Using the MISMO API Toolkit to Build Your Own FIPS Code Lending API – January 26
• Combating the Downturn: Strategies to Optimize Borrower Support in Recessionary Environments – January 31
• Home Equity Lending: An Assessment of Today’s Market Landscape & Cashout Opportunities – February 9
• Five Steps to Improve Efficiency, Compliance and Automation in Your Mortgage Operations – February 16

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.