CREF Policy Update: June 8, 2023

1. FHFA Issues Request for Input on Multifamily Tenant Protections

On Tuesday, the Federal Housing Finance Agency (FHFA) issued a 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.”

• 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 over the last several months 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 work with members to review the RFI and will provide recommendations by the announced deadline of July 31, 2023.

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

2. Congress Clears Debt Ceiling Legislation; President Joe Biden Signs Into Law

On Wednesday evening, the House of Representatives passed H.R. 3746, the Fiscal Responsibility Act, by a strong bipartisan vote of 314-117. The Senate quickly followed suit yesterday, passing the measure without amendment by a tally of 63-36. In return for suspending the debt limit until January 1, 2025, the legislation, negotiated by President Joe Biden and House Speaker Kevin McCarthy (R-CA), creates caps on defense- and non-defense discretionary spending for Fiscal Years (FY) 2024 and 2025, rescinds $28 billion in unspent COVID-19 emergency funding, halts a portion of previously-authorized funding for the Internal Revenue Service (IRS), codifies the end of the student loan repayment pause (already scheduled to end on June 30, 2023), extends work requirements for certain nutrition assistance programs, and enacts certain energy project permitting reform provisions, among other items.

The negotiated deal also contains language that provides incentives for the Congress and the President to work in a bipartisan fashion to finish all 12 appropriations bills for Fiscal Years FY 2024 and 2025. If agreements are not reached, and appropriations are operating via a short-term Continuing Resolution (CR), a “sequestration” would be ordered to maintain the integrity of discretionary spending limits.

• Why it matters: Treasury Secretary Janet Yellen had notified Congress that “extraordinary measures” to meet the country’s debt obligations would likely be exhausted by June 5. MBA closely monitored negotiations between the White House and Congress in recent months and remained in regular contact with Treasury, the Department of Housing and Urban Development (HUD), and key congressional leaders. In late March, MBA led a broad real estate coalition letter addressed to congressional leaders urging the White House and Congress to take steps to raise the federal debt ceiling well in advance of risking default.
• What’s next: The “clawback” of previously authorized, but unspent, COVID-related funds include an estimated portion of previously allocated Emergency Rental Assistance and Homeowner Assistance funds, as well as a small portion of HUD and USDA program funding. MBA will continue to actively work with key appropriators to seek enactment of our FY 2024 funding priorities.

For more information, please contact Bill Killmer at (202) 557-2736.

3. MBA Issues MAA Call to Action to Support Legislative Efforts Addressing Davis-Bacon Split-wage Determinations

MBA’s Mortgage Action Alliance (MAA) issued a Call to Action this week that urges MAA members to support important legislation designed to increase the supply of affordable housing units by making targeted reforms to requirements under the Davis-Bacon Act. Earlier this year, Rep. Beth Van Duyne (R-TX) introduced H.R. 1053, the “Housing Supply Expansion Act,” which was followed in late May by Senators John Thune (R-SD) and Jerry Moran (R-KS) introducing S. 1682, an identical companion measure.

• Why it matters: This legislation would address burdensome split-wage determinations (assigning multiple wage rate types to construction projects) by prohibiting this practice with respect to residential construction projects. The use of these split-wage determinations for residential housing projects by the Department of Labor (DOL) under Davis-Bacon continues to create significant administrative burdens and complexities for the HUD private sector partners. The two bills will help accelerate the creation of safe, quality housing, and their passage should take precedence when our nation’s affordable housing needs are so acute.
• What’s next: The introduction of these bills comes as the DOL is actively considering updated regulations implementing Davis-Bacon wage rates. As a MAA member, use the above links to contact your elected officials today to cosponsor H.R. 1053 and S. 1682 – and urge both House and Senate leaders to take action to move these bills forward as quickly as possible.

For more information, please contact Ethan Saxon at (202) 557-2913, Stephanie Milner at (202) 557-2747, or Bill Killmer at (202) 557-2736.

4. MBA Joins Broad Coalition Letter in Support of LIHTC Improvements

On Wednesday, MBA joined the ACTION Campaign’s letter – with a broad coalition of more than 2,600 groups – urging support for taking action on House and Senate versions of the Affordable Housing Credit Improvement Act. The bipartisan, bicameral bills (H.R. 3238 and S. 1557, respectively) would expand and strengthen the Low-Income Housing Tax Credit (LIHTC) to address the nationwide affordable housing shortage. The legislation is estimated to help enable the construction of more than 2 million new affordable rental housing units over the next decade, while ensuring the LIHTC program better serves a variety of at-risk and underserved communities.

• Why it matters: A key issue at MBA’s April National Advocacy Conference (NAC23), this legislation would increase the number of credits allocated to each state, reinstating a 12.5 percent increase that was enacted in 2018, but expired in 2021. The bill also includes tweaks to account for properties receiving Inflation Reduction Act benefits and to improve data sharing among federal agencies.
• What’s next: A copy of the letter is here. MBA and its coalition partners will continue to advocate for housing affordability-related priorities, including LIHTC, to be incorporated in any tax legislation potentially considered by the House and Senate prior to year’s end.

For more information, please contact Alden Knowlton at (202) 557-2741, Borden Hoskins at (202) 557-2712, Ethan Saxon at (202) 557-2913, or Bill Killmer at (202) 557-2736.

5. Commercial and Multifamily Mortgage Delinquency Rates Increased in the First Quarter of 2023

Commercial and multifamily mortgage delinquencies increased in the first quarter of 2023, according to the Mortgage Bankers Association’s (MBA) latest Commercial/Multifamily Delinquency Report, released yesterday.

• Jamie Woodwell, MBA’s Head of Commercial Real Estate Research, said, “Ongoing stress caused by higher interest rates, uncertainty around property values, and questions about fundamentals in some property markets are beginning to show up in commercial mortgage delinquency rates. Delinquency rates increased for every major capital source during the first quarter, foreshadowing additional strains that are likely to work their way through the system.”
• To view the report, click here.

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

5. 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.

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

6. 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:

• Profit & Succeed with Down Payment Assistance Programs – June 8
• Benchmarking for Performance and the Performance Ratios Every Mortgage Banker Must Know – June 13
• MSR Transfers: Balancing Risk, Customer Experience and Efficiency – June 15
• How to Leverage Document AI for Unparalleled Efficiency in Loan Production and Loan Servicing – June 27
• Mastering Revenue Metrics of Construction to Permanent Loans – July 18
MBA members can register for any of the above events and view recent webinar recordings by clicking here.

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