CREF Policy Update: FHFA Proposes GSE Multifamily Housing Goals for 2025-2027
FHFA Proposes GSE Multifamily Housing Goals for 2025-2027
Last Thursday, the Federal Housing Finance Agency (FHFA) proposed the multifamily housing goals for 2025 through 2027 for Fannie Mae and Freddie Mac (together the “GSEs”).
• The proposal sets the percentage-based requirements for calendar years 2025, 2026, and 2027 based on the percentage of affordable units in multifamily properties financed by mortgages purchased by the GSEs.
Go deeper: The benchmark levels proposed for each of the three years are 61% of annual loan acquisitions (in units) for the low-income goal (80 Area Median Income [AMI]), 14% for the very low-income subgoal (50 AMI), and 2% for the small multifamily low-income subgoal (80 AMI).
• This is a slight change from the 2023 and 2024 goals, which required 12% for the very low-income sub-goal and 2.5% for the small multifamily low-income sub-goal. FHFA did not propose changes to the criteria that determine which units qualify for housing goal credit.
What’s next: MBA will work with members to provide feedback to FHFA, if warranted.
For more information, please contact Stephanie Milner at (202) 557-2747.
Coalition Joins MBA in Asking for HUD Underwriting Enhancements
Last Thursday, MBA and a coalition of groups implored the Department of Housing and Urban Development (HUD) to roll back the Debt Service Coverage Ratio (DSCR) and the Loan to Cost (LTC) to pre-2010 levels.
• The provisions were put in place in response to the Great Financial Crisis, revising the underwriting standards for its multifamily programs. The proposal would only roll back the LTV and DSCR thresholds and would retain additional underwriting requirements created by the Risk Mitigation Notice.
Why it matters: In the current market environment, liquidity is restricted and banks are much more hesitant to provide construction financing. HUD’s role in today’s market is more important than ever in creating housing. MBA believes that more than 30,000 additional units over three years could be added to the HUD pipeline under this change.
What’s next: MBA will continue to work with HUD and industry partners to increase the affordability and availability of rental housing financing.
For more information, please contact Megan Booth at (202) 557-2740.
HUD Acknowledges Issues with NSPIRE
Last Thursday, HUD responded to MBA’s recent letter urging it to repair the new physical inspection protocol (NSPIRE) and to ensure that servicers are not held liable for their inability to access the system.
• In its response letter, HUD stated that they “understand the barriers faced by lenders in performing inspections and will not pursue enforcement action against stakeholders who’ve demonstrated good faith effort to comply with their requirements.”
Why it matters: Servicers should not be held responsible for failure to conduct inspections or respond to inspection findings when they are unable to access the system.
What’s next: MBA has convened a working group that meets monthly with NSPIRE staff to work out the problems with the current system.
For more information, please contact Megan Booth at (202) 557-2740.
Commercial/Multifamily Borrowing Increased 3% in the Second Quarter of 2024
Commercial and multifamily mortgage loan originations increased 3% in the second quarter of 2024 compared to a year ago, and increased 27% from the first quarter of 2024, according to MBA’s Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations, released last Tuesday.
What they’re saying: MBA’s Head of Commercial Real Estate Research Jamie Woodwell: “Most capital sources remain ready, willing and able to lend on properties that can support a loan. Driven by growth in the single-asset single-borrower markets, originations for CMBS grew significantly during the quarter. With interest rates moderating and a large slug of loans maturing, it is likely we’ll see more borrower activity in the coming quarters.”
Go deeper: Originations in the second quarter of 2024 varied across the different property types. There was a 172% year-over-year increase in the dollar volume of loans for hotel properties, a 77% increase for industrial properties, and a 50% increase for health care properties. Retail property originations decreased 7%, multifamily properties decreased 14%, and there was a 29% decrease for office properties.
For more information, please contact Jamie Woodwell at (202) 557-2936.
[WATCH]: mPower Moments: On Finding Your Passion with HUD’s Julienne Joseph
mPower Founder Marcia M. Davies sits down with Julienne Joseph, Senior Counsel and Chief Advisor to Acting HUD Secretary Adrianne Todman, for an inspiring conversation on her career journey and the various roles she has held before HUD, including her tenure at MBA.
Go deeper: Throughout the conversation, Joseph discusses her passion for housing equality and the work she has done to improve the housing finance system, including working on numerous policies such as FHA’s calculation of student debt and the mortgage insurance premium (MIP) cut. She also highlights the importance of having empathy within the workplace and how that can be a superpower to possess when working with the communities she serves.
For more information, please contact Marcia Davies (202) 557-2707.
Participate in the Mortgage Action Alliance’s “Advocacy in August” Campaign
MBA’s “Advocacy in August” campaign is well underway, with industry advocates and MAA members taking action on current real estate finance policy priorities, including meeting with elected officials.
It’s not too late to get involved! MBA’s Legislative and Political Affairs team will help coordinate in-person and virtual meetings in your elected officials’ home states or districts.
For more information and to participate, please contact Jamey Lynch at 202-557-2818.
Register for MAA’s Next Quarterly Webinar on Sept. 17
MBA’s Legislative and Political Affairs Team is inviting you to our upcoming Pre-Election Update on National Voter Registration Day, Sept. 17, at 3:00 PM ET. Join us as we dive into the policy implications that could flow from the upcoming 2024 elections and impact our industry.
Why it matters: This webinar will offer a comprehensive overview of the current legislative landscape and forecast potential political changes that could impact your business and the broader industry.
What’s next: Register with code MAA2024 to receive complimentary access to this webinar.
For more information, please contact Erin Reilly at (202) 557-2751 or Margie Ehrhardt at (202) 557-2708.
REGISTER: MBA’s Commercial/Multifamily Insurance Conclave 2024
MBA is hosting a Commercial/Multifamily Insurance Conclave 2024 on Oct. 6-8 in Kansas City, Mo.
• This premier event brings together Insurance and Risk professionals from all capital sources to discuss insurance market trends, best practices for addressing and implementing changes in the future, and much more.
Why it matters: Rising property insurance costs and diminishing policy options are increasingly becoming a problem in several states, and insurance requirements are becoming more strict.
What’s next: Register today to secure your seat.
For more information, please contact Jacky Salazar at (202) 557-2746.
Upcoming MBA Education Webinars on Critical Industry Issues
MBA Education continues to deliver timely commercial/multifamily and single-family 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:
• Affordable Housing Insights: Understanding Consumers, Buyers, and Uses of Accessory Dwelling Units – Aug. 29
• Finding Opportunities with Distressed CRE in 2024 – Sept. 10
MAA Quarterly Webinar: 2024 Elections Preview – Sept. 17
Overview of Commercial Insurance Compliance – Oct. 3
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 (202) 557-2931.
