CREF Policy Update: HUD Finalizes Rule on Multifamily Disbursements
HUD Finalizes Rule on Multifamily Disbursements
Last week, the Department of Housing and Urban Development (HUD) published its final rule on disbursing multifamily mortgage proceeds.
• The final rule does not differ from the proposed rule and will allow 1 percent of mortgage proceeds to be drawn before equity is exhausted.
The big picture: MBA had urged HUD to allow mortgage proceeds to be utilized on any construction draw proportional to the amount of debt relative to total cost. This change would promote multifamily rental housing supply by reducing interest rates on construction loans without increasing HUD’s risk because the agency already has control of the equity escrow.
Why it matters: Allowing for disbursements is critical to ensure the loan can be securitized into a Ginnie Mae security – and MBA is thankful for this permanent change. However, allowing a draw of only 1% unnecessarily increases the cost of multifamily construction lending (due to interest rate fluctuation).
What’s next: MBA will continue to advocate for proportional draws to reduce the costs of multifamily housing construction.
For more information, please contact Megan Booth at (202) 557-2740.
MBA Leads Housing Coalition Letter to Congress on ROAD to Housing Act
On Tuesday, MBA led a coalition of 15 housing trade groups in a letter sent to all members of the U.S. House and Senate in support of the Renewing Opportunity in the American Dream to Housing Act (“ROAD to Housing Act,” S. 5027/H.R. 990), authored by Senator Tim Scott (R-SC) and Representative French Hill (R-AR) and recently introduced in the Senate ( September) and House (October).
• Senator Scott and Congressman Hill will chair the Senate Banking, Housing, and Urban Affairs and House Financial Services Committees, respectively, at the outset of the 119th Congress in January.
Go deeper: The proposed legislation offers reforms to current housing counseling and financial literacy, rental housing assistance, manufactured housing, construction grant, and small dollar lending programs. The legislation would also require annual congressional testimony from the HUD Secretary and increased congressional oversight of the Federal Housing Administration’s Mutual Mortgage Insurance Fund.
Why it matters: The supportive joint letter highlights that the proposal is positioned to serve as a baseline for discussions of any housing program reauthorizations or reforms – both legislative and regulatory – in both chambers of Congress next year. The letter also notes the groups’ strong collective belief that both legislative and regulatory reforms are needed to boost housing supply and improve affordability.
What they’re saying: In a press statement after the bill was introduced earlier this year in the Senate, MBA President and CEO Bob Broeksmit said, “MBA continues to be a fierce proponent for legislative reforms that increase housing supply and affordability. We will work with Senator Scott – and policymakers on both sides of the aisle – to build consensus and promote the enactment of workable solutions like those proposed in this bill.”
What’s next: MBA has been actively engaged with Senator Scott and Congressman Hill (and their fellow committee members on the Senate Banking and House Financial Services panels, respectively) on housing policy matters. That dialogue will continue during the 119th Congress.
For more information, please contact Bill Killmer at (202) 557-2936, Ethan Saxon at (202) 557-2913, George Rogers at (202) 557-2797 and Madisyn Rhone at (202) 557-2741.
CFPB Director Testifies Before Senate Banking Committee
Last Wednesday, the Senate Banking Committee held its last hearing of 2024, titled “Consumer Protection: Protecting Workers’ Money and Fighting for the Dignity of Work.” Director Rohit Chopra of the Consumer Financial Protection Bureau (CFPB) delivered what is likely to be his final semi-annual report to Congress. A transcript of the hearing can be found here.
Why it matters: While much of the hearing was spent re-litigating the role and structure of the CFPB, Senators discussed rising housing costs, mortgage servicing rules, the use of algorithms in setting rents, and recent CFPB enforcement actions. Senators Tina Smith (D-MN) and Mike Rounds (R-SD) mentioned their bipartisan efforts to expand rural housing and their intent to continue working on housing issues in the new Congress.
What’s next: At the hearing, Chopra indicated he would not resign from his post but would wait to be relieved from his duties by incoming President Trump on January 20, 2025 (or shortly thereafter). The nomination of a new CFPB Director to serve in the Trump administration would likely lead to changes to the agency’s resource allocations and enforcement/rulemaking practices and priorities.
For more information, please contact Ethan Saxon at (202) 557-2913 or George Rogers at (202) 557-2797.
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 – all complimentary to MBA members:
• High Performance Negotiations – Lessons and Strategies – Dec. 17
• Managing Rising Insurance Risks in Commercial Lending – Jan. 14
• Fundamentals of Commercial Insurance Issues and Problems – Jan. 28
• CREF Career Conversations: Insights from Industry Leaders – Jan. 28
• Navigating and Ensuring Accurate Reporting with the MBA Commercial and Multifamily Inspection Form – Jan. 30
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.
