CREF Policy Update: HUD Extends Flood Rule Implementation Date Following MBA, Industry Requests
HUD Extends Flood Rule Implementation Date Following MBA, Industry Requests
Following persistent advocacy efforts by MBA and other housing groups–including another letter sent last Wednesday–the Department of Housing and Urban Development (HUD) pushed back the effective date of its Federal Flood Risk Management Standard (FFRMS).
• The rule – announced in June 2024 and previously set to go into effect for Federal Housing Administration (FHA) Multifamily applications and pre-applications submitted after September 1, 2024 – will now go into effect on Oct. 1, 2024.
• MBA led a strong industry coalition response over the summer asking for a delay given that HUD had been unable to answer important questions about implementation and how to determine a property’s location in a floodplain.
Why it matters: HUD’s FFRMS greatly expands the covered floodplain area and requires significant elevation of properties within those designated areas.
What’s next: As the new deadline approaches, MBA will continue to work with HUD to ensure that FHA-insured units can be built.
For more information, please contact Megan Booth at (202) 557-2740.
MBA Issues MAA Call to Action on House ‘YIMBY’ Bill
MBA last week issued a Mortgage Action Alliance (MAA) Call to Action that urges members to contact their U.S. Representative and ask him/her to urge congressional leaders to bring H.R. 3507, the bipartisan Yes in My Backyard Act (YIMBY) legislation introduced by Congressmen Mike Flood (R-NE) and Derek Kilmer (D-WA), to the House floor for a vote in September.
Why it matters: The YIMBY Act would help to eliminate ill-conceived land use policies and remove barriers that depress production of housing in the United States.
• By requiring Community Development Block Grant (CDBG) recipients to report periodically on the extent to which they are removing land use policies that do not adequately promote inclusive and affordable housing practices (both multifamily and single-family residential), the bill would increase transparency and encourage a discussion of more thoughtful and inclusive development in local communities across the country. The bill does NOT mandate the implementation of any specific practices, thereby preserving local land use control.
What’s next: Your help is needed to bring H.R. 3507 before the full House Floor in September. Take action today.
For more information, please contact Rachel Kelley at (202) 557-2816, Madisyn Rhone at (202) 557-2741 or Jamey Lynch at 202-557-2818.
GSEs Announce Details for New Resident-Centered Practices at Multifamily Properties
Last Wednesday, Fannie Mae and Freddie Mac (collectively, the “GSEs”) announced additional details on how new required resident-centered practices will be implemented and monitored. The new standards, announced by the Federal Housing Finance Agency (FHFA) in July 2024, stop short of mandating any rent control or caps but require multifamily borrowers to give:
• 1) a five-day grace period for non-payment of rent before late fees can be charged; (2) a written notice of a rent increase at least 30 calendar days before said increase; and (3) a written notice of the scheduled expiration of the lease at least 30 calendar days before said expiration (provided that such notice is not required if the existing term of the lease is two months or less).
Go deeper: The new tenant protections will apply to loans originated on or after Feb. 28, 2025, with certain exemptions. The GSEs have released identical policy frameworks that leverage the existing property inspection and reporting process to confirm borrower compliance with the new requirements.
• The policy frameworks each state that “Servicers will review inspection and reporting forms to determine compliance, will then contact borrowers that may be non-compliant with the standards and will attempt to resolve issues. Servicers will report unresolved issues to the Enterprises. The Enterprises will monitor Servicer compliance through the existing Lender Assessment process.”
• The GSEs plan to provide training to lenders before the Feb. 28, 2025, effective date
What’s next: MBA will remain engaged with FHFA and the GSEs on the implementation of these new practices.
For more information, please contact Stephanie Milner at (202) 557-2747.
MBA Forecast: Commercial/Multifamily Borrowing and Lending to Increase 26% to $539 Billion in 2024
Total commercial and multifamily mortgage borrowing and lending is expected to finish the year at $539 billion in 2024, which is a 26% increase from 2023’s total of $429 billion. This is according to an updated baseline forecast released by MBA last week.
• Multifamily lending alone (which is included in the total figures) is expected to rise to $297 billion this year – a 21% increase from last year’s estimate of $246 billion. MBA anticipates borrowing and lending next year will increase to $665 billion in total commercial real estate lending, with $390 billion of that total in multifamily lending.
What they’re saying: MBA’s Head of Commercial Real Estate Research Jamie Woodwell: “The recent moderation in interest rates, coupled with the large volume of loans maturing in coming quarters, should prompt an uptick in mortgage borrowing from the low levels we’ve seen over the last two years. The exact timing of the bounce-back will depend on how quickly property owners jump on long-term interest rates that are down significantly from where they were a year ago.”
For more information, please contact Jamie Woodwell at (202) 557-2936.
U.S. District Court Judge Rules in Favor of CFPB in 1071 Challenge
Last Monday, the U.S. District Court for the Southern District of Texas ruled in favor of the Consumer Financial Protection Bureau (CFPB) in a case brought against the CFPB by the American Bankers Association and other trade groups.
• A Texas judge found that the rule is reasonable and “is much more modest than plaintiffs would lead the court to believe.” This ruling does not impact the implementation dates established by the CFPB’s interim final rule released in June 2024 and described below.
Go deeper: In August of 2023, the U.S. District Court for the Southern District of Texas issued an order blocking enforcement of 1071 by the CFPB for only members of the American Bankers Association and/or Texas Bankers Association and then extended that order to all lenders in October of 2023.
• The order required the CFPB to extend the compliance dates following a decision by the Supreme Court in the case Community Financial Services Association (CFSA) v. Consumer Financial Protection Bureau. In May, the Court ruled in favor of the CFPB, upholding its funding mechanism.
• In June 2024, the CFPB issued an interim final rule extending the 1071 Small Business Reporting Rule’s compliance dates.
Why it matters: The 1071 Rule requires some MBA members to collect and report data on commercial real estate loans. Lenders with a high-volume of loans will first submit data by June 1, 2026, while moderate and low-volume lenders will first submit data by June 1, 2027.
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.
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:
• Finding Opportunities with Distressed CRE in 2024 – Sept. 10
• MAA Quarterly Webinar: 2024 Elections Preview – Sept. 17
• Overview of Commercial Insurance Compliance – Oct. 3
• Navigating and Ensuring Accurate Reporting with the MBA Commercial and Multifamily Inspection Form – Dec. 5
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.
