CREF Policy Update: MBA, Industry Executives Meet With OCC and FDIC Leaders Ahead of Basel III Re-proposal

MBA, Industry Executives Meet With OCC and FDIC Leaders Ahead of Basel III Re-proposal

Ahead of the anticipated Basel III “”Endgame” re-proposal expected as soon as this month, MBA staff and member bank executives met with leaders of the Office of the Comptroller of the Currency (OCC) and Federal Deposit Insurance Corporation (FDIC) to discuss Basel III’s impact on the real estate lending industry and MBA’s recommended revisions.

• MBA stressed that banks are incredibly important to the CRE market, that the CRE market is incredibly important to banks, and that current capital rules keep depositories from playing their full role within that market.
• The group highlighted a harmful provision from the original 2023 proposal that would have expanded the definition of “defaulted real estate exposures” and required a bank to automatically treat (from a capital perspective) all loans as defaulted made to a borrower when any loan from that borrower (to any creditor) goes into default.
• In addition, MBA highlighted a positive element from the 2023 proposal that uses loan-to-value (LTV) ratios to determine the risk weights of loans backed by income-producing properties – with weights for CRE exposures dependent on cash flow ranging from 70% for loans with LTVs less than or equal to 60% to 110% for loans with LTVs greater than 80%.

Why it matters: The final Basel III regulatory framework will have an outsized effect on both CRE-related lending and securitizations for years to come. It is imperative that regulators calibrate the expected re-proposal correctly in order to avoid burdensome risk weights that will force depositories to forego participation in CRE-lending and all related markets.

What’s next: MBA staff will continue to work with its members to engage federal banking regulators throughout the rulemaking process on Basel III. Member feedback is imperative to ensure the re-proposal is handled correctly. Please share any comments, questions, or thoughts regarding Basel III with MBA.

For more information, please contact John Lammle at (202) 557-2789.

FHFA Increases Multifamily Loan Caps for 2026

Last Monday, the Federal Housing Finance Agency (FHFA) published the 2026 volume caps for multifamily loan purchases by Fannie Mae and Freddie Mac (the GSEs).

• The 2026 caps will be $88 billion for each GSE–an increase from $73 billion in 2025–totaling $176 billion for the calendar year. FHFA will continue to require that at least 50 of each GSE’s multifamily business be for mission-driven housing. Just like in 2025, the caps will also continue to exempt loans on dedicated workforce housing properties.

What they’re saying: In a press statement, MBA President and CEO Bob Broeksmit, CMB, said, “The $15 billion increase in the multifamily loan purchase caps to $88 billion for each GSE aligns with MBA’s expectations for the multifamily market in 2026. Stable market conditions, strong maturity volumes, and a gradual decline in interest rates are expected to lift multifamily lending activity next year. The announced cap levels will help ensure the GSEs remain a reliable source of financing for rental properties, including those serving lower-income households and rural communities.”

Why it matters: The increase in the caps reflects an expected pick-up in market activity next year.

What’s next: The annual caps allow FHFA to increase the limits as warranted by market conditions. Conversely, decreases are not allowed. MBA will continue to monitor market trends and work with policymakers on initiatives designed to promote a broad and diverse real estate finance market – in an effort to boost rental housing supply and improve affordability.

For more information, please contact Megan Booth at (202) 557-2740.

REGISTER: Dec. 4 Town Hall with MBA Leadership

On Thursday, Dec. 4, at 3:00 p.m. ET, MBA’s President and CEO Bob Broeksmit, CMB, and other MBA leaders engaged on policy issues, will host another virtual MBA Town Hall on the latest developments in the single-family and commercial/multifamily arenas under the Trump administration and 119th Congress.

• Register here. Attendees can send questions beforehand to townhall@mba.org.

Why it matters: MBA continues to monitor ongoing developments at the federal agencies and is engaging with the Trump administration and Congress to promote activities and priorities that advance investment and growth in real estate markets.

For more information, please contact Jamie Woodwell at (202) 557-2936, Bill Killmer at (202) 557-2736, and/or Pete Mills at (202) 557-2878.

MBA Responds to Concerning Multifamily Implications of Rules to Implement New Texas Tax Law

Last week, MBA submitted comments on proposed rules to implement Texas House Bill 21, enacted on May 28, 2025. In its letter, MBA reiterated its strong concerns with the law, which significantly tightens the rules for property tax exemptions used by Housing Finance Corporations (HFCs) on multifamily properties and creates substantial uncertainty for both existing and future tax‑exempt deals.

• MBA also stressed the likelihood that the new law will significantly reduce investment in future multifamily development in Texas.

Go deeper: For existing loans, MBA is concerned that tax savings previously treated as stable are now contingent on ongoing local approvals and affordability performance, increasing the risk that a deal’s economics can change midstream.

• For future development, stricter conditions and enforcement around exemptions could make many projects harder to pencil, potentially slowing new multifamily construction that depends on HFC‑related tax relief.

What’s next: MBA members should treat Texas HFC tax incentives as variable, performance‑based benefits rather than fixed assumptions and adjust underwriting, structure, and pricing expectations accordingly.

For more information, please contact Megan Booth (202) 557-2740 or Liz Facemire (202) 557-2870

Recapping the November Servicer Council Meeting

Recently, MBA hosted the November Servicer Council meeting, bringing together industry leaders to discuss key topics shaping commercial real estate finance.

• Highlights included an update of recent regulatory and legislative action, a recap of economic and market trends affecting servicing in 2025, and insights from MBA’s Insurance Conclave. Members also explored MBA Education programs and selected CRE servicing solutions members reported strengthening operational efficiency and professional development.

Why it matters: These discussions help servicers stay ahead of regulatory changes, market trends, and best practices, ensuring our industry remains resilient and innovative.

What’s next: Join us for the next Servicer Council meeting on Thursday, Jan. 15, 2026, at 1:00 PM EST.

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, opportunities, obstacles and solutions pertaining to our industry. Below, please see a list of upcoming and recent webinars – all complimentary to MBA members:

• Introduction to LIHTC for Mortgage Professionals – Dec. 10
• Commercial/Multifamily Capital Markets and Securitization – Dec. 16
• External CMF Benchmarking Requirements – Jan. 14
• Internal CMF Benchmarking Requirements – Feb. 18
• Introduction to Commercial Mortgage-Backed Securities – April 8
• Basics of Commercial Loan Closing and Loan Documentation – May 12

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.