CREF Policy Update: MBA and State/Local Partners Join Broad Industry Call for Key Small Business Deduction Extension
MBA and State/Local Partners Join Broad Industry Call for Key Small Business Deduction Extension
Last week, MBA and 41 of our state/local mortgage banking association partners joined a Main Street Employers coalition letter in support of the permanent extension of Internal Revenue Code Section 199A, the small business “passthrough” deduction (up to 20 percent) of Qualified Business Income (QBI).
• The coalition letter, which was signed by more than 230 small business organizations and addressed to the House and Senate authors of the 199A permanence legislation (Rep. Lloyd Smucker (R-PA) and Senator Steve Daines (R-MT)), calls for the proposal’s inclusion in any emerging GOP tax/reconciliation package.
Why it matters: Many of MBA’s commercial/multifamily and residential members are organized as “passthroughs,” (e.g., S Corps, LLCs, partnerships, etc.,) as are many owners of commercial real estate. Section 199A was enacted as part of the 2017 Tax Cuts and Jobs Act (TCJA) and intended to provide tax parity to small businesses – as compared to the TCJA’s permanent corporate rate reduction to 21 percent for C corporations.
Go deeper: MBA worked with the Treasury Department (in 2018 and beyond) to help ensure the bulk of our industry’s “passthrough” members would qualify for the QBI deduction at the time of the provision’s implementation.
What’s next: MBA – and its blue-ribbon Tax Task Force – will continue to work with our Main Street Employers coalition partners to advocate for Section 199A permanence with the current Congress and key incoming Trump White House and Treasury officials.
For more information, please contact Bill Killmer at (202) 557-2736 and George Rogers at (202) 557-2797.
HUD Nominee Headed to Senate Floor for Confirmation Votes
Last week, the Senate Finance Committee voted in favor of sending the nomination of Scott Bessent to be Treasury Secretary to the Senate floor. He was confirmed Monday night.
Simultaneously, the Senate Committee on Banking, Housing, and Urban Affairs voted to advance the nomination of Scott Turner to be Secretary of the Department of Housing and Urban Development (HUD).
What they’re saying: In a press statement following Turner’s advancement, MBA President and CEO Bob Broeksmit, CMB, said, “MBA appreciates the importance being placed on Scott Turner’s nomination to serve as the next HUD Secretary and urges Senate leadership to schedule a floor vote on his confirmation as soon as possible.”
Broeksmit further advocated for FHA program mortgage insurance premium cuts, adding, “…moves could also be taken to make HUD’s multifamily programs less expensive, including lowering multifamily mortgage insurance premiums and excessive escrow account requirements.”
Why it matters: Bessent and Turner – if confirmed by the full Senate – will play pivotal roles on many of MBA’s key issues, including real estate-related tax policy; Opportunity Zones and other tax incentives for office conversions, affordable housing or other policy objectives; a responsible release of Fannie Mae and Freddie Mac (the GSEs) from conservatorship; capital rules; and other regulations and directives across capital sources..
What’s next: MBA will continue to work with Senators on both sides of the aisle in support of the swift confirmation of Turner – so that the teams at both Treasury and HUD can be individually nominated, confirmed, and begin working at the agencies as soon as feasible.
For more information, please contact George Rogers at (202) 557-2797 or Ethan Saxon at (202) 557-2913.
Trump Executive Orders Target HUD Energy, Flood Rules
Last Monday, President Donald Trump issued two Executive Orders (EOs) that impact significant rules from HUD. The Trump EOs repealed prior Administrations Executive Orders that resulted in HUD issuing rules implementing Federal Flood Risk Management Standards (FFRMS) and mandating compliance with the current International Energy Conservation Code (IECC) on new single-family and multifamily buildings financed by FHA. Both rules would significantly increase costs of affordable ownership and rental housing. The Trump EOs could lead to withdrawal or significant changes to both the FFRMS Rule and the Energy Building Codes Rule.
Why it matters: MBA advocated against both of these Final Rules, as they add significant costs to development of new housing, and were published before appropriate tools were in place to implement them. These new EOs demonstrate intent to halt or repeal these rules.
What’s next: It is believed that HUD will have to publish guidance and new Federal Register notices to rescind or halt these rulemakings, which were finalized in April of 2024. MBA will continue to advocate for their reversal, and for common sense proposals to replace them.
For more information, please contact Megan Booth at (202) 557-2740.
Ways and Means Committee Explores Tax Policy Priorities
Last Wednesday, the House Ways and Means Committee held a “member day” hearing, allowing Representatives to present their tax policy priorities. The discussion included potential extensions of the TCJA enhancements to the Low-Income Housing Tax Credit (LIHTC) as well as policies affecting housing affordability and real estate finance.
Why it matters:
• Many lawmakers stressed the importance of making the 199A pass-through deduction permanent, citing its value to small businesses, including real estate professionals.
• Bipartisan calls were made to expand LIHTC, underscoring its critical role in addressing housing supply shortages across rural, suburban, and urban markets.
• Key debates on clean energy tax credits, the estate tax, and the state and local tax (SALT) deduction cap also took place.
Go deeper: Read a complete summary of the hearing here.
What’s next: MBA will continue to advocate for the preservation of the 199A deduction, LIHTC enhancements, and all tax policies that support housing affordability and growth.
For more information, contact Bill Killmer at (202) 557-2936 or Madisyn Rhone at (202) 557-2741.
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:
• Navigating and Ensuring Accurate Reporting with the MBA Commercial and Multifamily Inspection Form – Feb. 26
• CREF Career Conversations: Insights from Industry Leaders – Feb. 6
• Understanding Parametric Insurance: A Lender’s Guide to Maximizing Protection and Efficiency – April 10
• Uncovering Fraud in Commercial/Multifamily Lender-Placed Insurance – April 15
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.
