CREF Policy Update: Federal Government Shutdown Continues; Read MBA’s Member Guide
Federal Government Shutdown Continues; Read MBA’s Member Guide
Bipartisan talks to reopen the government via a short-term spending stopgap bill remain frozen.
• Read MBA’s member guide that outlines the potential impacts to single-family and multifamily government lending programs. The federal government has been shut down since Congress failed to come to an agreement on Fiscal Year (FY) 2026 funding before the Sept. 30, 11:59 p.m. ET deadline.
Why it matters: The shutdown has necessitated the furloughs of many federal employees as well as significant curtailment of certain operations that require agency staff intervention or action. Actions at the Department of Housing and Urban Development, Treasury Department, Veterans Affairs, and the Department of Agriculture are particularly impactful for lending activity.
• HUD’s Office of Multifamily Housing will conduct closings and endorsements for projects with Firm Commitments/ Firm Approval Letters issued prior to the shutdown. They will also process amendments to commitments. Other requests will only be handled on an emergency basis, for the imminent threat to the safety of the residents, or to the protection of property in HUD-insured or assisted multifamily projects.
• National Flood Insurance Program (NFIP) authorities have expired, a disruptive development that impacts real estate transactions in flood-prone areas where insurance is required. MBA continues to advocate for an immediate extension of NFIP’s authority – including a separate/targeted authorization measure – to avoid long-term disruptions to the housing and flood insurance markets. Read the recent trade groups/coalition letters to congressional leadership here and here.
Congressional hearings on flood insurance (and other housing-related issues) are being planned for both the Senate and House in the coming weeks.
Go deeper: On Sept. 19, House Republicans passed a short-term Continuing Resolution (CR) to extend FY 2024-2025 funding through Nov. 21, 2025. In the Senate, multiple attempts to advance either the House bill or a Democratic alternative have failed, with Democrats seeking to include additional health care priorities.
What’s next: MBA remains in contact with lawmakers and regulators and encourages members to share any real-time operational impacts. A prolonged shutdown – particularly with extended federal agency furloughs – risks significant disruption for the industry and consumers. MBA continues to monitor all funding votes as negotiations evolve.
For more information, please contact Bill Killmer at (202) 557-2736 or Jamie Woodwell at (202) 557-2936.
Senate Confirms Jonathan McKernan as Undersecretary of the Treasury for Domestic Finance
Last Tuesday, Jonathan McKernan was confirmed by the full Senate by a vote tally of 51-47 to be Undersecretary of the Treasury for Domestic Finance. McKernan previously served on the Federal Deposit Insurance Corporation (FDIC) Board, as a key Treasury, Federal Housing Finance Agency (FHFA), and congressional aide, and in private law practice.
Why it matters: In his role as Undersecretary, McKernan will play a key role on issues related to financial institutions/markets and fiscal service – including municipal debt finance and the housing GSEs.
What they are saying: In a press statement following his confirmation, MBA’s Broeksmit said, “MBA congratulates Jonathan McKernan on his well-deserved confirmation as Undersecretary for Domestic Finance. We believe that he will demonstrate a balanced perspective on issues pertaining to fiscal policy, financial markets, housing affordability, and financial institutions.”
• Broeksmit added, “Importantly, Undersecretary McKernan will play a key role in the future of the GSEs. We will work collaboratively with Treasury staff and the Federal Housing Finance Agency to develop and execute a careful and calibrated plan for the GSEs’ future in a way that avoids any market disruption or increased costs for borrowers.”
What’s next: MBA looks forward to working with Undersecretary McKernan and his staff on all issues pertinent to real estate finance – both commercial/multifamily and single-family in nature.
For more information, please contact George Rogers at (202) 557-2797 and Bill Killmer at (202) 557-2736.
ROAD To Housing Proposal Advances Within Senate Version of NDAA
Last week, the full Senate passed its version of a Fiscal Year (FY) 2026 National Defense Authorization Act (NDAA) by a bipartisan vote of 77 to 20. A “Manager’s Amendment” that contained the text of the Renewing Opportunity to the American Dream (“ROAD”) to Housing Act, was adopted by voice vote prior to the bill’s final passage.
The “ROAD” proposal, which cleared the full Senate Banking Committee by a bipartisan vote of 24-0 earlier this summer, contains numerous individual bills that seek to expand and preserve housing supply, improve housing affordability and access, and bolster the oversight of major federal housing programs.
What they’re saying: MBA’s Broeksmit in a press statement released at the time said, “The Senate’s passage of the ROAD to Housing Act [within the NDAA] is a win for housing affordability and consumers. MBA applauds Senate Banking Committee chair Tim Scott (R-SC) and Ranking Member Elizabeth Warren (D-MA) for championing practical, bipartisan solutions on housing issues.”
Broeksmit added, “As the bill moves to the House, MBA will stay fully engaged with congressional leaders in both chambers to strengthen key provisions…”
Why it matters: MBA has previously indicated support for the overall proposal and provided specific commentary on several key sections of the package, including:
• Rural Housing Service (RHS) program reforms that include vital IT upgrades, improved lending guidelines for Accessory Dwelling Units (ADUs), and the assumption of USDA/RHS loans;
• A required study of FHA’s multifamily loan limits, and the appropriateness of those limits’ accompanying inflation index/measure, while granting HUD rulemaking authority (with FHA input) to adjust the limits upward to better match individual housing market costs and conditions;
• Simplification/acceleration of National Environmental Protection Act (NEPA) reviews for small and infill housing projects;
• Federal Transit Administration (FTA) program guide changes designed to encourage more housing located near public transportation routes; and,
• Directing HUD to develop “best practice” zoning and land-use frameworks to help communities identify and overcome barriers to housing development.
What’s next: MBA will continue conversations with senior House members and key staff, including those serving on the Financial Services Committee, to support efforts to offer targeted counterproposals to many elements contained within the now Senate-passed ROAD to Housing text.
• At this writing, it is unclear how – and when – the House will proceed on many of those individual housing proposals – and/or how House and Senate leaders will ultimately reconcile their differences between respective versions of a defense authorization proposal prior to year’s end. There are no parallel housing provisions within the House version of an FY26 NDAA product that cleared that chamber shortly after Labor Day.
For more information, please contact George Rogers at (202) 557-2797 or Bill Killmer at (202) 557-2736.
Banking Agencies Issue NPR Regarding “Unsafe” or “Unsound” Practices and Matters Requiring Attention
Last Tuesday, the Office of the Comptroller of the Currency (OCC) and Federal Deposit Insurance Corporation (FDIC) announced a Notice of Proposed Rulemaking (NPR) aimed at defining key banking terms and revising the framework for issuing Matters Requiring Attention (MRA). Comments are due 60 days after publication in the Federal Register.
• The proposal would define an “unsafe” or “unsound” practice as, “a practice, act, or failure to act, alone or together with one or more other practices, acts, or failures to act, that (1) is contrary to generally accepted standards of prudent operation; and (2)(i) if continued, is likely to (A) materially harm the financial condition of the institution; or (B) present a material risk of loss to the Deposit Insurance Fund; or (ii) has already materially harmed the financial condition of the institution.”
• Under the proposal, examiners may only issue an MRA for conduct defined under the new “unsafe” or “unsound” definition or if an actual violation of a banking or banking-related law or regulation occurs.
• Examiners will not be allowed to issue an MRA for potential future conditions that are possible but not reasonably foreseeable.
Why it matters: “Unsafe” and “unsound” practices have been undefined under current banking rules and regulations. Establishing a uniform definition provides greater transparency for insured depositories throughout their examination processes.
Go deeper: MRAs may be issued for a wide variety of banking activities, including those related to CRE and Multifamily loan issuance. Having a clearly defined framework for MRA issuance benefits insured depositories and reduces the amount of examiner discretion throughout the examination process.
What’s next: MBA remains supportive of the Trump administration’s efforts to ensure supervisory exams are both fair and transparent, looks forward to collaborating with members on this important issue to formulate a response.
For more information, please contact John Lammle at (202) 557-2789 or Fran Mordi at (202) 557-2860.
MBA Opposed New York Commercial Rent Pricing Bill Sent to Governor
Legislation (S.1163/A.174) in New York opposed by MBA that would prohibit mortgagees from penalizing or defaulting mortgagors for not charging a high enough rent was delivered to Governor Kathy Hochul yesterday. During July, MBA led a coalition, including with the New York Mortgage Bankers Association and local industry associations, in a letter sent to legislative leaders and Governor Hochul opposing the bill and requesting a veto.
• While well intentioned, the bill is overly broad and would introduce significant legal uncertainty, undermine the enforceability of commercial loan contracts, and threaten the availability of credit for income-producing real estate across New York State.
Why it matters: The letter noted several shortcomings, such as it:
• Fails to focus as intended by the sponsor on commercial storefronts and small businesses;
• Conflicts with federal bank regulatory requirements;
• Would reduce credit availability and increase borrowing costs statewide; and,
• Its retroactive application creates unconstitutional risk.
What’s next: MBA is working with the New York MBA to ensure industry opposition is well understood among Governor Hochul’s staff in continuing to seek a veto.
For more information, please contact William Kooper (202) 557-2737
MBA’s CRE Insurance Conclave 2025 Recap
Recently, MBA’s 2025 CRE Insurance Conclave, held in Minneapolis, brought together more than 230 commercial real estate insurance professionals to explore the intricacies of property, casualty, and other insurance markets – including changing availability, premiums, and requirements and operational innovations.
• Key sessions addressed emerging risks, compliance strategies, and the integration of AI and third-party vendors into insurance workflows. The event also featured expert speakers, collaborative panels, and networking, with grounded discussions between lenders, brokers, servicers, and insurers — all navigating the changing insurance landscape.
Why it matters: As insurance becomes more complex and costly, especially for property and liability coverage, the Conclave offers a critical forum for insurance professionals to track market changes, assess strategies, share insights, and explore innovations like AI and vendor integration.
What’s next: Mark your calendar for MBA’s 2026 CRE Insurance Conclave, taking place Oct. 4–6. More details coming soon!
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:
• Exploring Data Centers – Oct. 23
• Overview of Commercial/Multifamily Insurance Compliance – Nov. 5
• Mastering Commercial/Multifamily Lender-Placed Insurance – Nov. 12
• Rethink Everything You Know About Networking: Part II – Nov. 13
• AI Speed Learning for the Mortgage Professional – Nov. 20
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.
