CREF Policy Update: HUD Updates Middle Income Housing Mortgagee Letter
HUD Updates Middle Income Housing Mortgagee Letter
Last Thursday, the Department of Housing and Urban Development (HUD) superseded its previous Mortgagee Letter (ML 2025-2) to create new criteria and standards for middle-income rental housing. For 221(d)(4) projects that are participating in a state or local middle-income program, HUD will allow a more favorable Loan-to-Cost (LTC) ratio and lower Debt Service Coverage Ratio (DSCR).
Why it matters: MBA welcomes these changes and has been advocating for them as a way to increase the development of more workforce housing.
What’s next: The ML is effective immediately for any application that has not reached initial endorsement. MBA will continue to work with HUD on better efficiencies and overall improvements to its programs.
For more information, please contact Megan Booth at (202) 557-2740.
TRIA Reauthorization Overwhelmingly Advances Through Key House Panel
During its scheduled markup last week, the House Financial Services Committee overwhelmingly passed legislation, H.R. 7128, the TRIA Program Reauthorization Act of 2026, by a bipartisan margin of 51-2. The bill extends the terrorism risk insurance program for another seven years prior to its expiration at the end of 2027.
• Importantly, the bill also includes modest reforms that raise the program’s certification “trigger” loss threshold from $5 million to $10 million and adds a 90-day “shot clock” for Treasury certification of domestic acts of terrorism. Three “messaging” amendments to the bill’s base text were offered and defeated before a final vote on H.R. 7128 was taken.
Go deeper: MBA is a steering committee member of the Coalition to Insure Against Terrorism (CIAT), which includes a broad base on terrorism insurance consumers across the American economy. That coalition sent a letter to committee members prior to the markup urging the panel to pass this important legislation – and expedite its House floor consideration.
What’s next: This House action is an early indicator that Congress is committed to passing a long-term TRIA reauthorization package well before the program’s expiration next year. Parallel Senate action on TRIA has yet to be scheduled. MBA and its coalition partners will remain engaged with lawmakers in both chambers to continue to advance action on TRIA as expeditiously as possible.
For more information, please contact Rachel Kelley at (202) 557-2816
HUD Secretary Turner Testifies Before Full House Financial Services Committee
Last Wednesday, the full House Financial Services Committee (HFSC) heard from HUD Secretary Scott Turner for the first time since his Senate confirmation last year.
• The hearing examined the Trump administration’s ongoing aggressive push on housing affordability, including the pursuit of regulatory rollbacks, greater agency accountability, and potential changes to core housing and homelessness programs—issues that directly affect development feasibility, operating costs, financing certainty, and long-term housing investment decisions.
• Find a full summary of the hearing here and watch the hearing here.
Go deeper: Secretary Turner committed to lawmakers from both sides of the political aisle to provide greater detail in response to questions posed on topics ranging from the need to streamline FHA program processes, to re-evaluating costly regulatory overlays (e.g., environmental, labor, and procurement requirements), and pursuing needed public housing authority-related reforms.
Why it matters: The hearing reinforced Congress’s oversight role shaping the future of housing policy through oversight of HUD’s staffing, enforcement posture, and program structure.
What’s next: MBA will remain engaged with FHA, Ginnie Mae, and the Secretary’s office in pursuit of its HUD-related housing program policy priorities.
For more information, please contact Rachel Kelley at (202) 557-2816 and Madisyn Rhone at (202) 557-2741.
House Oversight Subcommittee Examines Housing Affordability
Last week, the House Oversight and Government Reform Subcommittee on Economic Growth, Energy Policy, and Regulatory Affairs held a hearing titled, “Housing Affordability: Saving the American Dream,” to examine the drivers of rising housing costs. The hearing highlighted a partisan divide, with Chairman Eric Burlison (R-MO) citing government regulation and inflation as primary causes, while Ranking Member Maxwell Frost (D-FL) and other Democrats focused on the role of institutional investors and corporate practices.
• The hearing summary can be found here.
Why it matters: The hearing underscores policy approaches that will influence future housing legislation discussions, including proposals to increase housing supply through regulatory and tax reforms versus efforts to limit institutional ownership of single-family homes. These debates have direct implications for housing affordability, market stability, and access to homeownership for first-time and low- to moderate-income borrowers.
What’s next: MBA will continue to engage with both parties to advance balanced, supply-focused solutions that expand housing availability while supporting sustainable homeownership.
For more information, please contact Rachel Kelley at (202) 557-2816 and Madisyn Rhone at (202) 557-2741.
Servicer Council Recap
Last week, MBA hosted a Servicer Council meeting featuring, Corey Babarovich (Strategic Asset Services) and Joe Marino (Varro), who led a focused discussion on current inspection challenges across the servicing landscape. Their insights provided attendees with practical visibility into pain points emerging across markets and prompted a collaborative exchange on navigating these constraints.
Why it matters: As inspection complexities continue to increase, especially in a market defined by heightened risk sensitivity, servicers must adapt quickly to maintain compliance, data quality, and asset‑level visibility. The perspectives shared by Babarovich and Marino underscore the importance of aligning processes, strengthening communications with borrowers, and anticipating resource/technology needs as inspection volume and scrutiny grow. These insights help inform best practices and ensure the Servicer Council remains a platform for surfacing real‑time operational challenges that affect the entire servicing lifecycle.
What’s next: If you or a colleague would like to be added to the Servicer Council distribution list and included in future sessions, email Jacky Salazar to be added.
For more information, please contact Jacky Salazar at (202) 557-2746.
New York Proposed Budget Released; Governor Reiterates Her “Let Them Build” Call to Action
Last Tuesday, New York Governor Kathy Hochul released her proposed FY 2027 state budget.
• The Governor highlighted her administration’s achievements, including the state’s $25 billion affordable housing plan to create or preserve 100,000 affordable homes statewide. According to the budget, more than 77,000 homes have already been delivered or preserved. To further advance these efforts, the proposal includes an additional $250 million in capital funding to accelerate the construction of thousands of new affordable homes.
Dig deeper: The proposed budget would also invest in key housing and homeownership initiatives, including:
• $100 million for the MOVE-IN NY homeownership program, which leverages innovative prefabricated technologies to build new homes faster and at a lower cost;
• $50 million for the Resilient and Ready program to help homeowners recover from and prepare for extreme weather;
• $5 million for the Manufactured Home Park Revolving Loan Fund to finance infrastructure upgrades and improvements for residents;
• $50 million for the Housing Access Voucher Pilot Program (HAVPP), continuing the four-year pilot to provide rental assistance for individuals and families who are homeless or at risk of losing housing;
• $40 million for the Homeowner Protection Program (HOPP) to fund legal assistance and housing counseling that help preserve homeownership and prevent foreclosure;
• $20 million for lead abatement initiatives targeting high-risk areas outside New York City; and,
• $153 million for the Homeless Housing and Assistance Program (HHAP) to provide capital funding for supportive housing.
What’s next: The Senate and Assembly will now hold budget hearings and develop their respective responses before the final budget is due on April 1.
For more information, please contact William Kooper at (202) 557-2737 or Liz Facemire at (202) 557-2870.
MAA’s Next Quarterly Webinar: Jan. 29
With MBA’s National Advocacy Conference just a few months away, the Mortgage Action Alliance’s (MAA) upcoming webinar will shine a spotlight on this premier advocacy event, scheduled for April 14–15.
• Join MBA’s Legislative and Political Affairs Team to explore how national-level engagement strengthens state advocacy efforts and amplifies the industry’s collective voice. This quarterly webinar will feature a timely briefing on the year-end congressional closeout, an overview of the Q1 legislative agenda, and a look at MBA’s key policy priorities in this pivotal mid-term election year.
Why it matters: As our nation marks its 250th birthday, there’s no better moment than now to join hundreds of industry advocates and claim your seat at the table where meaningful change takes shape!
What’s next: Register for Part II of MBA’s State and Federal Advocacy Webinar & Fly-In Series, hosted by the California Mortgage Bankers Association, on Wednesday, January 21, at noon PT/3:00 PM ET. Part II will highlight the West and Midwest regions—but the session is open to MAA and MBA members nationwide.
For more information, please contact maa@mba.org or Margie Ehrhardt at (202) 557-2708.
Upcoming MBA CREF Council and Committee Meetings
MBA’s CREF Councils and Committees are a key way to connect to everything MBA has to offer around policy, advocacy, market intelligence and research, education, and networking. Councils and Committees are built around specific capital sources and serve as an opportunity for you to join other commercial real estate finance professionals to hear from experts, discuss opportunities and challenges, and connect with peers.
Upcoming virtual meetings include:
• All Council In-person Meet-up: Feb. 8
• Structured Finance Council (in-person): Feb. 10
• Commercial Council: Feb. 24
• FHA Council: March 10
• Servicer Council: March 19
• Bank Council: March 25
For more information, click on the links above and/or contact Kelli Burke at (202) 557- 2742.
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:
• Internal CMF Benchmarking Requirements – Feb. 18
• Builder’s Risk Insurance Essentials for Commercial & Multifamily Properties – March 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.
