MBA Advocacy Update Sept. 12 2022

Bill Killmer bkillmer@mba.org; Pete Mills petemills@mba.org

On Tuesday, MBA submitted a letter to FHA leadership detailing member recommendations on improving the FHA 203(k) Mortgage Rehabilitation Insurance Program. And on Friday, MBA released a new white paper, A Framework for Considering Office Demand in a Post-Pandemic World, which details relative benefits and costs of remote and in-person work to employees and employers and analyzes the outlook for the office sector and potential impacts to commercial mortgage loan volume and property values.

MBA Submits Letter Detailing FHA 203(k) Rehab Program Improvements

On Tuesday, MBA submitted a letter to Federal Housing Administration leadership detailing member recommendations for improving the FHA 203(k) Mortgage Rehabilitation Insurance Program. Based on feedback from MBA members, the letter highlights specific improvements that would make the program more appealing to borrowers and lenders alike, including increasing the cap on “Limited” 203(k) mortgages, increasing accessibility to consultants, and eliminating second appraisal requirements.

• Why it matters: Improving financing options for rehabilitation of existing housing stock is a key recommendation in the Biden Administration’s Housing Supply Action Plan. With the recommended changes, MBA believes the 203(k) Rehabilitation Mortgage Insurance Program can be expanded to increase affordable housing supply by revitalizing the country’s aging housing stock, particularly for low- and moderate-income households.
• What’s next: MBA will continue to work with FHA leadership on this issue and other FHA programs.

For more information, please contact Darnell Peterson at (202) 557-2922.

MBA White Paper: The Office Market Has Likely Changed Forever. Look to the Labor Market for Clues on How Big the Shift Will Be.   

The ongoing tug of war between employers and employees on the return to the office versus remote work will accelerate as pandemic-related impacts fade, and labor market conditions will play a significant role in how much office space may be needed and how it will be used. This is according to a new white paper released today titled, A Framework for Considering Office Demand in a Post-Pandemic World.

• Why it matters: MBA’s white paper, co-authored by MBA SVP and Chief Economist Mike Fratantoni and Jamie Woodwell, MBA VP of Commercial Real Estate Research, looks at the relative benefits and costs of remote and in-person work to employees and employers. It finds that in the near term, remote work can be just as, if not more, effective than office work in terms of “getting the job done,” while also providing a range of tangible short-term benefits. The findings also reveal, however, that companies and workers rely heavily on in-person interactions to develop workplace capital, helping them thrive over the long term. The pandemic has elevated the weight of the near-term benefits of remote work while reducing the pull of developing workplace capital. The white paper presents two scenarios – a base case where hybrid work trends remain, and an alternative case where a looser labor market and “a fear of missing out” lead to a greater return to in-office work – to analyze the outlook for the office sector and potential impacts to commercial mortgage loan volume and property values.
• According to Woodwell, “The more workers and employers ‘need’ to be in the office, the greater the overall demand – and the lesser the differentiation – there will likely be for space. The more we ‘get’ to be in the office with hybrid trends sticking, the more users will pay up for properties that maximize that time, while also deciding to shed space in properties that do not meet these preferences. Ultimately, in either scenario, it is unlikely that the office market will ever return to its pre-pandemic shape, size, and dimensions.”

For more information, please contactMike Fratantoni at (202) 557-2935 and Jamie Woodwell at (202) 557-2936.

Upcoming MBA Education Webinars on Critical Industry Issues

MBA Education continues to deliver timely programming that covers the spectrum of challenges, obstacles and solutions pertaining to our industry. Below, please see a list of upcoming webinars – which are complimentary to MBA members:

• CRE Mortgage Risk and What the Pandemic Taught Us – September 20
• State of Non-QM Lending & What You Need to Know Now – September 27
• Empowering Mortgage Servicers with Proactive KPIs – September 29
• Managing Liquidity and Operational Efficiency in a Fiercely Competitive Market – October 4
• Marijuana and Real Estate in 2022: What Every CRE Professional Should Know – October 19

MBA members can register for any of the above events and view recent webinar recordings. For more information, please contact David Upbin at (202) 557-2931.