MBA Advocacy Update: FHFA Announces Conforming Loan Limits for 2025; Relevant Cabinet Nominees
FHFA Announces Conforming Loan Limits for 2025
Last week, the Federal Housing Finance Agency (FHFA) published the 2025 maximum conforming loan limits for mortgages eligible to be acquired by Fannie Mae and Freddie Mac (the GSEs). The limits are calculated by FHFA according to a formula established by Congress in the Housing and Economic Recovery Act of 2008 (HERA).
Why it matters: The baseline maximum conforming loan limit for one-unit properties will increase 5.2% from $766,550 to $806,500. The maximum conforming loan limit for one-unit properties in high-cost areas will increase to $1,209,750–or 150% of the baseline limit, which is the “ceiling” set by Congress for high-cost area loan limits.
What’s next: MBA will continue to engage with FHFA and the GSEs on this and other critically important housing policy issues.
For more information, please contact Sasha Hewlett at (202) 557-2805.
President-elect Donald Trump Nominates Scott Turner as HUD Secretary; Scott Bessent as Treasury Secretary
President-elect Donald Trump recently announced the nomination of Scott Turner to serve as Secretary of the Department of Housing and Urban Development (HUD), and Scott Bessent as Treasury Secretary.
• Turner is a former professional football player and served as a Texas state representative from 2013-2017. He also served as Executive Director of the White House Opportunity and Revitalization Council in the first Trump administration, where, alongside former HUD Secretary Ben Carson, he was instrumental in implementing Opportunity Zones, an economic development incentive tool that allows people to invest in distressed communities.
• Bessent is a well-known Wall Street veteran who is the founder of hedge fund Key Square Capital Management. Prior to that, he served for many years as Chief Investment Officer at Soros Fund Management.
What they’re saying: In a press statement on Turner’s nomination, MBA President and CEO Bob Broeksmit, CMB, said, “On behalf of MBA, I congratulate Scott Turner on being nominated to serve as the next HUD Secretary. Pursuing policies and initiatives that help solve our nation’s housing affordability crisis for owners and renters should be a top policy priority under the Trump administration.”
What’s next: The Senate Banking, Housing, and Urban Affairs Committee will schedule and hold a confirmation hearing for Turner in early 2025. Scott Bessent will testify before both the Senate Banking Committee and the Senate Finance Committee, which shares jurisdiction for confirming the Treasury Secretary. MBA will push for a speedy confirmation process and is committed to working with the incoming administration and lawmakers on both sides of the aisle on all issues pertinent to real estate finance.
For more information, please contact Pete Mills at (202) 557- 2878 or Bill Killmer at (202) 557- 2736.
FHFA Announces GSEs’ 2025 – 2027 Duty to Serve and Equitable Housing Finance Plans
Last week, the FHFA announced the release of Fannie Mae’s and Freddie Mac’s (the GSEs) Duty to Serve and Equitable Housing Finance Plans for 2025-2027. These plans, required under two separate regulatory frameworks, discuss the GSEs initiatives to advance equitable access to affordable and sustainable housing in underserved markets and communities.
• The 2025-2027 DTS plans – which are required by statute — expand liquidity to serve nearly 690,000 renter households and over 90,000 homeowner households and for the first time the plans include strategies to help communities across the entire rural market. The DTS plans also enhance their support for manufactured housing.
• The 2025-2027 EHFPs – established by FHFA in 2021 — outline the GSEs commitment to continue supporting first-time and first-generation homebuyers, expanding the use of rental payment history and cash flow analysis in their underwriting systems, promoting awareness of down payment assistance programs, and enabling tenants to strengthen credit through reporting of on-time rent payments to the credit bureaus.
Why it matters: The Enterprises’ final DTS Plans and EHFPs were finalized following FHFA’s solicitation of extensive public input. FHFA Director Sandra Thompson noted that “the new plans underscore the commitment of FHFA and the GSEs to ensure that the housing finance system responsibly supports borrowers and renters across the country” and emphasized the need to implement and scale up innovative ideas that address liquidity needs in underserved markets facing access and affordability challenges.
What’s next: Links to the plans can be found on the DTS and EHFP websites. FHFA will work with the GSEs, lenders, and other housing industry stakeholders to further develop and execute the ideas contained in the plans and MBA will continue to partner with FHFA and the GSEs on this and other critically important housing issues.
For more information, please contact Sasha Hewlett at (202) 557-2805.
FHA Proposes Permanent Loss Mitigation Waterfall
Last Monday, the Federal Housing Administration (FHA) proposed its highly anticipated permanent loss mitigation waterfall to the Single-Family Drafting Table for review and comment. A permanent waterfall for FHA has been a top priority for MBA’s Future of Loss Mitigation workstream.
Why it matters: As proposed, FHA seeks to implement the lessons learned from the COVID-19 pandemic before the expiration of its temporary guidance in April 2025. While MBA will continue to review the details of FHA’s extensive proposal, FHA’s proposal appears to reflect much of the feedback MBA delivered through multiple rounds, including our comprehensive initial March 2024 letter. Guidance topics include:
• Updates to repayment and forbearance policies;
• Changes to FHA’s Home Retention Options;
• Home retention guardrails to ensure borrowers can sustain their monthly mortgage payments;
• Changes to FHA’s Disposition Options to include an equity saver sale; and
• Consolidated SFDMS reporting.
What’s next: The MBA team will prepare a summary for the Loan Administration Committee. Comments are due Monday, Dec. 23, 2024.
For more information, please contact Brendan Kelleher at (202) 557-2779.
Ginnie Mae Announces Its Final Term Sheet for HMBS 2.0
Last Monday, Ginnie Mae announced its final term sheet for HECM Mortgage Backed Securities (HMBS) 2.0, a newly proposed Home Equity Conversion Mortgage (HECM) securitization program. This final term sheet reflects responses to industry comments following the release of the draft term sheet in June 2024. Visit Ginnie Mae’s Housing Analysis and Policy Spotlight to read the full announcement and summary of key elements of the final term sheet.
Why it matters: The purpose of HMBS 2.0 is to facilitate greater liquidity in the HECM market, specifically aiding the liquidity of HECMs bought from traditional HMBS pools that cannot be immediately assigned for an insurance claim to the Federal Housing Administration (FHA).
Go deeper: In July, MBA and National Reverse Mortgage Lenders Association (NRMLA) submitted a joint comment letter to Ginnie Mae outlining key recommendations to streamline processes, reduce costs, and ensure operational efficiency. In response, Ginnie Mae adopted partial changes to their proposal including revising a key requirement for Initial Certification and Recertification of HECM loans specifically pooled under the HMBS 2.0 Program.
• Additionally, Ginnie Mae adjusted a requirement related to the Maximum Adjusted Property Value Ratio (MAPVR) and clarified the MAPVR determined at the time of initial HMBS 2.0 pooling will be valid for subsequent HMBS participations.
What’s next: MBA will review the final term sheet alongside Ginnie Mae’s responses to industry feedback and collaborate with our Reverse Mortgage Advisory Group and the incoming administration to ensure these policies are implemented. Additionally, MBA will explore further strategies to alleviate liquidity stress for HECM issuers.
For more information, please contact Anthony Siller at (202)-557-2944.
California Proposes Rules to Regulate Auto Decision Tech
Recently, the California Privacy Protection Agency (CPPA) released their proposed rules on cybersecurity audits, risk assessments, and automated decision-making technology (ADMT). The ADMT proposed rules follow the trends MBA has been tracking relating to regulation of artificial intelligence (ADMT).
Go deeper: In the proposal, the definition of an ADMT includes technology that could process personal information and “generate a score about a consumer that the human reviewer uses as a primary factor to make a significant decision about them.” This definition would include credit scoring models and automated underwriting systems as those are primary factors in a decision. Further, the rules include certain consumer rights like the right to access, or understand how the ADMT works, and the right to opt-out of ADMTs.
Why it matters: In recent years more states have attempted to enact legislation aiming at regulating AI, this year Colorado became the first state to enact with SB 24-205, Consumer Protections for Artificial Intelligence. Under majority of these proposed and Colorado’s law, technology like automated underwriting systems and credit scoring models would fall under the definitions in these proposals.
• However, the mortgage industry has multiple laws and regulations to ensure safety and fairness in lending with technology that has been deployed in the mortgage process for decades. Regulating these core systems and including opt-outs for consumers will require lenders to establish duplicative manual processes, and the GSEs, FHA and VA to accept a higher volume of such loans – both of which will increase the cost of credit for consumers.
What’s next: MBA continues to work with both Colorado Mortgage Lenders Association on amendments to the Colorado law in the next session. Now, MBA will assist California Mortgage Bankers Association with their response to the CPPA proposed rules on ADMTs.
For more information, please visit the MBA resource center mba.org/stateai or contact William Kooper (202) 557-2737 or Liz Facemire (202) 557-2870.
REGISTER: MAA Post-Election Webinar on Dec. 4
On Wednesday, December 4, from 3:00 PM – 4:00 PM ET, MBA’s Legislative and Political Affairs team will host a Post-Election Briefing – alongside a few of our MBA staff subject matter expert colleagues! You – and over 1,000 other registrants – will have the opportunity to hear this combined MBA team reflect on the election outcomes and what they mean in the coming years for our industry on both the regulatory and legislative policy fronts. Register now!
Why it matters: MAA’s Quarterly Webinars cover a full range of key policy issues that impact the real estate finance industry – and allow active MAA members to engage in advocacy year-round.
What’s next: Attend MBA’s National Advocacy Conference (NAC) on April 8 and 9, 2025, at the Capital Hilton in Washington, D.C. Join hundreds of industry advocates to meet with and educate policymakers on issues impacting your businesses and customers.
Register by Feb. 24, 2025, to receive the early bird rate. MBA offers special rates for members of MBA’s young professionals network (mPact), the Certified Mortgage Banker (CMB) Society, and group rates for MBA member companies as well.
For more information, please contact maa@mba.org or Margie Ehrhardt at (202) 557-2708.
Upcoming MBA Education Webinars on Critical Industry Issues
MBA Education continues to deliver timely 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:
• Master the Art of Pricing and Rate Lock Strategies – Dec. 10
• High Performance Negotiations – Lessons and Strategies – Dec. 17
• New Entrants in the Mortgage Industry and Their Winning Strategies – Jan. 16
• Fundamentals of Commercial Insurance Issues and Problems – Jan. 28
• CREF Career Conversations: Insights from Industry Leaders – Jan. 28
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.
