Advocacy Update: Government Shutdown Latest; Fannie Mae Updates on Construction Lending, Rep and Warrant Relief; MBA Letters to FHFA on Housing Goals and Strategic Plan
Federal Government Shutdown Now Longest Ever, Despite Bipartisan Senate Negotiations
As expected, the Senate on Tuesday failed for the 14th time to advance the House-passed “clean” funding bill that would end the government shutdown.
• Some signs of a potential end to the longest shutdown in history were made last week, with a bipartisan group of lawmakers attempting to negotiate a Senate solution to end the funding stalemate. However, energized by their party’s success in Tuesday’s elections, several Democratic senators are intensifying pressure to hold firm against Republicans until they secure a meaningful win on health care.
• Read MBA’s member guide that outlines the potential impacts to single-family and multifamily government lending programs.
Why it matters: Hundreds of thousands of federal employees have missed paychecks since October. Moreover, the shutdown has necessitated furloughs and has been used to justify Reductions in Force (RIFs) of many federal employees, as well as significant curtailment of certain operations at key agencies such as HUD, Treasury, the VA, and USDA.
• National Flood Insurance Program (NFIP) authorities remain expired, with the White House and GOP congressional leaders still declining to make a deal to reauthorize the program prior to passage of a “clean” Continuing Resolution (CR). To avoid long-term disruptions to the housing and flood insurance markets, MBA continues to advocate for an immediate restoration of the program’s authority.
What’s next: MBA remains in contact with lawmakers and regulators and encourages members to share any real-time operational impacts. The longer this shutdown lasts – particularly with extended federal agency furloughs and missed paychecks – the more likely it will lead to significant disruption for the industry and its customers and end users.
• To that end, MBA issued a press statement from CEO Bob Broeksmit, CMB, calling for lawmakers to bridge their differences and end the shutdown as quickly as possible.
For more information, please contact Bill Killmer at (202) 557-2736 or Pete Mills at (202) 557-2858.
Fannie Mae Expands Rep & Warrant Relief, Modernizes Construction Loan Policies
Last week, Fannie Mae released Selling Guide Announcement SEL-2025-09, which includes the following significant policy enhancements regarding representation and warranty (rep & warrant) relief, single-close construction-to-permanent (C2P) loans, and credit score requirements in Desktop Underwriter (DU).
• Rep & Warrant Relief: DU-approved loans will now receive enforcement relief related to undisclosed non-mortgage debt—a long-standing concern for lenders—if specific eligibility criteria are met.
• Extended Credit Doc Validity: For single-close C2P loans, credit documents are now valid for up to 18 months at the time of modification/conversion, easing disruptions caused by mid-construction requalification.
• DU Credit Score Floor Eliminated: DU will no longer apply a minimum credit score threshold for determining loan eligibility, instead relying on holistic risk assessment.
Why it matters: These updates mark a significant step forward in reducing lender risk, simplifying operations, and expanding access to credit in underserved markets.
“MBA specifically advocated for these changes, and we applaud Fannie Mae for listening to our members’ feedback,” said Pete Mills, MBA’s Senior Vice President of Residential Policy and Strategic Industry Engagement. “These are common-sense improvements that will help lenders better serve borrowers navigating the complexities of new home construction. We also welcome Fannie Mae’s ongoing efforts to improve rep and warranty certainty.”
Go deeper: The 18-month credit document policy is especially impactful for lenders facing municipal permitting backlogs, supply chain delays, and inspection holdups. These changes better reflect today’s construction cycles and reduce the risk of borrower fallout. MBA’s Construction Lending Working Group was instrumental in shaping these reforms, sharing detailed operational pain points with the GSEs and offering pragmatic solutions that are now reflected in Fannie Mae’s Selling Guide. Read more on the benefits and market impact on construction lending here.
• The rep and warrant relief for certain undisclosed debts is a critical risk management update, providing lenders with greater confidence in DU-based approvals and reducing buyback anxiety associated with debt verification post-closing. Further, as MBA continues to explore credit score modernization and a shift away from a mandatory tri-merge requirement, this could address lender concerns regarding debts not included in selected credit reports.
What’s next: While the updates to C2P loans are effective immediately, the elimination of the minimum credit score and rep and warrant relief for certain undisclosed debts will be effective after November 15th. MBA will continue to engage Fannie Mae, Freddie Mac, and the Federal Housing Finance Agency (FHFA) to promote further reforms—particularly on and renovation loan flexibility—while supporting alignment across GSEs and consistent lender execution.
For more information, please contact John McMullen at (202) 557-2706 or Sasha Hewlett at (202) 557-2805.
MBA Submits Comments on FHFA Proposed GSE Housing Goals and Strategic Plan
Last week, MBA submitted comments on both FHFA’s proposed Enterprise Housing Goals for 2025–2027 and its proposed Strategic Plan for Fiscal Years 2026-2030. The housing goals help drive the Fannie Mae and Freddie Mac’s (GSEs) efforts to achieve their mission of supporting liquidity for affordable homeownership and the Strategic Plan provides the public and interested stakeholders with a valuable opportunity to gain insight on the activities and priorities of FHFA in the coming years.
• MBA’s recommendations for the housing goals included lowering the single-family, low- income refinance goal and retaining the recently implemented measurement buffers. MBA also urged the GSEs to focus on underwriting improvements – such as cash flow and rental payment history – to safely and sustainably expand the population of potential goals eligible borrowers.
• In response to the draft Strategic Plan, MBA highlighted areas of focus where MBA has been engaged and also stressed the need to ensure the plan considers the longer-term goal of carefully ending the GSEs’ conservatorship without disrupting the market.
Why it matters: MBA has serious concerns that the single-family low-income refinance goal may not be attainable due to its sensitivity to various market forces. The Trump administration has stressed its desire to lower interest rates, which would spur refinance activity, driving up the denominator for the low-income refinance goal calculation and driving the achieved percentage lower. Retaining the measurement buffers would help mitigate market distortions whenever goal levels and market production are misaligned due to unforeseen economic conditions.
Go deeper: For the Strategic Plan, MBA recommended a heightened focus on administrative efforts to prepare for the eventual end of the GSEs’ conservatorships, such as continuing to build strong bank-like capital reserves via the Enterprise Regulatory Capital Framework (ERCF), which continues to provide incentives that encourage the Enterprises to distribute risk through mortgage insurance and robust credit risk transfer (CRT) programs, and ensuring FHFA’s powers as regulator are sufficient to regulate and establish market conduct standards for the Enterprises.
What’s next: MBA will await the finalization of both the housing goals and the strategic plan and will continue to engage with FHFA on this and other critical housing issues.
For more information, please contact Sasha Hewlett at (202) 557-2805.
Fannie Mae and Freddie Mac Unveil MBA-Supported AUS Enhancement to Improve Adoption of Positive Rental Payment History
In April 2025, MBA published its Leveraging Rental Payment History to Approve More First Time Homebuyers white paper, which urged the GSEs to program their Automated Underwriting Systems (AUS) to identify transactions where the inclusion of the borrower’s rent payment history is the deciding factor in the approval.
• In a significant win for the industry and potential borrowers, the GSEs unveiled this AUS enhancement during an MBA webinar this past Thursday. Additionally, both GSEs committed to providing data on the aggregate number of borrowers whose risk classes can be upgraded because of documenting positive rent payment history, which is another key request in MBA’s white paper.
• You can view the webinar recording here.
Why it matters: As housing affordability remains constrained, lenders have looked to new approaches to help first-time homebuyers achieve the American Dream. A mortgage underwriter’s ability to know a prospective homeowner’s history handling a rent payment can be a strong indicator of a borrower’s ability to sustain a monthly mortgage payment. The GSEs’ AUS enhancement provides greater transparency that will help optimize the process for lenders and should advance adoption of positive rent payment history.
What’s next: MBA will share relevant information from the GSEs with its policy committees and business segment networks. MBA encourages members to share the webinar recording with their organization’s production and underwriting leaders. Furthermore, members are encouraged to register for Part II and Part III of the Leveraging Rental Payment History webinar series.
For more information, please contact Anthony Siller at 202-557-2944.
Mortgage Call Report Version 7 XML Upload Schema Now Available; Office Hours to Come
MBA and the Conference of State Bank Supervisors (CSBS) posted the Mortgage Call Report Version 7 (MCRV7) XML file for licensees to begin building compliance. MCRV7 is required to be filed starting first quarter 2026 and due May 15, 2026. MCRV7 includes new servicing fields for MCR filers to provide, including foreclosures, forbearances, as well as the size and composition of the servicer’s portfolio.
Go deeper: The full MCRV7 changes are outlined in the original proposal and response to comments. CSBS has posted the files under the NMLS Reporting Files resource page (here), or you may access the important links below:
- MCRV7 Field Definitions
- MCRV7 Sample (excel)
- MCRV7 XML Upload Schema (xsd)
Why this matters: MBA commented on the proposed changes on behalf of its members and has raised concerns about the timing of the XML release. Additionally, MBA seeks to align the MCR with the Mortgage Bankers Financial Reporting Form (MBFRF) and reduce duplicative state-level reporting functions by utilizing the State Specific Supplemental Form created by MCR Version 6.
What’s next: Considering the delayed release of the MCRV7 XML, MBA has urged CSBS and the American Association of Residential Mortgage Regulators to encourage their state regulator members to offer Q1 2026 grace periods for the first filing of MCRV7.
• MBA has also requested clarification on the office hours mentioned in the post providing the MCRV7 XML. The office hours are expected to be scheduled from November to April, but further details on the dates, times, and sign-up process have not been announced.
For more information, please contact William Kooper at (202) 557-2737 or Liz Facemire at (202) 557-2870.
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:
• Simplify, Automate and Elevate through AIM with LPA – Nov. 12
• Leveraging Rental Payment History – Part II: Industry Practices and Consumer Experience Improvements – Nov. 13
• Rethink Everything You Know About Networking: Part II – Nov. 13
• Deep Dive into Mortgage Delinquencies: Early Warning Signs – Nov. 13
• Using Quality Assurance, Control and Fraud Prevention to Strengthen Loan Operations – Nov. 17
• Breaking the 15-Minute Barrier: The First Machine-Only Income Decisioning in Mortgage – November 19
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.
