Advocacy Update: Senate Advances Latest Consensus Version of Housing Package; Basel III Recommendations; Federal Reserve Keeps Rates Unchanged

MBA Recommends Improvements to Federal Banking Agencies’ Basel III Re-proposal

MBA Thursday morning submitted its comment letter (and joined other coalition letters) in response to the Banking Agencies’ (Federal Reserve, Office of the Comptroller of the Currency (OCC), and Federal Deposit Insurance Corporation (FDIC) Basel III Endgame re-proposal on bank capital requirements.

• The three-part proposal was released on March 19, 2026.  

Why it matters: MBA’s comment letter praised the proposed rules for the important changes they would make to current capital requirements that discourage banks’ support for real estate finance markets. To ensure the rules hit their intended mark, MBA urged the Agencies to further tailor the Basel III capital framework to the realities of the U.S. financial system rather than adhering to international standards that do not fully reflect the structure and risk profile of U.S. mortgage markets.

• The letter highlights that certain aspects of the proposal, while improved from the 2023 proposed rule, still overstates the risks of key mortgage-related assets and activities, potentially undermining the Agencies’ goal of removing barriers to banks’ support for the mortgage market as lenders, servicers, and liquidity providers to nonbanks. 

MBA’s recommended changes include:

• Mortgage servicing assets (MSAs): MBA recommends reducing the proposed 250% risk weight to no more than 100%, citing MSAs’ strong historical performance and lower realized losses.
• Warehouse lending: MBA urges regulators to modify provisions that would increase capital requirements on unused portions of warehouse facilities, and reduce the capital requirements on the drawn portion to match the risk weighting of the underlying collateral. 
• Residential mortgages and private mortgage insurance (PMI): MBA supports the proposed loan-to-value (LTV)-based framework but calls for greater recognition of the risk-reducing benefits of PMI when determining capital requirements.
• Commercial real estate (CRE): MBA recommends broader adoption of a more granular, risk-sensitive CRE framework and lowering the maximum risk weight for high-LTV CRE loans so secured real estate lending is not treated more harshly than unsecured corporate credit.
• Securitization: MBA urges revisions that would reduce unnecessary capital burdens on certain securitization exposures, including lowering the risk weight on GSE-backed securities to recognize the U.S. Treasury backstop. 

Separately, MBA joined two joint-trades letters advocating for lower bank capital risk weights on Low-Income Housing Tax Credits (LIHTC) (here) and New Markets Tax Credits (NMTC) projects.

Go deeper: Overall, MBA believes the re-proposal reflects significant progress for MBA and its single-family and commercial real estate finance members after three years of sustained advocacy for a better-calibrated capital framework for mortgage assets after the very flawed initial proposal was released in July 2023.

• MBA’s push for changes has come in many forms, including numerous comment letters, regulatory meetings, speeches, and MBA President and CEO Bob Broeksmit’s, CMB, April 2026 testimony before the House Finance Services Committee and a September 2023 testimony before the House Financial Services Subcommittee on Financial Institutions and Monetary Policy.
• Earlier this year, MBA submitted a Statement for the Record supporting the re-proposal (and offering recommendations) ahead of a Senate Banking Committee hearing with the prudential bank regulators, led a broad joint trades letter with recommendations, and sent a letter urging the banking agencies to reduce risk weighting for warehouse lines.
• Overall, MBA has long emphasized that banks play a critical role in mortgage lending and servicing – both directly and through financing IMBs – as well as in the commercial real estate market, and that current capital rules limit their ability to fully participate in and support these markets.

What’s next: MBA appreciates the significant contributions of its single-family and commercial/multifamily members, especially those who participated in the Basel III Working Group, whose expertise and feedback informed this comment letter. MBA looks forward to continued engagement with the Agencies as they work to finalize the Basel III capital framework, likely later this year or in early 2027.

For more information, please contact Fran Mordi at (202) 577-2860, and John Lammle at (202) 557-2789.

Senate Advances Latest Consensus Version of Housing Package

Thursday, the U.S. Senate took an important procedural step to advance the latest revised version of the 21st Century ROAD to Housing Act (H.R. 6644, as amended) by a large bipartisan vote, setting the stage for final Senate passage as soon as Monday. Read the full bill here and a summary here.

• Earlier in the week, the leaders of the Senate Banking and House Financial Services Committees announced a bicameral agreement on this latest iteration of the bill following the Senate and House passing their own differing versions over the past few months.
• The Senate’s revised package preserves numerous hard-fought MBA priorities secured during negotiations led by Senate Banking and House Financial Services Committees leadership and a bipartisan group of lawmakers. Specifically, the legislation maintains fixes to prior concerns related to , preserving important USDA Rural Housing Service reforms, codifying the GSEs’ reconsideration of value appraisal processes without increasing lender liability, and excluding a proposed expansion of inefficient “first look” requirements for servicers on sales of foreclosed properties.
• The bill also preserves industry concerns around a provision that would have required disposition within seven years of newly constructed “single-family” build-to-rent homes acquired by large institutional investors. Several members of Congress are committed to working with MBA and the Treasury Department to clarify the intent around concerns regarding existing “horizontal multifamily.”

Why it matters: MBA extends its deep appreciation to the Mortgage Action Alliance (MAA) and the grassroots advocates who responded to repeated Calls to Action over the last several months that helped educate lawmakers in both chambers and build support for a substantially better package. MBA’s legislative and political affairs team, reinforced by multiple letters sent independently and with housing partners, led a sustained lobbying effort to ensure the bill was stripped of previous unintended consequences.

• In a letter from MBA Chief Lobbyist and SVP for Legislative and Political Affairs Bill Killmer ahead of today’s procedural vote, MBA indicated its support for the overall proposal, providing commentary on key sections of the package.

What’s next: MBA remains engaged with key Senate and House leaders as the legislation advances toward a final floor vote and eventual enactment. Following the final Senate vote as early as Monday, House consideration could also occur as early as next week, clearing the measure for President Trump’s signature.

For more information, please contact Rachel Kelley at (202) 557-2816, Madisyn Rhone at (202) 557-2741, George Rogers at (202) 557-2797, or Jeremy Green at (202) 557-2849.

Federal Reserve Keeps Rates Unchanged

The Federal Reserve held the federal funds rate at a target range of 3.50-3.75% on Wednesday.

Why it matters: The Committee noted that, “Economic activity is expanding at a solid pace despite elevated uncertainty that owes, in part, to the conflict in the Middle East. Productivity growth and capital investment are strong. Job gains have kept pace with the workforce, and the unemployment rate has changed little.”

What they are saying: “The overall tone is more hawkish than many had anticipated, and the immediate market reaction was an increase in rates. MBA’s forecast is for mortgage rates to average about 6.5% over the forecast horizon, given the resilience in the broader economy and job market, the likely stance of monetary policy given persistent inflation, and ongoing fiscal pressures, which will keep upward pressure on longer-term debt,” said Mike Fratantoni, MBA’s SVP and Chief Economist.

Read more of Fratantoni’s commentary here.

For more information, please contact Mike Fratantoni at (202) 557-2935.

FHFA Issues 2025 Annual Report to Congress

Last Monday, the Federal Housing Finance Agency (FHFA) released its 2025 Report to Congress, which provides required information on the annual activities of Fannie Mae and Freddie Mac (the GSEs) and the Federal Home Loan Banks (FHLBs).

Why it matters: The report includes updates on various items, including but not limited to the financial condition of the regulated entities, mission-related activities, new products and activities, and conservatorship-related activities.

• This year’s report also contained legislative recommendations, including allowing FHFA to have civil enforcement authority to better address mortgage market fraud, permitting FHFA to amend certain capital-related statutory definitions, and granting FHFA examination authority over third-party service providers to the GSEs.

Go deeper: The recommendations related to FHFA examination authority over third-party service providers is a topic on which MBA remains heavily engaged, consistently communicating that it would be highly inappropriate for any such reforms to grant FHFA this authority over lenders and servicers.

What’s next: MBA will continue to partner with FHFA and the GSEs on the critical housing finance issues included in the 2025 report.

For more information, please contact Sasha Hewlett at (202) 557-2805.

MBA Participates in House Briefing on Lowering Housing Costs

Rachel Kelley, MBA’s Vice President of Legislative Affairs, recently participated in a House briefing for Members of Congress and their staffers alongside representatives from other housing industry trade groups. The bipartisan briefing was hosted by Representatives Young Kim (R-CA) and Johnny Olszewski (D-MD).

Why it matters: The panel of industry advocates discussed the nation’s housing affordability and supply challenges, highlighting how a combination of financing dynamics, regulatory barriers, and inventory shortages in certain markets continue to impact cost factors. Emphasizing the “lock-in” effect created by historically low interest rates during the global pandemic, which has constrained housing turnover, the panel also noted that many of the most significant obstacles are found at the state and local level.

Go deeper: Kelley underscored the importance of modernizing federal tools— pointing to evolving updates to the 21st Century ROAD to Housing Act, including reforms to appraisal processes and USDA Rural Housing Service program elements that better reflect current market realities.

• She also stressed that down payment costs remain the primary hurdle for first-time buyers and highlighted several emerging congressional proposals (e.g., the creation of “home savings accounts” and greater flexibility in the utilization of retirement funds for home purchases) designed to provide greater access to homeownership for younger Americans.

What’s next: MBA continues to educate lawmakers and advocate for workable solutions on behalf of its residential and commercial/multifamily members.

For more information, please contact Rachel Kelley at (202) 557-2816.

MBA Hosts 10th Annual Condo Summit

On Tuesday, MBA hosted its 10th Annual Condo Summit at its offices, bringing together a cross-section of MBA member companies and industry stakeholders from the American Property Casualty Insurance Association, Community Association Institute (CAI), FHA, VA, and the GSEs on issues and challenges facing the condominium market.

Why it matters: MBA’s annual “workshop” provides a timely forum for MBA members to discuss a wide range of topics that impact borrower access to homeownership and lender participation in the condominium financing market. This year’s Summit comes after the GSEs’ recent updates to condominium insurance and project eligibility, which lenders and HOAs are continuing to implement.

• Several attendees noted that the Summit reinforced MBA’s role as the leading advocate for the mortgage industry, convening lenders, policymakers, and regulators for timely conversations on the issues shaping the future of the condo market.

Go deeper: Specifically, panel discussions focused on recent condo market data, condominium affordability, insurance costs, reserve funding, critical repairs, and project eligibility standards.

Highlights include:

• The condominium market represents roughly 10% of the overall housing market, with millennials driving demand—accounting for 45% of condo mortgage applications in the first half of 2025.
• FHA and VA indicated they will not align with the GSEs by increasing required reserve allocations for condominium projects from 10% to 15%.

What’s next: MBA will continue working with FHA, VA, the GSEs, and industry stakeholders to advance practical solutions that support sustainable condo lending and expand homeownership opportunities.

For more information, contact John McMullen, AMP, at (202) 557-2706, or Joel Kan, CMB at (202) 557-2951.

Colorado Attorney General Opens Pre-Rulemaking Comments on New Artificial Intelligence Law

On Wednesday, the Colorado Attorney General opened comments for informal input on the new law (SB26-189) on Automatic Decision-Making Technology (ADMT). The law, enacted in May, repealed and replaced the Colorado Anti-Discrimination in Artificial Intelligence Law (ADAI) enacted in 2024 under SB24-205. ‘

• The new law focuses on consumer disclosure and transparency, removes the risk assessment approach, and only requires a manual review when it is “commercially reasonable.” 

Why it matters: The opportunity to comment in the pre-rulemaking phase is crucial as the true impact of this new law will largely be determined by these future regulations. These comments help shape the direction the Colorado Attorney General Office will take for regulations and offers the Office insight into what the industry needs to comply.

What is next: Both MBA and the Colorado Mortgage Lenders Association plan to submit joint comments addressing several concerns, including whether existing adverse action notices required under federal law are sufficient to satisfy the requirements of the revised legislation, the need for additional clarity regarding when lenders must offer a manual review if it is deemed “commercially reasonable,” and other implementation issues.

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.

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:

• What Happens After a Reverse Mortgage Closes? – June 26
• UAD 3.6 Office Hours Part I – June 29
• Rethinking Income Strategies for Self-Employed Borrowers – July 8
• Analyzing the 2025 Mortgage Market: A Deep Dive into New HMDA Data – July 22
• The Black Line of Revenue: Building a Pipeline That Holds When the Market Shifts – July 27
• How Lenders Can Create More Homes – and Build Their Business – July 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.