State Relations Committee Update: Policy Highlights

Bipartisan Housing Bill Cleared for Enactment: Last Tuesday, following the Senate’s overwhelming bipartisan approval of the legislation, the House this evening passed the 21st Century ROAD to Housing Act (H.R. 6644, as amended) – the most substantial housing package to clear Congress in decades – sending the measure to President Trump for his signature. Read the full bill here and a summary here. Last week, the leaders of the Senate Banking and House Financial Services Committees announced a bicameral agreement on the latest version of the bill, culminating months of negotiations after both chambers passed differing versions of the housing package on two occasions over the past year-and-a-half. The legislation contains numerous hard-fought MBA priorities secured during the arduous negotiations that ramped up earlier this year, led by Senate Banking and House Financial Services Committees leaders, a bipartisan group of lawmakers, and the White House. This includes 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 addresses industry concerns around a provision requiring large institutional investors to dispose of newly constructed single-family build-to-rent (BTR) homes within seven years of acquisition. Although key supporters of the legislation have indicated the provision was not intended to capture existing horizontal multifamily and BTR communities, ambiguities in the statutory language could be interpreted more broadly. MBA is working with members of Congress and the Treasury Department to ensure implementation aligns with the intent of the legislation’s leading proponents and provides a clear exception for both new and existing BTR properties. MBA President and CEO Bob Broeksmit, CMB, in a press statement said, “We look forward to President Trump signing this legislation into law and will continue working with Congress and the Administration to advance additional legislative and regulatory reforms that improve housing affordability, increase housing production, lower closing costs, and expand homeownership and rental opportunities.” MBA extends its deep appreciation to the Mortgage Action Alliance (MAA), its state and local partners, and the grassroots advocates who responded to multiple Calls to Action over the past several months, helping educate lawmakers and build support for a stronger package. Together with coalition partners, MBA’s legislative and political affairs team led a sustained advocacy effort that helped remove several provisions with unintended consequences. On Monday night, MBA indicated its support for the overall proposal in a letter from MBA Chief Lobbyist and SVP for Legislative and Political Affairs Bill Killmer ahead of today’s House vote. President Trump is expected to sign the legislation into law as soon as Wednesday. MBA will remain engaged on implementation issues, working to ensure the build-to-rent provision is interpreted consistent with congressional intent.

Senate Banking Committee Hearing on “The Affordability Agenda”: Last Tuesday, the Senate Banking Committee held a hearing focusing on the theme of affordability for American families. The hearing covered a broad range of subjects, including housing costs, consumer credit, and financial strains on households. Republicans on the committee supported deregulatory approaches, supply-side economic growth solutions, and tax cuts – while arguing against government spending increases and heavy-handed regulation by the prior Biden administration. Committee Democrats concentrated on asking questions about the impact of President Trump’s policies on affordability, including tariffs, healthcare cuts, and the impact of the Iran conflict on gas, energy, and commodity prices. A summary of the hearing can be found here. The hearing highlighted the partisan divide on how to address broader affordability issues in the United States while showcasing bipartisan agreement on housing affordability and supply. Democrats and Republicans alike praised the positive outcomes for housing that would flow from enactment of the 21^st Century ROAD to Housing Act (“ROAD”). Senator Jim Banks (R-IN) focused on legislative solutions to housing and transaction costs, highlighting his legislation, the Reside Act, which allows for the conversion of commercial buildings into housing. He also questioned the witnesses about the regulatory burdens driving up mortgage costs. Senator Catherine Cortez Masto (D-NV) posited that the bipartisan “ROAD” Act must now be funded by Congress, specifically highlighting the HOME program's role in increasing affordable housing supply. The hearing demonstrates the political potency of the issue of affordability. MBA will continue to engage closely with lawmakers and the administration on any remaining affordability issues important to the real estate finance industry.

FHA Announces Broad Single Family Policy Modernization: Last Tuesday, FHA released a series of Mortgagee Letters (MLs) aimed at reducing regulatory burden and improving operational efficiency across its Single Family program. Several of the updates align with recommendations MBA has consistently advanced through its engagement with FHA. Collectively, the changes touch nearly every stage of the loan lifecycle, from origination and quality control to servicing and rehabilitation lending. Together, these updates represent one of FHA's broadest recent efforts to streamline its Single Family program. The most significant changes include: Streamlining Appraisal Field Review Requirements – Eliminates unnecessary appraisal field review requirements, reducing lender quality control costs while aligning FHA with industry practices; Limited 203(k) Rehabilitation Program – Expands the number of allowable contractor draw requests under the Limited 203(k) program to provide greater flexibility during home rehabilitation projects; Mortgagee Approval & Quality Control – Modernizes FHA's quality control requirements by permanently exempting early payment defaults caused by natural disasters from mandatory QC review samples; Form 92900-B (Important Notice to Homebuyers) – Removes the requirement for lenders to provide the duplicative FHA Important Notice to Homebuyers (Form 92900-B) at closing; and, Trial Payment Plans / Loss Mitigation – Clarifies FHA's trial payment plan requirements to strengthen program integrity while ensuring borrowers who proactively seek assistance are treated fairly. MBA has consistently advanced through its advocacy with FHA to simplify program requirements, remove unnecessary operational burdens, and better align FHA policies with industry practices. MBA will continue to engage with FHA, where additional clarification or implementation guidance may be needed through the Loan Administration Committee and Government Loan Production Subcommittee

FHA Provides Update on UAD 3.6 Implementation: Last Thursday, FHA announced the next phase of its transition to the modernized Uniform Appraisal Dataset (UAD) 3.6, providing additional implementation guidance and reaffirming its commitment to aligning with the GSEs' modernization efforts. While FHA has not yet announced its optional or mandatory implementation dates, the agency confirmed that its technology development is nearing completion, beta testing with a limited number of mortgagees is underway, and it is seeking additional participants. Lenders interested in participating in the beta test should contact the FHA Resource Center at [email protected] or call 800-225-5342. FHA also launched a new UAD 3.6 Implementation Preparedness Toolbox on its Electronic Appraisal Delivery (EAD) Portal, which includes technical specifications, implementation resources, and transition guidance for lenders, appraisers, and technology vendors. FHA indicated that its optional transition period will begin before the GSEs' mandatory implementation date, with a mandatory FHA adoption date to be announced at a later time.Given the challenges of implementing UAD 3.6, MBA Education has scheduled a series of “Office Hours” webinars to help members learn from those who have already started, and to ask questions of the GSEs: UAD 3.6 Office Hours Part I — June 29 | Register; UAD 3.6 Office Hours Part II — July 20 | Register; UAD 3.6 Office Hours Part III — August 10 | Register. Although FHA has not established a mandatory implementation deadline, lenders, appraisal management companies, and technology providers should begin preparing now. Early engagement will help ensure systems, workflows, and vendor integrations are ready ahead of FHA's optional transition period and the broader industry move to UAD 3.6.

CFPB Announces Major Overhaul of Consumer Complaint System: Last Wednesday, the CFPB issued a press release announcing significant revisions to its Consumer Complaint System. The CFPB states it is correcting flaws to restore integrity and utility to the Consumer Complaint System by implementing a series of changes particularly focused on credit reporting complaints. The CFPB notes that the complaint system has become distorted by an explosion of complaints generated by credit repair organizations, social media influencers, and AI-assisted dispute tools, making the data less reliable and increasing burdens on both the Bureau and companies. Notably, the CFPB states that credit reporting complaints increased from approximately 150,000 in 2019 to more than 5 million in 2025, a growth of over 3,700%.Some of the changes announced include: Standardizing the responses to complaints by issuing a revised Company Portal Manual; enhancing identity verification by implementing two-factor authentication, requiring verification of both email addresses and mobile phone numbers, adding disclosures for third-party representatives submitting complaints; reinforcing FCRA dispute procedures by emphasizing that consumers should first dispute credit report inaccuracies directly with consumer reporting agencies before filing a CFPB complaint; and, working with companies to clarify when complaints should receive administrative responses rather than substantive investigations, particularly where the complaint was submitted by an unauthorized third party, or the complaint appears abusive or duplicative. This is a notable win. Many of the changes mentioned above were also raised in MBA’s response earlier this year to the Bureau’s request for information on the Consumer Response Intake Form. In the letter MBA offered that the complaint database would be most effective if it functioned as a secondary escalation mechanism, available after a consumer has attempted to resolve the issue directly with the company. MBA suggested several ways that the CFPB can improve the Complaint Database to best facilitate dispute resolutions between the company and consumer, including: Encouraging prior interaction with the company before a consumer submits a complaint; verifying the identity of the consumer or third party submitting the complaint to reduce the number of false and incorrect complaints; allowing longer extensions to respond to complex issues; limiting the ability of consumers to file multiple complaints over the same issue; excluding matters that are “resolved with an explanation” from counting as a “complaint;” and automating how the information from the consumer is processed and how it is given from the CFPB to the company. MBA will continue to engage with the Bureau and inform members of updates. 

MBA Submits Coalition Letter to FCC on Enhancing Know-Your-Customer Requirements: Last Thursday, MBA and other trades sent a joint letter in response to the Federal Communications Commission’s (FCC) proposal to strengthen Know Your Customer (KYC) requirements for originating voice service providers as part of its ongoing effort to combat illegal robocalls, spoofing, and fraud. The letter argues that telecommunications providers should be subject to more rigorous customer due diligence obligations, similar to those imposed on financial institutions under AML/KYC frameworks. In the letter, MBA urges the FCC to take some of the following actions: require originating providers to collect specific information from business callers before allowing the caller to originate calls on the provider’s network; codify a base forfeiture amount for violations of the Commission’s rules requiring providers to take “effective measures” to prevent the origination of illegal calls; allocate additional resources to enforce its enhanced “Know Your Customer” regime for originating providers; and ban SIM boxes that allow scammers to spoof numbers of legitimate businesses. MBA has previously weighed in on these issues and the letter is consistent with MBA's longstanding advocacy on robocalls, spoofing, and fraud prevention. MBA will continue to monitor this proposal and provide any relevant updates. 

MBA White Paper Examines Emerging Shifts in Housing Demand: Last Monday, MBA's Research and Economics team released a new white paper examining how changing demographic and market conditions could reshape housing demand in the years ahead. Implications of a Persistent Slowing in Housing Demand explores trends in household formation, population growth, housing supply, and affordability, and assesses their implications for home prices, housing construction, and mortgage market activity. The report finds that while housing affordability challenges remain significant, housing markets have begun to rebalance in many areas as demand cools and newly constructed housing enters the market. For more than a decade, housing demand has outpaced supply, contributing to rising home prices and rents. However, slowing population growth, lower fertility rates, reduced immigration, and an aging population are expected to slow household formation over the next decade. These trends could alter housing supply-demand balances and have important implications for housing and mortgage markets. Over the past several years, growth in housing demand has slowed as new housing supply has entered the market in many regions," said Mike Fratantoni, MBA’s SVP and Chief Economist. “While affordability challenges remain significant, MBA’s research highlights the importance of looking beyond today's market conditions to understand the long-term forces shaping housing demand. These findings can help industry participants and policymakers better prepare for future changes in housing and mortgage market dynamics." To read the paper, click here.

MBA Recommends Improvements to Federal Banking Agencies’ Basel III Re-proposal: On Friday, June 18, MBA this 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 (Endgame; G-SIB surcharge; and standardized proposal for regional banks) was released on March 19, 2026. 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; and, 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. 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. 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.

Senate Advances Latest Consensus Version of Housing Package: On Friday, June 18, 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.” 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. 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.

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

FHFA Issues 2025 Annual Report to Congress: On Monday, June 22, 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). 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. 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. MBA will continue to partner with FHFA and the GSEs on the critical housing finance issues included in the 2025 report.

MBA Participates in House Briefing on Lowering Housing Costs: In mid-June, Rachel Kelley, MBA’s Vice President of Legislative Affairs, 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). 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. 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. MBA continues to educate lawmakers and advocate for workable solutions on behalf of its residential and commercial/multifamily members.

California CRA Bill Update: Bill Recast into Fair Housing Legislation: California’s AB 801 has been substantially amended from a Community Reinvestment Act (CRA) proposal for independent mortgage banks, credit unions, and state-chartered banks into a bill focused on establishing a regular cycle for already-authorized fair lending exams. The revised bill would require examinations at least once every four years, while also allowing the regulator – the Department of Financial Protection and Innovation – to accept comparable state or federal exams instead of conducting redundant reviews. The California MBA and MBA are seeking additional improvements to the bill to better protect the confidentiality and privilege of member company information, and align the fair lending exams with the Department’s existing compliance exams to lower the cost burden for both members and the Department. Last year, after the CRA bill cleared the Assembly, the sponsor agreed to pause further consideration to allow time for additional discussions around the CRA framework. Those conversations, shaped in part by advocacy from the California MBA and industry partners including MBA, ultimately led to amendments that moved the bill away from a new CRA-style regime and toward the regulator’s existing role in reviewing compliance with civil rights laws. Last week, the amended bill was approved by the Senate Banking and Financial Institutions Committee. The bill must be approved by the full Senate and then re-passed by the Assembly. MBA and the California MBA will remain engaged in seeking improvements as well as to block any effort to reintroduce CRA in the Legislature in future legislative sessions.

Massachusetts Rent Control Initiative Removed from November Ballot: In a significant win for MBA and the real estate finance industry, the Massachusetts Supreme Judicial Court (SJC) has ruled that the statewide rent control ballot question cannot appear on the November ballot. The ruling prevents the consideration of a proposal that would have imposed some of the strictest rent regulations in the country and created uncertainty for housing providers, lenders, and developers across the Commonwealth. The ballot question proposed to limit rent increases to 5% a year and would have left out small owner-occupied buildings with four or fewer units, and new buildings for their first 10 years. Critically, the definition of “covered dwelling units” included an exception for “dwelling units in facilities operated solely for educational, religious, or non-profit purposes.” The SJC took issue with this religious-housing carveout as the Massachusetts Constitution bars certain subjects involving religion from the initiative process. The justices said the question could not be submitted to voters in its current form. MBA had strongly opposed the ballot initiative in partnership with the Massachusetts MBA and through MBA’s collaboration with sister trade groups through the Housing Solutions Coalition. Massachusetts continues to fac housing affordability challenges, but this proposal would not have solved it. Instead, it likely would have discouraged new investment, made it harder to finance and maintain rental housing, and reduced the supply of homes over time. Policies that limit rents without increasing supply can end up making affordability worse, not better. MBA will continue to strongly oppose rent control, including any future effort in Massachusetts, and support policies to address regressive zoning and other barriers to increasing housing supply.

Colorado Attorney General Opens Pre-Rulemaking Comments on New Artificial Intelligence Law: On Wednesday, June 17, 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.” 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.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.