High Volatility Commercial Real Estate (HVCRE) Rule
Changes to the High Volatility Commercial Real Estate (HVCRE) Rule provide clarity and relief for bank ADC lending.
Overview: In July 2013, U.S. banking regulators issued the Basel III Regulatory Capital and Market Risk Rules. That issuance included a High Volatility Commercial Real Estate (HVCRE) rule, under which certain acquisition, development and construction (ADC) loans are subject to a 150 percent risk weight. The rule became effective on January 1, 2015. Effective May 24, 2018, a provision of the Economic Growth, Regulatory Relief, and Consumer Protection Act S. 2155 effectively amended the HVCRE rule to clarify it better align HVCRE capital treatment with factors affecting credit risk. We urge federal banking regulators to finalize proposed rules implementing that legislation to provide the clarity and relief Congress intended.
Recent MBA Activity Related to HVCRE
- Nov 28, 2018 - MBA Letter to OCC, Federal Reserve, and FDIC on HVCRE
- Dec 21, 2017 - MBA Signs Coalition Letter on HVADC
- Jul 14, 2017 - MBA Letter to Mr. Grant Wilson on HVCRE
- Apr 3, 2017 - MBA HVCRE Letter to Rep. Pittenger