MBA urges FHA action to reduce multifamily regulatory requirements

The Mortgage Bankers Association (MBA) has suggested that the mortgage industry could see advantages from a rise in multifamily loan volume backed by the Federal Housing Administration (FHA), and the U.S. Department of Housing and Urban Development (HUD) could help achieve this by easing rules and requirements for lenders without increasing risks. The MBA conveyed this message in a letter to HUD Secretary Scott Turner following a recent meeting between association leaders and Turner’s multifamily team at an MBA event, where Turner was a keynote speaker.

MBA President and CEO Bob Broeksmit emphasized in the letter that simplifying multifamily mortgage requirements could play a crucial role in meeting the Trump administration’s objective of lowering housing costs, as per one of the president’s initial executive orders. Broeksmit stated that over the years, changes in underwriting requirements for FHA multifamily loans have multiplied, often addressing goals unrelated to loan risks, which have added expenses and complicated the production of quality housing.

Broeksmit highlighted that FHA multifamily financing not only enhances housing accessibility but also contributes to the U.S. Treasury. With FHA multifamily volume significantly reduced, Broeksmit remarked that targeting unnecessary rules and requirements that lack a basis in loan risks could substantially boost production and help address the country’s affordability issues. The MBA also mentioned the rescinding of regulations related to the National Environmental Policy Act (NEPA) following President Donald Trump’s executive order, pointing out that these actions could streamline the development of quality rental housing.

In their letter, the trade group included a series of recommendations, such as revising regulations on buried underground pipelines’ acceptable separation distances, noise reduction requirements that may limit construction near transit centers, and guidelines on determining falling hazards.