For all the bipartisan support it has received since its introduction last July, the newest iteration of a massive Senate housing bill hit a road bump this week.
On Tuesday, the 21st Century ROAD to Housing Act cleared a procedural hurdle by a vote of 89-9-1 to advance toward a floor vote, which may come as soon as Thursday.
But Section 901 in the Senate bill, titled “Homes Are for People, Not Corporations,” includes major restrictions on institutional investor involvement in the single-family home market that were not included in the version of the bill that passed the House on Feb. 9 in a 390-9 vote.
The section seeks to codify President Donald Trump’s proposal to curb single-family home purchases by large institutional investors, but a provision that would require investors to sell certain homes, including build-to-rent (BTR) housing, within seven years of purchase has received pushback.
The change was met with opposition from a dozen industry trade groups — including the Mortgage Bankers Association (MBA), the National Association of Home Builders and the National Housing Conference — which claimed the provision would stifle BTR development and cut off a crucial source of affordable housing.
The MBA followed up on a joint letter sent to Senate leaders specifically about Section 901 — which it co-endorsed with 11 other organizations — with an MBA-only letter that raises concerns about other sections of the bill.
Wednesday’s letter to Senate leadership, signed by Bill Killmer, MBA’s senior vice president of legislative and political affairs, concluded that the association could not yet support the 21st Century ROAD to Housing Act in its current form.
Along with its BTR housing concerns within Section 901, the letter cited the need to “act to further refine and improve the legislation” in Section 213, which addresses Federal Housing Administration (FHA) multifamily loan limits.
Noting that the MBA supported that section in its previous form, the association now maintains that the bill’s language “contains drafting errors that would oblige FHA to actually decrease the loan limits to levels below those calculated by [Department of Housing and Urban Development] staff under current law authorities, thereby negating the underlying purpose of the section as introduced.”
Additionally, the MBA expressed “significant concerns with the new provision in Section 101” that would require servicers on all government-backed loans to offer “foreclosure mitigation” counseling to all borrowers that become 30 days delinquent on payments. The association believes that using the FHA Mutual Mortgage Insurance Fund to pay for counseling services outside of its immediate purview, as the section now proposes, “does not appear to be permissible or wise.”
However, the MBA letter stated that the group supports the modified Section 503 related to Rural Housing Service reforms and the modified Section 704 covering the Appraisal Modernization Act.
Kimber White, president of the National Association of Mortgage Brokers (NAMB), told Scotsman Guide that his organization is also preparing a letter to send to the sponsors of the bill, along with the House Committee on Financial Services and the Senate Committee on Banking, Housing, and Urban Affairs. He said he expects the letter with NAMB’s suggested fixes to be sent by Thursday.
Meanwhile, Politico reported Wednesday that Republican Andy Harris of Maryland, who chairs the House Freedom Caucus, said in an interview that his influential contingent in the House of Representatives would not support the Senate version of the bill.
“We’ll deal with housing in some way — it’s not going to be the way the Senate is going to send it over to the House,” Harris told Politico. “We’ll go from there.”
