Industry Leaders on Navigating Today’s Choppy Federal Waters

Earlier this month, National Housing & Rehabilitation Association hosted its annual Fall Developers Forum at the sumptuous Raffles hotel in the heart of downtown Boston, Massachusetts.

Against a backdrop of the then-ongoing federal government shutdown, much discussion at the conference was devoted to the potential promise and general uncertainties surrounding the affordable housing industry under the Trump administration. This prognostication was a primary focus of the Federal Housing Priorities and Program Updates panel, which brought together four expert speakers from across the industry to discuss just what the future of affordable housing programs may be in Washington.

Indeed, the timing of the conference made this panel particularly relevant, remarked moderator Joe Lynch, partner in Nixon Peabody’s affordable housing practice, occurring “late in the year when you’re trying to get your deals done, you’re trying to forecast deals, you’re trying to herd cats to get to closing, and you just don’t know what’s going on.”

Over the next few weeks, Tax Credit Advisor will be publishing highlights from the discussion, which include insight into expectations regarding the historic shutdown, likely effects on individual tenants of Trump administration policy, and a hopeful eye toward regulatory changes that could supercharge the industry.

This week, we begin with remarks from Eric Keifer, senior vice president at Rockport Mortgage Corporation (a Federal Housing Administration lender), who provided helpful guideposts for navigating day-to-day relationships with federal partners.

As a reminder, NH&RA members can enjoy a recording of the entire panel discussion here, or listen to the full Fall Developers Forum by visiting NH&RA’s On-Demand Learning Center.

Despite Agency Strains, HUD Soldiers On

Keifer kicked off the discussion on a positive note, predicting that HUD’s total multifamily firm loan commitments for FY2025 could total an excess of $14 billion. (HUD’s fiscal years end on September 30, but reporting has been delayed due to the shutdown).

Thus, despite federal turmoil, HUD “had commitments that they were getting out.” Indeed, even on September 30 — the day before the shutdown — Keifer said that Rockport received roughly $400 million of commitments.

The predicted $14 billion would be a “significant increase” over the past few years, as HUD has not crested the $13 billion mark since 2023.

Still, as fellow panelist Rob Hazelton of Dominion Due Diligence Group pointed out, HUD is well below what they “could” issue, if recent history is a guide. HUD’s banner years were 2013 and 2021, according to analysis from Trepp, when the agency issued $25 billion in loans for 391,104 units and $38 billion in loans for 322,163 units, respectively.

Next, Keifer turned to HUD’s known activity during the shutdown, expressing optimism that impacts may not be as devastating as once feared.

While many HUD functions did cease, Keifer noted that some vital activity remained. “If a HUD commitment was issued prior to October 1,” for example, employees working on those projects were recalled “on an as-needed basis to close those loans.”

On the whole, however, Keifer said that HUD’s day-to-day reality was murkier and at times contradictory. “We’ve had certain things that HUD has said they’re not doing, like Housing Assistance Payments (HAP) assignments or Transfer of Physical Assets (TPAs), but they’re in connection with closings. Sometimes, HUD says, ‘yes, we’re going to do that.’ And sometimes HUD says, ‘no, we can’t do that.’ So the logic behind that escapes us mere mortals.”

The status of attorneys at HUD’s Office of the General Counsel (OGC) had also changed from previous shutdowns, according to Keifer. “In prior shutdowns, OGC attorneys were accepted employees, which meant they came to work every day,” he said. “Now, they’re not accepted employees.”

This change, though subtle, lengthens an already drawn-out process for deals that have HUD involvement. “If you need OGC to do something in conjunction with what HUD is agreeing to do — like close a loan — those lawyers have to be recalled in the same way as a HUD employee,” Keifer said. “So that just takes a little bit of time.”

Knowing what functions were able to continue and what ended up in a logjam is vital to understanding future project timelines. As TCA has previously reported, a general industry rule of thumb is that HUD usually takes around two days to catch up for every day it was shut down.

Keifer expressed hope that this impasse may have a quicker resolution. “Unlike prior shutdowns, the leadership at HUD headquarters is thinking: ‘How do we get our machine up and running quicker than we have in the past?’”

Additionally, Keifer said that the buildup of HUD’s queue — projects whose approval or review for various programs were put on hold due to the shutdown — was much less than during the COVID-19 pandemic, when projects waiting for delayed HUD approval ran into the “hundreds.” This time around, Keifer predicted that the post-shutdown queue would be around 75 units — a much more manageable number.

Despite the complications of navigating HUD during the shutdown, Keifer highlighted certain changes to HUD policy that he said had the potential to further lubricate the development process.

Among the most impactful changes, Keifer said, is the October 1 elimination of multifamily Mortgage Insurance Premium (MIP) categories, and a reduction in MIP rates to 25 basis points across the board. Previously, there were three MIP categories, requiring developers to figure out which bucket their deal fell into and then calculate MIP rates, which ranged from 25 basis points to 95 basis points. This change will make for a smoother development process, Keifer said, as premiums will be reduced and the MIP categories’ administrative burden is eliminated.

This shift signals what Keifer said might be a hopeful trend from the new administration, toward streamlining programs and eliminating redundant regulation. “It’s great that you have all of these environmental requirements or building requirements, but guess what? Most states have those already, and wouldn’t it just make sense to defer to the state on those, as long as you think those are reasonable, so you’re not layering extra work on these deals?”