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Congressional Outlook: Bipartisan Housing Bills on Tap

July 29, 2025

August recess is almost here, but Congress will have a busy fall with the September 30 government funding deadline. 

• The House is out until September, and the Senate is expected to wrap up late this week after working through confirming nominees. 
• Additionally, key legislators introduced bipartisan housing bills, and the Senate Banking Committee plans to hold a housing-focused markup today. 

Why it matters: The bipartisan, bicameral efforts on housing are a promising sign toward advancing legislation to target a variety of housing issues and needs. 

• Increasing Housing in Opportunity Zones: Enables the HUD Secretary to give added weight to applicants for competitive HUD grants that are located in or primarily serve designated Opportunity Zones to support housing preservation and construction.
• Build More Housing Near Transit Act: Amends the Capital Investment Grants (CIG) program in the Federal Transit Administration to provide an optional increased rating in the Federal Transit Authority’s evaluation process for projects in areas that establish pro-housing policy near public transportation routes.
• Revitalizing Empty Structures into Desirable Environments (RESIDE) Act: Creates a competitive pilot discretionary program within the HOME Investment Partnerships program if the annual appropriation exceeds $1.35 billion to convert vacant and abandoned buildings into attainable housing.
• Housing Affordability Act: Requires the Federal Housing Administration (FHA) to study multifamily loan limits and then grants HUD rulemaking authority, with FHA input, to adjust those limits to better match housing market costs and enhance affordability.
• For a section-by-section breakdown of the bill, click here. For legislative text, click here.

The Identifying Regulatory Barriers to Housing Supply Act, which aims to reduce state and local barriers to housing creation, was introduced by Republicans and Democrats last week.

• Representatives Mike Flood (R-NE) and Brittany Pettersen (D-CO) and Senators Brian Schatz (D-HI) and Todd Young (R-IN) introduced the House and Senate versions of the bill. 
• The bill highlights the restrictive practices embedded in traditional zoning laws, pushes communities to streamline excessive local regulations, and promotes greater openness in how neighborhoods are planned and developed. 
• The bill also reinforces the long-standing effectiveness of the Community Development Block Grant program in efforts to expand housing supply.
• A full copy of the legislation can be accessed here.

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Bank Capital Conference Hints at Significant Reform

July 29, 2025

On July 22, the Federal Reserve hosted a highly anticipated conference on the state of and potential reforms to the bank regulatory capital framework. Fed Chair Jerome Powell and Vice-Chair of Supervision Michelle Bowman were both in attendance. 

• Leverage ratio reform
• Evolution of the capital framework
• Reforms to the Global Systemically Important Bank surcharge (G-SIB) framework 
• Evaluating the stress test regime
• Chief Financial Officers' perspectives on reforms to the capital framework

Basel III: The Central Theme at the Conference 

• Most participants favored moving forward with Basel “Endgame” implementation, but with tailoring to account for bank size and business model. 
• Many panelists voiced concerns about the risk of double-counting capital requirements given overlaps between stress testing frameworks and Basel III. 

Other key themes included the need to:

• View the capital framework holistically rather than as a loose compilation of different rules. Speakers consistently argued that changes in one part of the framework (e.g., leverage ratios, G-SIB surcharge, stress tests) can have unintended consequences or create redundancies elsewhere, leading to suboptimal outcomes.
• Approach regulation pragmatically, focusing on identifying problems and developing efficient, simple solutions. Many speakers advocated for reducing bureaucracy, streamlining processes, and ensuring clearer, more predictable rules to enhance banks' abilities to serve customers and support economic growth.
• Ensure greater transparency in regulatory models, scenarios, and data to help identify and correct flaws, build trust with the public and investors, and enable banks to better manage risk and capital needs.
• Prevent regulations, particularly the enhanced supplementary leverage ratio (eSLR) and GSIB surcharge, from disincentivizing bank engagement in low-risk activities (like Treasury market intermediation) or pushing credit origination outside the regulated banking system.

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CREFC Publishes Updated Sustainability Strategic Issues Monitor

July 29, 2025

The CRE Finance Council announced the fourth update of its Sustainability Trends in the Commercial Real Estate Finance Industry: Update Report, July 2025, which outlines sustainability-related risks and opportunities for the commercial real estate (CRE) sector.

• Resiliency and efficiency standards, including the implications for insurance pricing, clean energy incentives, and decarbonization;
• Regulation, policy, and political dynamics, with an accompanying outlook on deregulatory trends, legal challenges, and nation-wide policy fragmentation; and
• Emerging trends such as data center energy use and resiliency, nuclear power, and biodiversity investments.

What they're saying: CREFC's Property Risk & Resilience Committee, launched in 2021 as the Sustainability Initiative, recognized the need for a reliable monitoring system to help industry partners navigate the complicated U.S. sustainability landscape.

• Given growing resiliency and energy needs, this monitoring system identifies both risks and opportunities for the CRE industry.

Please contact Sairah Burki (sburki@crefc.org) with any comments.

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CBO Report Examines GSE Conservatorship Exit Costs

July 29, 2025

The nonpartisan Congressional Budget Office, which is tasked with calculating the federal budgetary costs of proposed legislation or policy changes, recently issued a report that examines the costs and benefits of ending Fannie Mae and Freddie Mac (the GSEs) conservatorship. 

• “If CBO no longer considered the GSEs to be government entities, it would incorporate the estimated cost of any explicit federal guarantee in its future cost estimates and baseline projections.”
• As a reminder, the pre-2008 guarantee was “implicit” such that investors expected the government would step in to ensure timely repayment of defaulted loans—which it did. 
• The Treasury’s support is explicit to the entities themselves, but not the MBS. A change in the conservatorship would open questions on how the government would backstop the GSEs or mortgages. 
• Even if the guarantee were implicit, CBO says it would consider assessing the costs: “Before the GSEs were placed in conservatorships, CBO did not incorporate their implicit federal guarantee in its budget estimates. But the events of 2008 provide support for recording the cost of such a guarantee if the GSEs were released from government control without an explicit federal backstop.”

Go deeper: The report’s seven considerations are listed below: 

1. CBO projects that the GSEs’ future mortgage guarantees have a budgetary cost.
2. CBO treats the GSEs as if they were part of the government.
3. Releasing the GSEs from government control would result in both federal savings and federal costs.
4. CBO projects the budgetary effects of the GSEs’ mortgage guarantees on a fair-value basis.
5. CBO’s baseline budget projections and cost estimates incorporate administrative and judicial actions.
6. CBO would incorporate the cost of the Treasury’s implicit or explicit commitments to the GSEs in cost estimates.
7. CBO’s estimate of the proceeds earned from selling the Treasury’s shares in the GSEs would depend on many factors.

Contact David McCarthy (dmccarthy@crefc.org) with any questions. 

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CRE Securitized Debt Update

 

Private-Label CMBS and CRE CLOs

Only one transaction priced last week:

• BMARK 2025-V16, a $624.7 million conduit backed by 31 five-year loans secured by 157 properties across 36 states and Washington, D.C., from Citi, Goldman, DB, BMO, and Barclays.

By the numbers: Year-to-date private-label CMBS and CRE CLO issuance totaled $84.7 billion, representing a 45% increase from the $58.5 billion recorded for same-period 2024. 

Spreads Hold Steady

• Conduit AAA spreads tightened 2 bps to +81, while A-S spreads were unchanged at +113. YTD, AAA and A-S spreads are wider by 6 and 8 bps, respectively.
• Conduit AA and A spreads were unchanged at +160 and +200, respectively. YTD, they are wider by 25 bps and 35 bps, respectively.
• Conduit BBB- spreads were unchanged at +500. YTD, they are wider by 75 bps.
• SASB AAA spreads were tighter by 1 - 2 bps to a range of +102 to +128, depending on property type.
• CRE CLO AAA spreads were tighter by 5 bps to +130, while BBB- spreads were unchanged at +375.

Agency CMBS

• Agency issuance totaled $2.5 billion last week, comprising $1.4 billion of Fannie DUS, $932.6 million of Freddie K, Q, and Multi-PC transactions, and $194.8 million of Ginnie Mae transactions.
• Agency issuance for the year totaled $79.1 billion, 38% higher than the $57.4 billion for same-period 2024.

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Senate Banking Requests Feedback on Crypto Legislation

July 29, 2025

Now that the House has cleared three digital asset bills, the Senate is beginning robust consideration of the market structure legislation that would set up a regulatory regime for digital asset investments and exchanges. 

• The legislation is focused on digital assets, but it contemplates updates to “investment contract” definitions and numerous reporting regulations. 
• While the intent is to update the law to allow for a digital asset market and oversight, it is important that lawmakers receive feedback from existing securities market participants on potential intended or unintended consequences of the effort. 
• CREFC will send additional details to our Legal Advisory and Advocacy Committees. 

Please contact David McCarthy (dmccarthy@crefc.org) with any feedback, responses, or questions on the RFI. 

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CREFC Publishes Updated Sustainability Strategic Issues Monitor

July 28, 2025

The CRE Finance Council announced the fourth update of its Sustainability Trends in the Commercial Real Estate Finance Industry: Update Report, July 2025, which outlines sustainability-related risks and opportunities for the commercial real estate (CRE) sector. 

The report investigates:

• Resiliency and efficiency standards, including the implications for insurance pricing, clean energy incentives, and decarbonization; 
• Regulation, policy, and political dynamics, with accompanying outlook on deregulatory trends, legal challenges, and nation-wide policy fragmentation; and 
• Emerging trends such as data center energy use and resiliency, nuclear power, and biodiversity investments.

CREFC's Property Risk & Resilience Committee, launched in 2021 as the Sustainability Initiative, recognized the need for a reliable monitoring system to help industry partners navigate the complicated U.S. sustainability landscape.

• Given growing resiliency and energy needs, this monitoring system identifies both risks and opportunities for the commercial real estate industry.

CREFC’s Property Risk & Resilience Committee will continue to identify and evaluate risks and opportunities to CRE as the U.S. sustainability landscape evolves, including changes in regulation, policy, and technology.

Please contact Sairah Burki (sburki@crefc.org) with comments.

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CREFC's June 2025 Monthly CMBS Loan Performance Report

July 23, 2025

CRE Finance Council has released a report on CMBS loan performance for June.* 

  

• Conduit/SASB CMBS combined delinquency of 7.13%
  • Delinquency rate increased 5 bps in June
  • Fourth consecutive monthly increase; follows increases of 5 bps and 38 bps in May and April, respectively
  • On a YOY basis, the overall combined delinquency rate is up 178 bps (7.13% vs. 5.35% in June 2024)
• Office delinquency rate rose 49 bps in June to 11.08% and remains the highest delinquency rate of all property types
  • Office delinquency rate set another record high in June, surpassing previous peaks of 11.01% (December 2024) and 10.70% (July 2012)
• Hotel delinquency has been volatile in recent months, rising 42 bps to 6.81% in June after dropping 146 bps in May
• Overall, June delinquency rate still 319 bps below the 10.32% peak in June 2020 – the height of pandemic-related lockdowns
• Loans in special servicing (SS) increased 27 bps to 10.57% in June; SS rate has increased in 16 of the last 18 months and is up 234 bps YOY 
• In a June 27, 2025 report, BofA analyzed YTD conduit repayment trends across multiple dimensions, highlighting payoff rates by property type, loan size, and structure (interest-only vs. amortizing)
  • Of $24.2B in conduit loans maturing in 1H25, 42% paid off at maturity as scheduled, with an additional 26% prepaying with penalty and 4% liquidated, leaving 28% ($6.8B) outstanding past maturity, with office loans performing worst (38% on-time payment) and multifamily best (86%)

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Crypto Legislation: Real Estate Considerations 

July 22, 2025

The House passed a trio of cryptocurrency, tokenization, and digital commodity-related bills last week after some midweek drama and false starts that delayed action.

Why it matters: Crypto has been a key priority for the administration and has attracted bipartisan support. The Stablecoin bill, which had previously passed the Senate, will become law with the President’s signature.

• The market structure bill, which has only passed the House, intends to cover a broader array of digital assets and set up a regulatory structure for coin and token issuance and exchange.
• The impacts for CRE finance include potential blockchain and tokenization for recordkeeping. The legislation also includes a number of studies on how blockchain might apply to existing securities markets.

By the numbers: The House Freedom Caucus delayed consideration of the bills over concerns with central bank digital currency (CBDC), but joined to advance the legislation after assurances from the White House and GOP leadership. 

• The Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act (H.R. 1582) passed by a vote of 308-122 with the support of 102 Democrats. Twelve Republicans voted against passage.
• The Digital Asset Market Clarity (CLARITY) Act of 2025 (H.R. 3633), which addresses market structure, passed by a vote of 294-134 with the support of 78 Democrats.
• The Anti-CBDC Surveillance State Act (H.R. 1919) passed by a vote of 219-210 with the support of two Democrats.

What's next: The GENIUS Act will head to the President's desk, while the CLARITY Act and the Anti-CBDC Surveillance State Act will head to the Senate for consideration.

Go deeper: The CLARITY Act would set up a regulatory framework for digital assets split between the Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC). Click here for a Congressional Research Services overview of the legislation. 

• The CFTC would have a central role in regulating digital commodities and related intermediaries.
• The SEC would maintain authority over primary market crypto transactions, subject to a new limited exemption from SEC registration requirements for fundraising. 
• The bill would require a study on non-fungible tokens (NFTs), including how they have integrated with traditional markets, including real estate. 

The bottom line: The GENIUS Act is the first significant step toward a federal regulatory apparatus on digital assets. House proponents hope to press the Senate to act expediently on the market structure portions, though some Democrats have been skeptical of crypto and critical of President Donald Trump’s business dealings in the space. 

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