NMHC\NAA joined several real industry groups in recent days to support changes to regulations regarding High Volatility Commercial Real Estate (HVCRE) loans. The regulation, which was enacted at the beginning of 2015, required banks to hold higher capital for acquisition, development and construction (ADC) loans that the banking regulators deemed to have higher risk. The construction sector has felt the brunt of this new regulation as loan terms have become more restrictive and more expensive in many markets. The industry has proposed new legislation that would clarify and rewrite much of the existing regulatory language and would result in a number of improvements for construction loans.
The letter was issued this week and the new legislation is expected to be introduced next week by Representative Robert Pittenger (R-NC). Real industry groups are continuing to work to identify both Republican and Democrat co-sponsors.
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