The Washington Report

NAR submitted comments to a joint request for comment by the Federal Reserve, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency, on proposed changes to capital rules they oversee.

These capital rules will affect the cost and availability of bank-financed mortgages. Depository banks have pulled back from housing in recent years, ceding their share to mortgage banks. The bank regulators are proposing these changes, in part, to draw banks back into housing finance. More competition may lower prices, but it also means a more resilient system.

NAR commented that:

• The risk weight (i.e., capital) for low down payment loans should not be raised;
• NAR recommends giving credit for private mortgage insurance;
• NAR applauds the regulators for eliminating an onerous capital deduction on mortgage servicing rights (MRSs) and recommending reviewing the risk weight on MSRs;
• NAR recommends re-evaluating the capital required for lines of credit banks extend to mortgage banks; and
• NAR applauds the proposal to reduce capital on private securitizations but recommends lowering them for government-sponsored enterprises (GSEs), government national mortgage association (GNMA), and mortgage-backed securities (MBS) as well.

NAR noted that its recommendations are in line with the president’s executive order to mortgage affordability.

NAR recently submitted comments supporting a U.S. Department of Agriculture (USDA) proposal that would exclude real estate commission fees from the cap on seller contributions in its Single Family Housing Guaranteed Loan Program, which backs home loans for low- and moderate-income buyers in rural areas.

Under the program, a seller is permitted to contribute up to 6% of the sales price toward a buyer's closing costs, escrow, and other expenses. Real estate commission fees that a seller pays on the buyer's behalf used to count against that limit. in 2025, USDA updated its policy through its loan handbook and administrative exception authority to exclude these fees from the cap, and is now making that update permanent by writing it into the regulation.

FHA, Fannie Mae, and Freddie Mac have all made similar changes, treating commission fees that sellers customarily pay as separate from other seller contributions rather than counting them against borrower assistance limits. USDA's proposed rule brings its program in line with that approach.

Professional buyer representation plays an especially important role for rural homebuyers, many of whom are first-time purchasers navigating a complex transaction with limited financial flexibility. USDA's decision to exclude buyer broker fees from the seller concession cap will help preserve access to that representation while ensuring that limited seller concessions remain available to address borrowers' other transaction-related costs.

Comments on the proposed rule are due June 22, 2026.