Perhaps the biggest news last week was the Governor’s signature on House Bill 16; a supplemental appropriations bill that provides more than $324 million in funding for the Emergency Rental Assistance Program. Additional information on the Emergency Rental Assistance Program (ERAP) can be found by visiting Missouri REALTORS® CEO John Sebree’s recent post to Common Ground.
Additional issues of interest:
LLC legislation and advertising guidance:
This legislation has been filed in both House and Senate. The LLC legislation is HB 695 and SB 435. Advertising guidance bills are HB 1124 and SB 473. More on this to follow. Our 2021 Talking Points on this and other legislative priorities can be found on the REALTOR® Days & Legislative Visit Resources page of our website.
On Wednesday, February 8, the House Committee on Financial Institutions held a hearing on HB 697 and HB 814. Both deal with the subject of Property Assessed Clean Energy, otherwise known as PACE. The PACE program was developed to enable property owners to make their homes and businesses more efficient and resilient in terms of energy efficiency. Missouri REALTORS® generally supports these efforts but believes additional consumer protections are needed. Testimony has indicated that residential PACE financing is used more by individuals who have less credit availability. Additionally, the funding is generally only available for products with increased operating efficiency, making them more expensive.
Because these loans are a lien on the property and have lien priority over a first mortgage, they can occasionally cause issues during a sale. These issues create tensions for buyers, sellers and REALTORS®. For that reason, many believe it is appropriate to look for solutions that will reduce problems while allowing the loans to continue to be made, though likely at a lower volume. If there is no legislative action, we are likely to see more local jurisdictions revoke residential PACE authority.
Commissioner of Finance Rob Barrett shared with the Committee his response to an inquiry from the Federal Housing Finance Agency about the impact of lien priority and PACE loans. As the regulator of 229 state charted banks and trust companies, as well as savings and loan institutions, the Commissioner is concerned with the “present and future risk that PACE super-priority liens can and do have on borrowers, banks and the residential real estate market.” There is a possibility that the lien priority, coupled with the limited use of residential PACE nationwide, may result in a guidance letter from the FHFA to Missouri lenders. This guidance would inform lenders that sell Missouri loans on the secondary market that they must increase down payment requirements or increase rates, or both. We will do our best to keep track of these developments.
The COVID-19 liability issue has become very heated in the Senate. Senate Substitute 2, the Senate Committee Substitute for SB 51 & 42, while Perfected, has yet to be Third Read. We have discussed becoming involved in this debate. However, because our issue is such a small part of the big picture and because of our other priority issues, we have decided to stay on the sidelines and see how it plays out. I know other organizations have decided to become more involved and reach out to their members, urging them to contact lawmakers. We always encourage our members to only respond to our calls-for-action.
On a different note, the Senate has canceled session this week due to inclement weather. I will provide additional insight on the topics discussed above once session resumes. In the meantime, stay safe and stay warm.
Chief Lobbyist, Missouri REALTORS®