The Washington Report

On March 19, 2025, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2025-08, Rescinding Multiple Appraisal Policy Related Mortgagee Letters, to immediately rescind the policy guidance published in the following MLs:

• ML 2024-16, Extension to the Effective Date of Appraisal Review and Reconsideration of Value (ROV) Updates, dated August 6, 2024;
• ML 2024-07, Appraisal Review and Reconsideration of Value, dated May 1, 2024; and
• ML 2021-27, Appraisal Fair Housing Compliance and Updated General Appraiser Requirements, dated November 17, 2021.

For the first two items, on Reconsiderations of Value (ROVs), FHA has reverted to published language prior to implementation of a uniform process for borrower initiated ROVs that aligns with published Fannie Mae and Freddie Mac policies. However, borrowers are still entitled to request an ROV if they have concerns about the appraisal and should contact their lender to obtain information on initiating a request. 

The Appraisal Fair Housing Compliance ML was rescinded because the Uniform Standards of Professional Appraisal Practice (USPAP), which appraisers are required to adhere to per FHA policy, was updated in 2024, resolving the concerns the ML intended to address.

Mortgagee Letter (ML) 2025-08

This week, the Federal Housing Finance Agency (FHFA) and newly-confirmed Director Bill Pulte have made a number of structural changes to the agency, and at Fannie Mae and Freddie Mac, whom FHFA regulates. On Monday, Director Pulte removed 14 board members from the boards of Fannie and Freddie and installed himself as chairman. The board departures included members dedicated to core mission activities, accountability, and technology. Joining the board, in addition to Director Pulte, are members from hedge funds, the current general counsel at FHFA Clinton Jones, and others in the real estate and technology fields. The board shakeup gives Director Pulte even more control over the GSEs and their activities.

Following the board announcements, the Director has also begun removing probationary employees, others working on “non-statutory” efforts at FHFA, including staffers from research and statistics teams. Over 10% of the agency staff have been let go in the last two days; there are reports the Director will bring in 20 or more political appointees to fill gaps. Additionally, FHFA staff have received a return-to-office directive. It was also reported yesterday that the Director and the CEO of Freddie Mac have also ordered a return-to-office mandate for the company. We would expect a similar move to occur at Fannie Mae, though the company has prioritized remote work for employees since the pandemic and  many staff live and work outside the region.

NAR continues to monitor the evolving situations at FHFA. Maintaining a robust, liquid, and efficient housing finance system remains a top priority for NAR and we will continue prioritize policies and strategies that assist housing affordability and the increase of housing supply.

On Friday, March 14 Congress narrowly averted a federal government shutdown by passing a Continuing Resolution, or “CR” to fund the government through September 30, 2025.  At $1.7 trillion, the bill largely keeps government funding level with that of 2024, while increasing defense spending by $6 billion and reducing non-defense spending by about $13 billion.  The bill also increases spending for the Department of Housing and Urban Development (HUD) by $4.6 billion.  Critically this HUD funding includes money to fund HUD’s Project-Based Rental Assistance (PBRA), Tenant-Based Rental Assistance (TBRA), funding for programs that provide affordable housing for seniors and the disabled, and the Community Development Fund which finances the Community Block Grant Development (CDBG) program. 

The CR to fund the government includes an extension of the National Flood Insurance Program (NFIP), also through September 30, 2025.  NAR has long advocated for a long-term NFIP reauthorization separate from government funding bills to avoid a lapse in the program.  If a shutdown did occur due to inability to pass a funding bill, the NFIP would not be able to sell or renew flood insurance policies during the shutdown.  Existing policies would remain in effect until their expiration date, and renewal applications for policies received ahead of the shutdown would generally be issued.  Private, non-NFIP backed flood insurance policies.  To learn more about the impact of a lapse in the NFIP, visit NAR’s “FAQ: National Flood Insurance Program Expires September 30, 2025.”

NAR continues to monitor the government funding and to advocate for Congress to pass a long-term funding solution to keep the government operating fully. 

To learn more about the impact of a federal government shutdown on real estate, read NAR’s guide: “What a Government Shutdown Means for REALTORS®.”