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ARTICLE · 28 JULY 2017

HVCRE: Busting Myths

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The Trump administration and Congress have lots on the agenda: tax reform, financial regulation reform, job creation (think infrastructure spending, maybe?) and more.

United StatesReal Estate and Construction
Krystyna M. Blakeslee
Krystyna M. Blakeslee

The Trump administration and Congress have lots on the agenda: tax reform, financial regulation reform, job creation (think infrastructure spending, maybe?) and more. While it seems unlikely that much of anything "real" is going to happen anytime soon or even this year (other than more drama, more tweets and more Trump-isms), there's some hope for a fix for the many failings of the High Volatility Commercial Real Estate (HVCRE) Rule.

But first- a little background- the HVCRE Regulations of the Fed, OCC and FDIC became effective January 1, 2015 and apply to any acquisition, development or construction (ADC) loans made by any bank. If the loan is an ADC loan, unless one of the 4 enumerated exemptions is satisfied (click here for more information on the exemptions), the loan will be subject to a 150% risk weighting requirement (instead of the previous 100% risk weighting requirement). This means that a $10 million HVCRE loan is treated as $15 million toward the bank's

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