Bill Killmer

This is VERSED, powered by VIUM Capital, the podcast that brings you conversations with the leaders driving change in seniors housing and healthcare. I’m your host, Steve Kennedy, and together we’ll explore the insights, challenges, and solutions shaping our industry.

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Steve 00:24

Welcome to the first VERSED podcast of 2025. I’m really honored to have Bill Kilmer from the Mortgage Bankers Association joining us. Many of you may know Bill. He's been with the MBA for 15 years. He was with the National Association of Homebuilders for 20 years before that. So safe to say Bill has been in Washington, DC and dialed in, for a while. So, Bill, thanks so much for joining the Versed podcast today.

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Bill 00:54

Well, thanks, Steve. I appreciate the invitation. Glad to be here. And that introduction just confirms that I'm an old guy who's been trapped inside the Beltway for a while, but happy to talk through some of these issues with you today.

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Steve 01:07

Yeah. Appreciate that. And just for listeners to know, the Mortgage Bankers Association is one of the most important associations that VIUM Capital is a part of. They do tremendous advocacy work for the real estate lending sector, among others, both commercial but also, single family. And we're relatively, heavily involved on the multifamily commercial side. And so I was with Bill, in San Diego at MBA CREF just a few weeks ago, and appreciate him agreeing to sit down.

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And Bill, today is the 30th day that the Trump administration has been in office. Has it been a boring first month? Has anything happened in DC?

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Bill 01:50

Well, those of us who were working in DC during Trump 1.0 knew that they were going to get off to a more rapid start. But I think this is unprecedented in terms of kind of a consolidated pivot and profound change from one administration to another. You have to go back to, like, the FDR administration to see as sweeping the implementation of a rapid plan. President Trump's about to catch up with FDR in terms of the most executive orders utilized and really kind of remaking things from Trump. 1.0, and this second attempt at his second term and second attempt at governing. And it can be described as controlled chaos, but, some days it feels like there's not as much control. But it's flooding the zone and people back on their heels. And that includes the Congress, but it also includes people working at the various cabinet agencies and civil servants, those that are starting to occupy those spaces in the regulatory space that have been confirmed by the United States Senate. So it's been kind of breathless, Steve.

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Steve 03:11

Yeah. I bet we're appreciative to have you on the ground and we're obviously receiving updates even multiple times a day with things coming out from DC. And let's drill down a little bit into the commercial real estate market before going into seniors housing and health care, specifically.

Besides President Trump, who or some of those other players that are going to impact commercial real estate in the United States? Given that we've got a Congress now both in the House and the Senate that are controlled by the Republican Party and some of those appointees that have been confirmed by the Senate.

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Bill 03:52

We still have three co-equal branches of government. Obviously the courts will have an impact. I won't go into any depth and talking through that, but, the federal judiciary, the Supreme Court, at some point may rule in some case that will have an impact on real estate writ large or the craft side of our industry, for sure. The Congress has been remade. Republicans have historically narrow margins of majority, particularly in the House. But there is this Republican trifecta of the White House and then Republican control of the House in the Senate. So the leaders in both chambers, John Thune, Majority Leader, Mike Johnson, Speaker of the House, and the other leaders for Republicans in both chambers, but in particular, the committees that have jurisdiction over real estate and housing issues continue to be the House Financial Services Committee and the Senate Banking, Housing and Urban Affairs Committee. So French Hill from Arkansas, Republican, is the new chairman of House Financial Services. He is a banker himself, and actually worked in Washington in the Reagan and Bush 41 administrations. He was a staffer on the Senate Banking Committee before electing to run for Congress several years ago. So he brings a real practical grounding in some of the issues confronting the industry as a lender himself.

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And then Tim Scott from South Carolina, Senator, is the chairman of the Senate Banking Committee. It'll be tougher for him to work with Elizabeth Warren, who is the senator who's his ranking member on the Senate Banking Committee. Their politics couldn't be more different. I think housing will be one of the issues where they can potentially find common ground. French Hill's ranking member, ranking Democrat, is former chair of financial services Maxine Waters from California. Again, their politics are very different, but they have a very civil and good personal relationship. And I think that Chairman Hill is going to try to work very carefully with Waters, no surprises. Again, try to find common ground in real estate and housing may be one of those areas.

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And then there's just the alphabet soup of all the regulators. Obviously, HUD, FHFA for regulating the GSEs. And then others, the Treasury Department writ large, the SEC, other independent regulators and I would say this: one that's probably not on the radar screen for the folks listening to this podcast, off the top of their head would be a real consolidation of authority, under the Office of Management and Budget in the Trump White House. The director of OMB is a Senate confirmed cabinet position, but has been co-equal in some administrations to the various cabinet agencies and the OMB, although it's always been the clearance mechanism for rules coming from other cabinet agencies, has consolidated their authority with one of the Trump executive orders to include independent agencies that go around. So, they're going to be playing an even more prominent role in making sure the White House is the one calling the tune. And the cabinet secretaries and independent regulators are playing along.

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Steve 07:21

Talk about so many issues coming back out or coming out right now and Mortgage Bankers Association, you have to prioritize. What are you going to focus on? Where's the probability for success and advocating for your membership specifically in the seniors housing, health care space? We're in a space that's a relatively small part of the overall commercial multifamily world. But there obviously are specific issues that impact us that we collectively, as a sector, want to focus on with MBA's health. Can you talk about an issue or two right now that you see for the seniors and health care, commercial real estate sector that we need to be focused on?

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Bill 08:06

Sure. And I'll kind of generalize and start at the top and then drill down a little bit more specifically in the seniors housing space. I think obviously there's great opportunity in that space, and I think we suspect that the growth in that niche is going to continue.

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But when you talk about the three issues, and, Steve, you and I focused on this a little bit when we ran into each other at the CREF Conference in San Diego recently. The three things that are top of mind for us, and we've already talked about this a little bit, is the transition to the Trump 2.0 administration and just the sweeping change, the breakneck pace, etc.. Some of the change that they're implementing and how it will impact programs like the seniors housing and health care space. Then there's a tax policy debate that's going to happen. It's inevitable because there are so many expiring provisions to the 2017 Trump Tax Cuts and Jobs Act, which really was tax reform. A lot of changes to individual rates, individual provisions of the tax code, but a lot of business facing provisions and, the cost of making changes in that tax base, even if you were just to extend the expiring TCJA provisions is pretty monumental, even by Washington standards. You're talking 5 or $6 trillion over ten years. That's serious money even in this day’s Washington. And so that'll touch every aspect of the economy, including those that are in seniors housing. But, it also will be a colossal failure by Congress and the administration if they can't get something done by December 31st, at the end of this year when the expiration kicks in. So, maybe that's an extension, a short term extension, or maybe that's something that bumps out several of those provisions 5 or 6 years. But there's an enormous cost there, and there's going to be a tension between not only the revenue that you might need. So changes in the tax code potentially, that could impact real estate as pay-fors, but also cuts in programs and the House and Senate are really in an arm wrestling match about how they're going to frame that debate. It's not going to happen in earnest until later in the year. But that's all the conversation you're hearing about President Trump saying he wants one big, beautiful bill, which is the way that they're going to get into this reconciliation. Process debate, which really boils down to, you’d only need a simple majority in the United States Senate, you wouldn't need 60 votes to overcome a filibuster and get to a supermajority. And this isn't a Partizan tactic. This has been used by Democrats and Republicans. This is how the Obama health care reforms became law. It's how the Inflation Reduction Act was passed during the Biden administration, with Democrats controlling the Congress and Republicans have used this. This was the process that was used in 2017.

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And then the other thing that's top of mind for the industry, is the potential for release of the GSEs from conservatorship. Fannie and Freddie since 2008 have been, in effect, wards of the state. And that could have a big ripple effect for other elements of the industry, including seniors housing. Now, I think that's on a slower timeline, but I think a lot of important framing for that is going to happen.

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And then, let me dive a little deeper to really get to your question, Steve. Medicaid funding is one of the potential offset areas that's been targeted to try to come up with hundreds of billions of dollars potentially in cuts to Medicaid, which obviously could have a ripple effect into the seniors housing and health care space. I think when we look at sort of administrative issues, there's been a backlog. It's my understanding from my staff colleagues at MBA. There's been a backlog in the queue for a lot of the projects in the seniors housing space that we would hope to have come online. So, dealing with that when we're in the midst of this DOGE, the Department of Government Efficiency, government wide examination of trying to find redundancies and look for reductions, slash efficiencies in every agency that's descended on HUD as one of the earlier agencies. And so we're grappling on a daily basis to try to get our arms around: What does that mean? The loss of civil servants. How many of them are taking buyouts to leave their government service earlier than maybe they had planned, but the incentive may make it worthwhile. It's called the fork in the road. We don't know how many of the HUD employees, for example, are going to take advantage of that. We're not sure exactly what other staff reductions, either the probationary employees at Ginnie May or at FHA are going to mean in terms of, impacting the execution of those programs. So, and, allowing for deals to pencil out and go forward. So those are a few of my off the top observations about drilling a little deeper.

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Steve 13:19

Yeah. I'm glad you touched upon, HUD. We're obviously a very active HUD healthcare lender through the 232 program. It is such an important program that has made the government money that helps pay down the deficit for each year and its existence with for those sectors of the commercial real estate economy, that private sector capital is going to be resident to, lend into without some sort of public private partnership. And so we're cautiously optimistic that we can get through this period with DOGE at HUD and, but at the end of the day, not have fundamental issues descending upon HUD in that program. Our chief underwriter and senior managing director, Allison Lumley is president of HMAC, the Health care Mortgage Advisory Council, and her office is right next to mine, and she's on a lot of calls every day just trying to navigate this, especially with the growing queue.

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Bill 14:22

Taking the longer view is important now. This really is the most sweeping consolidation since the New Deal and FDR, not in terms of working with Congress to pass new programs, but in terms of consolidating executive branch authority to implement the Trump policy agenda. And a lot of senior officials and FHA commissioner, Assistant Secretary for housing, a DAS for multifamily and health care. Although some of those folks who don't have to go through the Senate confirmation process will be in place sooner than later. You still don't have a full complement of people to help support, again, using HUD as an example, the new secretary, Scott Turner. So it's a pretty small group of politicals that have been installed at HUD or confirmed, like Secretary Turner. So waiting until those people come online and treading water until then, I think is important consideration for folks like you all.

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Steve 15:24

What can we do, not just health care, senior housing, commercial real estate lenders. But other folks in our sector, from the owners of properties, from the operators that are serving our seniors, from an advocacy perspective, I know that some of us are going to be on the Hill in April for the National Advocacy Conference, which MBA hosts and is a way for us to meet with our own congressional representatives, but also those representatives in some of those committees that you mentioned. Talk a little bit about sort of best practices for those of us in the field to advocate appropriately.

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Bill 16:01

I live by an adage that one of my mentors from earlier in my career taught me, which is that if you're not at the table, you're likely on the menu. So showing up to events like the National Advocacy Conference. And thanks for mentioning that, Steve. That'll be April 8th and ninth this year. We will again have a very specified commercial multifamily track, I can assure you. Like in past years, that affordable housing and FHA, multifamily and seniors and health care program considerations will be one of the priorities for that CREF track that we're just now kind of assembling. But that's definitely going to be a point of emphasis. And I think working with other like minded groups, building coalitions and then showing up to have conversations with your elected officials. It is a breathless time. The Trump folks have come back to Washington and taken hold of the news cycle and the agenda by storm, but that's not going to persist forever. He can't keep this up. His team can't keep this up on a government wide basis, much less in the housing space at the same pace for 3 to 4 years. And he's like every other president in the sense that he's got a 12 to 18 month window where the capital he accumulated by winning the election again, more decisively than he did in, in 2016 this go around, is there to be utilized, but, the window will close and, the midterm elections will will happen in 2026. So showing up, being advocates, being your own best advocate because folks like, at your company, but others, who are doing similar work are the experts. Typical congressional staffer, less so at the committee level, but certainly in every personal office, by definition, has to be a mile wide and an inch deep in terms of their understanding and there's no substitute for people showing up and explaining in a real world, practical sense, what problems or what realities are facing you all in business operations and the services that you're providing, by being part of the seniors housing and health care program.

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So, it's the default answer of that I guess can be attributed to Woody Allen about 50% of life is showing up. That's the first step. But I think it's more important than ever in the current environment because official Washington is kind of back on its heels, and folks like those at your company and others in the industry really need to show up to try to help fill that void.

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Steve 18:43

When we launched VIUM, almost five years ago, that was part of the foundation that we wanted to build upon. And so obviously, working with folks like yourself and MBA and HMAC, AHCA/NCAL and so many important associations out there that can coalesce that message and be on the ground. So we're happy to be a part of that.

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In our past Versed podcast, we'd ask about a favorite book that you might have or recommend. And I'm going to expand that going forward to a book or a podcast. Is there a favorite book or podcast that Bill Killmer listens to or reads and would recommend?

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Bill 19:26

Well I appreciate that question. It's a great question, Steve. I'm not a podcast guy, although I'm honored to be on this one with you. And I totally understand the relevancy. And obviously, our society consumes information very differently than when I was growing up and going through school, much less kind of forging my path and in my career. Now, if you were to talk to my three adult children, several of them are big podcasters and they’d have some really pertinent and current recommendations.

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I do read a lot, and I like nonfiction. I also, not surprisingly, like history and kind of how it intersects with government. And I'm really enjoying a book I’m reading right now called “Life After Power” that one of my kids gave me for Christmas. And it's a chronicle going back to Thomas Jefferson as our third president. But then the book end to that would be George W Bush. And there's a whole chapter in the book on Jimmy Carter and what former presidents did. Herbert Hoover is also one of the folks they reflect on in the book. Sort of talking about how sometimes the major challenges in these famous Americans' lives present themselves in even a more profound way after they leave office. And, President Obama, former President Obama is a great example of that in that he's a relatively young guy to be an ex-president, and he's got still a significant chunk of his life to lead. So that's kind of what's captured my fancy now. And I'd recommend that to those that are listening to this.

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Steve 20:59

Well, thanks for that recommendation and special in particular when your kids have given it to you and said, hey, dad, take it and read it.

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Bill 21:06

Yeah. My youngest daughter is going to hear that I shouted her out anonymously on a podcast today.

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Steve 21:12

Well, I want to take a moment just to thank you, Bill Killmer, and all of MBA for what you do for advocating for our space and the folks that we serve. Thank you, Bill, and thank you, listeners, for tuning in to the latest edition of Versed.

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Outro

Thanks for tuning in to VERSED, powered by VIUM Capital. The conversation doesn’t stop here. Let us know what topics you want to hear and let’s make an impact in healthcare and seniors housing together. Till next time, I’m your host, Steve Kennedy, and this is VERSED.

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