The Federal Housing Finance Agency has announced expanded protections for multifamily property owners and tenants amid the COVID-19 crisis.
The FHFA has announced that Fannie Mae and Freddie Mac will allow servicers to extend existing forbearance agreements with multifamily owners for up to three months, for a total forbearance of up to six months. While the forbearance is in effect, property owners must suspend all evictions for tenants unable to pay rent.
The forbearance extension is available for qualified properties with a GSE-backed multifamily mortgage if the property owner is experiencing a financial hardship due to the COVID-10 pandemic, the FHFA said. If a forbearance is extended, the borrower may qualify for up to 24 months to repay missed payments. If the forbearance is extended, the repayment schedule is modified, or a new forbearance agreement is executed, the borrower is required to provide tenants with the following protections during the repayment period:
Give tenants at least a 30-day notice to vacate
Not charge the tenant late fees or penalties for nonpayment of rent
Allow the tenant flexibility to repay back rent over time rather than in a lump sum
“During the pandemic, FHFA has been focused on protecting renters and borrowers while ensuring the mortgage market functions as efficiently as possible,” FHFA Director Mark Calabria said Monday. “The multifamily mortgage forbearance extension announced today will help renters stay in their homes and help property owners retain their properties.”
The FHFA said that it would continue to monitor the pandemic’s impact on renters, borrowers and the wider mortgage market, updating its policies as necessary.