GSEs Extend Multifamily Forbearance
The Federal Housing Finance Agency announced Fannie Mae and Freddie Mac will allow servicers to extend forbearance agreements for multifamily property owners with existing forbearance agreements.
The extension increases the total forbearance period to up to six months.
While the properties are in forbearance, the property owner must suspend all evictions for renters unable to pay rent. The forbearance extension is available for qualified properties with an enterprise-backed multifamily mortgage experiencing a financial hardship due to the coronavirus national emergency.
If a forbearance is extended, once the forbearance period concludes the borrower may qualify for up to 24 months to repay the missed payments. Additionally, if the forbearance is extended, the repayment schedule is modified or a new forbearance agreement is executed, the borrower is required to provide the following protections to tenants during the repayment period:
–Give the tenant at least a 30-day notice to vacate;
–Not charge the tenant late fees or penalties for nonpayment of rent; and
–Allow the tenant flexibility to repay back rent over time rather than in a lump sum.
FHFA Director Mark Calabria said FHFA seeks to protect renters and borrowers during the pandemic while ensuring the mortgage market functions as efficiently as possible. “The multifamily mortgage forbearance extension announced today will help renters stay in their homes and help property owners retain their properties,” he said.
The Federal Housing Finance Agency regulates Fannie Mae, Freddie Mac and the 11 Federal Home Loan Banks.