FHFA, GSEs Extend COVID-19 Multifamily Forbearance through Sept. 30
The Federal Housing Finance Agency on Thursday said Fannie Mae and Freddie Mac will continue to offer COVID-19 forbearance to qualifying multifamily property owners through September 30, subject to the continued tenant protections FHFA has imposed during the pandemic. This is the third extension of the programs, which were set to expire June 30.
“While COVID-19 cases are declining and many homeowners continue to emerge from forbearance, many renters, who are unable benefit from rising home prices, have not financially recovered from the pandemic,” said FHFA Director Mark Calabria.
Property owners with Enterprise-backed multifamily mortgages can enter a new or, if qualified, modified forbearance if they experience a financial hardship due to the COVID-19 emergency. Property owners who enter into a new or modified forbearance agreement must:
–Inform tenants in writing about tenant protections available during the property owner’s forbearance and repayment periods; and
–Agree not to evict tenants solely for the nonpayment of rent while the property is in forbearance.
Additional tenant protections apply during the repayment periods. These protections include:
–Giving tenants at least a 30-day notice to vacate;
–Not charging tenants late fees or penalties for nonpayment of rent; and
–Allowing tenant flexibility in the repayment of back-rent over time, and not necessarily in a lump sum.
In addition to requiring written tenant notification, Fannie Mae and Freddie Mac have posted the tenant protections to their respective online multifamily property lookup tool websites. The property lookup tools enable tenants to find out if the multifamily property in which they reside has an Enterprise-backed mortgage.
“By extending the forbearance program for Fannie Mae multifamily borrowers, we are also extending essential protections and flexibilities for renters, which will help keep people in their apartments as the economy continues to improve,” said Michele Evans, Executive Vice President and Head of Multifamily.
“Allowing borrowers additional time to request forbearance and ensuring tenant protections are in place in those properties is just one of the ways that Freddie Mac has continued to stabilize the multifamily market since first implementing this COVID-19 forbearance program in March of last year,” said Debby Jenkins, head of Multifamily at Freddie Mac.
Freddie Mac reported 1,154 forborne securitized loans, representing about 2.1% of its total securitized unpaid principal balance. For those whose forbearance has ended, more than 82% by loan count are currently making payments or have fully repaid their forborne payments. “Requests for new or additional forbearance have dropped to just a handful in recent months,” Freddie Mac said.