Fannie Mae, Freddie Mac Announce New Protections for Renters
Fannie Mae and Freddie Mac announced new protections for renters in multifamily properties with mortgages backed by the enterprises.
Federal Housing Finance Agency Director Sandra L. Thompson said the new protections are intended to increase transparency and improve communication between housing providers and tenants. “FHFA and the enterprises will continue to engage with stakeholders to support both tenants and housing providers as these policies take effect in February 2025,” she said.
Under the policy, which will become effective February 28, 2025, all new GSE-backed loans will require multifamily borrowers to include the following three minimum standards within tenant leases*:
30-Day Notice of Rent Increases: Renters will receive written notice of a rent increase at least 30 calendar days prior to said increase.
30-Day Notice of Lease Expiration: Renters will receive written notice of the scheduled expiration of the residential lease at least 30 calendar days prior to said expiration.
5-Day Grace Period for Late Rent Payments: Renters will receive a minimum five calendar day period from the rent due date before late fees or other penalties can be charged.
Fannie Mae and Freddie Mac published FAQs related to the standards and an initial policy grid that outlines the policy, applicability, updates to loan documents, implementation requirements for borrowers, and monitoring and enforcement details.
The new requirements will apply to all multifamily properties for which new loan applications with Fannie Mae or Freddie Mac are signed on or after Feb. 28, 2025 with a few exceptions, including manufactured housing communities, which fall under a separate tenant protections policy established by Duty to Serve; existing credit facilities including loans funded through credit facility agreements that pre-date Feb. 28, 2025; loans for cooperative housing corporations; and loans that were originated using third-party (i.e., non-enterprise) form loan documents.
