The owners of multifamily properties who postponed mortgage payments – in exchange for not evicting residents – may be able to extend forbearance until fall.
WASHINGTON – The Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac (the Enterprises) will continue to offer COVID-19 forbearance to qualifying multifamily property owners through Sept. 30, 2021, subject to the continued tenant protections FHFA has imposed during the pandemic.
It’s the third time FHFA extended the program. Before the latest announcement, it expired on June 30, 2021.
If a multifamily owner goes into forbearance, they’re relieved from their monthly mortgage payment to Fannie Mae or Freddie Mac. However, in exchange for that break, they also agree not to evict tenants impacted by the pandemic.
“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,” says FHFA Director Mark Calabria. “To help those families still struggling to pay their rent and to help multifamily property owners maintain their properties, FHFA is extending the multifamily COVID-19 forbearance and tenant protections.”
How the multifamily forbearance extension works
Property owners with Fannie- or Freddie-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
- 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 include:
- Giving tenants at least a 30-day notice to vacate
- Not charging tenants late fees or penalties for nonpayment of rent
- Allowing tenant flexibility in the repayment of back-rent over time, and not necessarily in a lump sum.
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