WASHINGTON, D.C. – The Federal Housing Finance Agency (FHFA) announced on December 23 that Fannie Mae and Freddie Mac (“the Enterprises”) will continue to offer COVID-19 forbearance to qualifying multifamily property owners through March 31, 2021. The Enterprise programs were set to expire on December 31.
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, the Enterprises have posted the tenant protections to their respective online multifamily property lookup tool websites. The property lookup tools make it easy for tenants to find out if the multifamily property in which they reside has an Enterprise-backed mortgage.
Meanwhile, the Federal Housing Administration (FHA) and the Department of Housing and Urban Development (HUD) announced an extension of its foreclosure and eviction moratorium through February 28, for homeowners with FHA-insured single-family mortgages covered under the CARES Act.
FHA’s moratorium prohibits servicers from initiating or proceeding with foreclosure and foreclosure-related eviction actions for FHA-insured single-family forward and reverse mortgages, except for those secured by legally vacant and abandoned properties.
The FHA encourages borrowers who can make their mortgage payments to continue to do so. “Those who are struggling financially because of COVID-19 should engaged with their mortgage servicer,” the agency advised. “FHA provides post-COVID-19 forbearance loss mitigation options to assist borrowers with bringing their mortgage current. FHA does not require a lump-sum payment at the end of any COVID-19 forbearance period.”