Multifamily property owners who are struggling to make mortgage payments due to the coronavirus pandemic now have a reprieve through the end of March for mortgages backed by Fannie Mae and Freddie Mac, the Federal Housing Finance Agency announced on Wednesday.
Forbearance options for multifamily mortgages backed by the GSEs were set to expire on Dec. 31, but the FHFA has extended that till March 31, 2021, provided landlords are also extending benefits to their renters. Landlords 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.
Eligible landlords must also:
- Allow the tenant flexibility to repay back rent over time and not in a lump sum;
- Not charge the tenant late fees or penalties for non-payment of rent; and
- Give the tenant at least a 30-day notice to vacate
“Due to the continued presence of COVID-19 in our communities and its disproportionate impact on renters, FHFA will extend forbearance multifamily offerings and tenant protections beyond the end of the year and through the first quarter of 2021,” said Director Mark Calabria.
A recent report by the Urban Institute found that approximately 12% of landlords with mortgages are in forbearances. Of those landlords, 20% are Black and 14% are Hispanic, while 9% are white.
For single-family mortgages, the U.S. forbearance rate increased last week for the second time in nearly six months from 5.48% to 5.49%, according to the Mortgage Bankers Association.
Single-family loans backed by Fannie Mae and Freddie Mac that were in forbearance decreased last week to 3.25% – a 1-basis-point improvement, though not as steep as the 8-basis-point decline the week prior.
The Federal Housing Administration announced on Monday that borrowers now have even longer to request deferred payments after extending the deadline for initial forbearance requests for FHA-backed mortgages to Feb. 28, 2021.
With the six-month grace period, plus a possible six-month extension, some FHA borrowers may be in forbearance into Feb. 2022.