The Federal Housing Finance Agency announced that Fannie Mae and Freddie Mac are allowing servicers to extend forbearance agreements for multifamily property owners with existing forbearance agreements for up to three months, totaling forbearance up to six months, according to the government agency.
“During the pandemic, FHFA has been focused on protecting renters and borrowers while ensuring the mortgage market functions as efficiently as possible,” said FHFA Director Mark Calabria. “The multifamily mortgage forbearance extension announced today will help renters stay in their homes and help property owners retain their properties.”
Fannie Mae and Freddie Mac Multifamily announced Monday that the companies had created three additional forbearance options to assist multifamily borrowers who have been impacted by COVID-19. Those options also extend tenant protections.
The options include delaying the start of the repayment period following forbearance; an extension of the repayment period; and, an extension of the forbearance period with an optional extended repayment period.
“Many borrowers are still facing hardship even though they may soon exhaust the 90-day forbearance granted in the initial iteration of our COVID-19 relief program,” said Debby Jenkins, executive vice president and head of Freddie Mac Multifamily. “These additional relief options will provide more flexibility to borrowers and extend tenant protections for renters who also continue to struggle with the economic effects of the pandemic.”
According to Freddie Mac, any extension of the forbearance period will also extend the prohibition on evicting tenants solely for nonpayment of rent, which was part of its original forbearance program established in response to Hurricane Harvey in 2017.
“Borrowers with loans with a forbearance agreement in place may not charge tenants late fees or penalties solely because of the nonpayment of rent during the forbearance period or the borrowers’ repayment period,” the announcement said.
“The forbearance program also requires borrowers to provide flexibility to tenants, allowing the repayment of back rent over time and not in a lump sum,” the announcement continued. “Finally, taking advantage of the new protections announced today will also require borrowers (subject to any prohibitions under local law) to provide 30-days’ notice to tenants prior to any eviction taking place during the repayment period.”
[This article has been updated to include the extension of multifamily forbearance programs outlined by the FHFA and Fannie Mae, in addition to the original article which featured Freddie Mac.]