- Federal Housing Finance Agency just announced extension on multifamily forbearance for three more months
- Mandate ONLY applies to properties with loans secured by Fannie Mae & Freddie Mac
- Mandate provides rent relief for SOME tenants in at least a dozen states where eviction proceedings already in motion
The Aspen Institute estimated some 19 – 23M renters, or one in five of the 110M renter households in the US, could be at risk of eviction by the end of September this year. This estimate was based upon the more than 44M workers who have filed jobless claims in just four months and the fact that the enhanced unemployment payments of $600/week are set to expire at the end of July.
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Needless to say, a collective sigh of relief from renters and landlords alike nearly became audible when the Federal Housing Finance Agency (FHFA) announced a three-month extension of multifamily loan forbearance on complexes with Fannie Mae or Freddie Mac mortgages.
Originally, loan forbearance on multifamily properties was set to expire July 25. Now, according to FHFA director Mark Calabria, loan forbearance on properties with mortgages held by Fannie Mae and Freddie Mac is extended for three months. Calabria said, “During the pandemic, FHFA has been focused on protecting renters and borrowers while ensuring the mortgage market functions as efficiently as possible. The multifamily mortgage forbearance extension announced today will help renters stay in their homes and help property owners retain their properties.”
This new FHFA mandate includes the following:
- Multifamily property owners may qualify for payment plan of up to two years after the end of forbearance
- Owners must give tenants at least a 30-day notice to vacate property after the end of forbearance
- Owners NOT to charge tenants late fees of other penalties for rent nonpayment
- Owners must allow tenants flexibility in paying any missed rent.
Though Fannie and Freddie have digital tools to help renters determine whether or not their building is financed through a government-secured mortgage, helping renters determine whether or not their landlord is receiving loan forbearance is much more difficult as there are no accountability or transparency tools built into this forbearance process. Renters can only rely upon information their landlord tells them.
States with the LEAST amount of renter protections include the following, according to the Eviction Lab at Princeton University and Columbia Law School professor Emily Benfer’s eviction scorecard:
Thanks to Forbes, MarketWatch and the Washington Post.