The extension relates to multifamily owners having a Fannie- or Freddie-held mortgage in forbearance. (FHFA) The loans can now be extended if owners agree to not evict tenants. The Federal Housing Finance Agency (FHFA) extended a forbearance program for multifamily owners, saying it would like to support them and “help renters in multifamily properties stay in their homes.”
FHFA Lengthens Tenant Eviction Protection to Six Months
FHFA’s extension is applicable to multifamily property owners that have a Fannie Mae- or Freddie Mac-held mortgage in forbearance. Within the extension, owners having an existing forbearance agreement can extend it for an additional 90 days for up to a total of six months.
Qualified properties are ones that experienced a financial hardship as a result of coronavirus national emergency. In an extended forbearance, the borrower may receive up to Two years to make up their missed payments as soon as the forbearance period ends.
FHFA places limitations on multifamily owners while their property is in forbearance, however, including one about evictions. If the forbearance is extended, the schedule modified, or a new forbearance agreement executed, the borrower must supply the following tenant protections throughout the repayment period:
Give the tenant a minimum of a 30-day notice to vacate
Not charge the tenant late fees or penalties for nonpayment of rent
Allow the tenant flexibility to repay back rent over time but not in a lump sum
“The multifamily mortgage forbearance extension announced today will help renters stay in their homes and help property owners retain their properties,” FHFA Director Mark Calabria says.
FHFA says it will keep monitoring the coronavirus’ effect on renters, borrowers as well as the mortgage market, suggesting more updated policies are possible.
To be familiar with government protections and assistance, check out the joint Department of Housing and Urban Development, FHFA, as well as the Consumer Financial Protection Bureau website at cfpb.gov/housing.
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