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GSE Forbearance Extended for Multifamily Property Owners
The FHFA has announced the third extension for Covid-19 forbearance, now expected to remain in place until September 30, 2021.
While lenders and investors are eagerly anticipating some form of normalcy to return, the big players are making moves and doing their part to see that return through. Some of the biggest players, the Government Sponsored Entities (GSEs) Fannie Mae and Freddie Mac, are excellent examples of who to really monitor at this time.
As the dust begins to settle on the pandemic, there seems to be a ton of hustle and bustle over at the multifamily branches of Fannie Mae and Freddie Mac. For starters, there has been a third (and possibly final) extension to Covid-19 tenant protections. The official word on the matter is that mortgage giants will continue to offer Covid-19 forbearance to qualifying multifamily property owners through September 30, 2021, according to the FHFA Director, who confirmed as much in a statement addressing the decision:
“While COVID-19 cases are declining and many homeowners continue to emerge from forbearance, many renters, who are unable benefit from rising home prices, have not financially recovered from the pandemic. To help those families still struggling to pay their rent and to help multifamily property owners maintain their properties, FHFA is extending the multifamily COVID-19 forbearance and tenant protections through the end of September 2021,” - FHFA Director Mark Calabria
Effectively, this means that multifamily property owners with Freddie Mac or Fannie Mae financing have until the end of September to enter a new or modified (if eligible) forbearance if they can prove financial hardship due to the Covid-19 pandemic. Any property owner who enters into a forbearance agreement is required to inform tenants, in writing, of all tenant protections that are in place during the property owner’s forbearance and repayment period. This includes an agreement to suspend all nonpayment of rent eviction activity for the entire duration of the forbearance period.
Furthermore, tenants are to be given notice to vacate at least 30 days prior to the expected execution date, and the property owner must not charge late fees or penalties for nonpayment of rent. Additionally, tenants are to be granted some flexibility in regards to the repayment of the back-rent owed.