The Federal Housing Finance Agency (FHFA) has announced that Fannie Mae and Freddie Mac will extend protections indefinitely for multifamily owners and renters experiencing financial difficulties due to the COVID-19 pandemic.
The government-sponsored enterprises (GSE) will continue to offer the COVID-19 forbearance programs to qualified borrowers. This is the fourth extension of the forbearance programs, which had previously been set to terminate on Sept. 30.
“Given the uncertain nature of this pandemic, FHFA is taking further action to protect renters, property owners, and the mortgage market,” said FHFA acting director Sandra L. Thompson.
Multifamily owners with mortgages backed by Fannie Mae or Freddie Mac can enter a new or modified forbearance agreement if they have experienced a pandemic-related hardship. With a forbearance plan, owners must agree not to evict residents solely for the nonpayment of rent. Owners must also inform residents in writing about tenant protections during the forbearance or repayment periods. These include providing residents with at least 30-day notice to vacate, allowing flexibility to repay back rent over time and not necessarily in a lump sum, and not charging late fees or penalties for nonpayment of rent.
“As the pandemic continues, Freddie Mac is providing relief where needed to the multifamily market and to renters financially impacted by COVID-19 through this forbearance program,” said Debby Jenkins, head of Freddie Mac Multifamily. “While we have seen only a few loans start a new forbearance program recently, we remain positioned to support the market and renters who may be impacted by the unpredictability of the pandemic going forward.”
According to Freddie Mac, its most recent report finds that there are 304 forborne securitized loans, representing about 1.1% of its total securitized loans as measured by unpaid principal balance. However, in recent months, very few loans have started a new forbearance agreement and no new forbearances were started in August, a first for the program, said the GSE.
In addition to the forbearance program, Freddie Mac has established several tools to assist borrowers and renters, including a loan lookup tool to help renters understand whether they reside in a property that has a loan purchased or securitized by the GSE and a hotline staffed by Department of Housing and Urban Development-certified counselors for those facing financial distress.
Since March 2020, Fannie Mae also has taken actions to help renters facing financial hardships, including extending eviction protections when a property owner received forbearance and the creation of its Renters Resource Finder tool.
“As financial and economic uncertainties around COVID-19 persist, Fannie Mae is committed to providing continued forbearance options for Fannie Mae multifamily borrowers,” said Michele Evans, executive vice president and head of multifamily for the GSE. “This will allow for the continuation of essential tenant protections to help keep renters in their apartments as the recovery process continues.”
