The Federal Housing Finance Agency (FHFA) has announced that government-sponsored enterprises Fannie Mae and Freddie Mac will offer mortgage forbearance to multifamily property owners that suspend all evictions for renters unable to pay rent due to the impact of COVID-19.
The forbearance is available to properties with a performing multifamily mortgage backed by Fannie or Freddie. The eviction suspensions apply to non-payment of rent only, and would be in place for the entire time the mortgage is in forbearance.
“Renters should not have to worry about being evicted from their home, and property owners should not have to worry about losing their building, due to the coronavirus,” says Mark Calabria, FHFA director. “The multifamily forbearance and eviction suspension offered by the enterprises should bring peace of mind to millions of families during this uncertain and difficult time. The enterprises are working with mortgage servicers to ensure that these programs are implemented immediately so that property owners and renters experiencing hardship because of the coronavirus can get the assistance they need."
Fannie Mae and Freddie Mac lenders will be able to grant forbearance for up to three months for properties experiencing hardship due to COVID-19. The enterprises predict that their efforts will “provide relief” to up to 4.2 million renters across 27,000 properties.
“We are looking to provide relief to millions of families and communities who are affected by the devastating impact of COVID-19,” says Jeffery Hayward, executive vice president of multifamily for Fannie Mae. “We are well-positioned to react quickly in this situation thanks to the strength of our delegated model, the Delegated Underwriting and Servicing program. We want multifamily property owners and renters to know that we are here to help.”
Debby Jenkins, executive vice president and head of Freddie Mac Multifamily, adds: “This [forbearance] program is historic in its size, and it has the potential to provide relief to millions of families in multifamily rental homes financed through a Freddie Mac loan. Countless Americans are facing unimaginable hardships, and Freddie Mac is doing what we can to provide relief as our nation addresses this global pandemic.”
Last week, the National Multifamily Housing Council released a series of recommended principles for the apartment industry during the COVID-19 outbreak. They include halting evictions due to unpaid rent for 90 days, avoiding rent increases for 90 days, and creating payment plans for affected residents.
In response to the action, NMHC president Doug Bibby states: "We welcome the FHFA’s decision today to offer mortgage forbearance to multifamily housing property owners who suspend evictions for those who have been financially impacted by this public health emergency. This is a necessary step. Most property owners are small businesses, and they are committed to working with public officials and residents to keep families safe during this national crisis."
FHFA, Fannie Mae, and Freddie Mac will continue to monitor the impact of COVID-19 on the economy and the housing market. For further COVID-19 guidance, multifamily owners and operators can utilize the FHFA's Webpage on Coronavirus Actions, as well as Fannie Mae’s Multifamily COVID-19 Response Page.
