Good news for renters.
The Federal Housing Finance Agency announced Monday that Fannie Me and Freddie Mac are allowing mortgage servicers to extend forbearance agreements for multifamily property owners during the coronavirus pandemic.
The announcement applies to existing owners with existing forbearance agreements, bringing the total forbearance – or pause in paying mortgage payments – to up to six months.
“During the pandemic, FHFA has been focused on protecting renters and borrowers while ensuring the mortgage market functions as efficiently as possible,” FHFA Director Mark Calabria said. “The multifamily mortgage forbearance extension announced today will help renters stay in their homes and help property owners retain their properties.”
While the properties are in forbearance, landlords must suspend all evictions for renters unable to pay rent. The forbearance extension is available for qualified properties with Fannie or Freddie-backed multifamily mortgage experiencing a financial hardship due to the coronavirus national emergency.
If a forbearance is extended, once the forbearance period concludes the borrower may qualify for up to 24 months to repay the missed payments. Additionally, if the forbearance is extended, the repayment schedule is modified, or a new forbearance agreement is executed, the borrower is required to provide the following tenant protections during the repayment period:
- Give the tenant at least 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 and not in a lump sum.
FHFA said it will continue to monitor the coronavirus pandemic and update policies as needed.