The Federal Housing Finance Agency (FHFA) announced on March 23, 2020 that, in order to keep renters living in multifamily properties in their homes and to support multifamily property owners during the coronavirus national emergency, Fannie Mae and Freddie Mac (referred to as the Enterprises) will offer multifamily property owners mortgage forbearance with the condition that they suspend all evictions for renters unable to pay rent due to the impact of coronavirus.
Director Mark Calabria said “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. The Enterprises want 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.”
Forbearance is available all for multifamily housing properties with an “Enterprise-backed performing multifamily mortgage” that is financially impacted by coronavirus WITH THE CONDITION THAT the eviction suspensions are in place for the entire duration of time that a property owner remains in forbearance.
Property owners should take note that this is a forbearance on the mortgage, not a forgiveness. Therefore, owners should plan for and prepare that when the crisis has passed, the forbearance amount will be owed, and it will be up to the owners to collect on any past due rents. This may cause a cash flow issue for the property owners at that time.
The multifamily mortgage forbearance and eviction suspension programs are the latest actions that FHFA has announced to ensure the Enterprises fulfill their missions during the coronavirus national emergency. Other actions include:
- Suspending foreclosures and evictions for Enterprise-backed single-family mortgages at least 60 days;
- Forbearance for Enterprise-backed single-family borrowers facing hardship due to coronavirus;
- Flexibilities for appraisal and employment verifications for single family homes; and
- Additional dollar roll transactions for the Enterprises.