FHFA to Offer Multifamily Owners Forbearance to Help Prevent Evictions
As more and more Americans are being forced to stay indoors (and out of work) due to COVID-19, the federal government has started creating new programs designed to protect both the owners of multifamily properties and the renters who rent from them.
On March 23, 2020, the Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac will begin offering multifamily property owners mortgage forbearance, on the condition that the property owners suspend all evictions for renters who find themselves suddenly unable to make rent payments because of the current circumstances. This new program applies to all mortgages backed by Fannie Mae or Freddie Mac, and in situations where the mortgage is “negatively affected by the coronavirus national emergency.” In sum, Fannie Mae and Freddie Mac will not initiate foreclosure proceedings against multifamily properties where the renters are unable to remit their monthly payments to the property owner due to the coronavirus. The eviction suspensions are in place for the entire duration of time that a property owner remains in forbearance.
According to the release put out by the FHFA, Fannie Mae and Freddie Mac are working with mortgage servicers to implement the new measures immediately. There is no indication that these programs have yet been implemented, however. We encourage all multifamily property owners to stay apprised of the latest developments and to consult with their attorneys regarding any questions they may have with respect to these fast-evolving developments.