New Mortgage Forbearance Options for Enterprise-backed Multifamily Properties
In an email alert to National Apartment Association (NAA) members, sent Tuesday, June 30, Bob Pinnegar, NAA President and CEO, reported that Fannie Mae and Freddie Mac (the Enterprises) are allowing multifamily loan borrowers with existing forbearance agreements to extend the total forbearance period for up six months total. The forbearance extension is available for property owners of qualified properties with an Enterprise-backed multifamily mortgage experiencing a financial hardship due to the coronavirus national emergency.
As before, property owners are prohibited from evicting residents in covered properties due to nonpayment of rent during the forbearance period. Unlike borrowers, residents are not required to show COVID-19 related financial hardship.
The FHFA’s announcement also adds new owner and renter protections that apply during the repayment period. Once forbearance concludes, owners of properties with forbearance agreement extensions may qualify for up to 24 months to repay missed payments. Forbearance extensions, repayment schedule modifications and new forbearance agreements result in the following requirements during the repayment period:
- Residents must be given at least a 30-day notice to vacate;
- Borrowers must suspend late fees or penalties for nonpayment of rent; and
- Borrowers must allow residents the flexibility to repay outstanding balances over time and not in a lump sum.
The NAA is working with Congress and federal agencies to protect the stability and viability of the rental housing industry and are pressing for emergency rental assistance as the best solution to the challenges facing rental housing. As part of their advocacy efforts the NAA is communicating to policy leaders that extended eviction moratorium does nothing to keep renters stably housed or steady the nation’s rental housing stock.
AAA members can help amplify the NAA’s message to federal policymakers. Contact NAA here to learn more about how you can help. For more information you can also contact Paul Cauduro, AAA Government Relations Director at email@example.com