The Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac would continue to offer COVID-19-related forbearance. The program, which was set to expire Sept. 30, is offered to multifamily property owners who extend that forbearance period to their tenants.
The latest extension marks the fourth such action for the program. The FHFA announced that beginning Oct. 1, the government-sponsored enterprises can continue offering forbearance until instructed otherwise.
"Given the uncertain nature of this pandemic, FHFA is taking further action to protect renters, property owners, and the mortgage market," FHFA Acting Director Sandra Thompson said.
If you are looking for options for your multifamily property, talk to your mortgage servicer to see if a forbearance program is right for you. Some landlords may also be able to take out a mortgage refinance to permanently lower their monthly payments amid today’s historically low interest rates. Visit Credible to find your personalized rate and see how much you could save.
How to qualify for forbearance
Property owners whose multifamily mortgage loan is backed Fannie Mae or Freddie Mac can now continue to qualify for new or modified forbearance if they have experienced financial hardship due to the COVID-19 pandemic. However, they must also extend relief to their eligible tenants, which includes:
- Informing them in writing about their protections and the landlord’s forbearance and repayment periods
- Agreeing not to evict due to rent nonpayment if they are in the forbearance period
"As financial and economic uncertainties around COVID-19 persist, Fannie Mae is committed to providing continued forbearance options for Fannie Mae multifamily borrowers," said Michele Evans, Fannie Mae executive vice president and head of multifamily. "This will allow for the continuation of essential tenant protections to help keep renters in their apartments as the recovery process continues."
Landlords can also consider refinancing their mortgage to help lower their mortgage payments. By comparing multiple lenders at once, they can choose the lender with the best mortgage rates for them. Visit Credible’s online marketplace to get started.
Additional tenant protections
There are also additional protections that multifamily landlords must provide their tenants while they are in forbearance. Some of these include:
- When an eviction is necessary, giving the tenant a 30-day notice to vacate
- Not charging late fees or penalties when rent isn’t met
- Allowing flexibility for payback of rent and not requiring a lump sum payment
"As the pandemic continues, Freddie Mac is providing relief where needed to the multifamily market and to renters financially impacted by COVID-19 through this forbearance program," said Debby Jenkins, Freddie Mac head of multifamily. "While we have seen only a few loans start a new forbearance program recently, we remain positioned to support the market and renters who may be impacted by the unpredictability of the pandemic going forward."
If landlords of multifamily properties are struggling to make their payments, they can consider these forbearance options. However, in today’s low mortgage rate environment, they can refinance their mortgage to lower their costs. Contact Credible to speak to a home loan expert and get all of your questions answered.
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