Immediate, Temporary Mortgage Relief for Multifamily Rental Owners Impacted by COVID-19
On March 23, 2020, the Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac intend to offer mortgage forbearance for multifamily rental property owners that have been adversely affected by the COVID-19 (Coronavirus) pandemic. These forbearance programs will allow owners of COVID-19 impacted multifamily rental properties to stabilize operations at projects suffering from rental payment delinquencies and other economic distress arising from the pandemic.
While the Fannie Mae and Freddie Mac forbearance programs will differ slightly, major highlights of the forbearance programs include:
- An agreement by the Fannie Mae or Freddie Mac lender to refrain from foreclosure or exercising remedies for a period of up to three (3) months upon demonstrating financial hardship and owner’s agreement to suspend evictions of financially impacted tenants for the greater of ninety (90) days or the date the mortgage loan is brought current.
- An agreement by Fannie Mae or Freddie Mac to waive late charges during the forbearance period.
- A requirement that the project owner bring the mortgage loan current by the twelve (12) month anniversary of the forbearance agreement date or the date the owner receives business income / business interruption/rent loss insurance proceeds, whichever is earlier.
- A requirement that the owner allow impacted tenants to repay missed rent payments over a twelve (12) month period, without late charges.
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