Freddie Mac and Fannie Mae, the government agencies backing millions of mortgages, have extended their forbearance programs for apartment owners, helping to prevent renters who live in those properties from being thrown out.
Landlords with multifamily mortgages backed by the agencies can start a new or modified forbearance program until March 31, 2021 if they experience a coronavirus-related hardship. Originally, the program was set to expire December 31.
This helps renters in those properties because landlords who enter a forbearance program can’t evict their tenants solely for nonpayment of rent, can’t charge late fees or penalties for nonpayment, and must offer tenants the ability to repay back rent over time.
“Due to the continued presence of COVID-19 in our communities and its disproportionate impact on renters, FHFA will extend forbearance multifamily offerings and tenant protections beyond the end of the year and through the first quarter of 2021," Mark Calabria, director of the Federal Housing Finance Agency, which oversees the agencies, said in a statement.
While the forbearance program provides more protections to approximately 8.6 million households in 170,000 properties, it’s only a temporary relief for landlords and renters alike.
Program ‘helps reduce the cash crunch for landlords’
To receive a forbearance extension, landlords will have to inform tenants in writing about the renter protections afforded to them, including flexible repayment options, no late penalties, and at least a 30-day notice to renters to vacate.
“The extension of the forbearance program for landlords helps reduce the cash crunch for landlords who may be struggling to manage their own bills and expenses,” said Danielle Hale, chief economist at Realtor.com, a real estate listing site, “at a time when income may not be coming regularly because some tenants may not be able to pay rent on time or in full.”
Between 7 million and 14 million renter households in the U.S. are at risk of eviction, according to an analysis tool from Stout Risius Ross, a financial advisory firm, including properties not backed by the government agencies.
If President Trump signs the new stimulus bill legislation passed by Congress on Monday night, then renters across America who can demonstrate a financial hardship due to the pandemic can utilize the federal eviction moratorium through January 31.
“As the COVID-19 pandemic continues to affect communities across the United States, Fannie Mae is proud to extend forbearance options to protect multifamily tenants and assist property owners financially impacted by COVID-19,” said Michele Evans, executive vice president and head of multifamily in a statement. “The forbearance extension will continue to safeguard renters by suspending all evictions for nonpayment of rent and allow for flexible repayments, which will help keep people in their apartments.”