Landlords with certain federally-backed mortgages can now defer payments through September as long as they continue to suspend evictions for struggling renters. The forbearance program was previously set to expire on June 30.
“While COVID-19 cases are declining and many homeowners continue to emerge from forbearance, many renters, who are unable benefit from rising home prices, have not financially recovered from the pandemic," said Mark Calabria, director of the Federal Housing Finance Agency (FHFA), which oversees Fannie Mae and Freddie Mac mortgages, in a statement. "To help those families still struggling to pay their rent and to help multifamily property owners maintain their properties, FHFA is extending the multifamily COVID-19 forbearance and tenant protections."
Landlords with properties backed by Fannie Mae or Freddie Mac can enter a new or modified forbearance plan if they experience a COVID-19 financial hardship. If they do, they must inform their renters about tenant protections related to the forbearance and repayment plan and agree to not evict renters for nonpayment of rent while the property is in forbearance.
During the repayment period, landlords must also give renters at least 30 days advanced notice to vacate, refrain from charging late fees or penalties for not paying rent, and provide flexibility for renters who need to pay back-rent over time.
More than 6 million renting households report being behind on rent and are at increased risk of eviction, according to the National Low Income Housing Coalition.
The forbearance extension — the third one during the pandemic — comes a day after the U.S. Court of Appeals for the District of Columbia temporarily suspended a lower court's ruling that would have overturned the eviction moratorium established by the Centers of Disease Control and Prevention.
"The Biden administration should continue to vigorously defend, enforce, and extend the moratorium until the historic emergency rental assistance funds provided by Congress reach the renters who need them to remain stably housed," NLIHC President and CEO Diane Yentel said in a statement on Wednesday following the ruling.
So far, Congress has provided $46.5 billion in emergency rental assistance to state and local governments that are working to distribute the relief to renters in need.