Freddie Mac Multifamily has again extended its COVID-19 forbearance program deadline, allowing borrowers to request a new forbearance agreement until September 30. The extension adds three months to the previous deadline of June 30.
The COVID-19 forbearance program allows borrowers who have properties that are financed with a Freddie Mac Multifamily fully performing loan to defer their loan payments if they have experienced hardship due to the health crisis. Borrowers can also request additional relief at the end of the initial forbearance period.
Those who enroll in the program also have to notify their residents of several renter protections, including a moratorium on evictions during the forbearance period. In addition, renters in properties where borrowers are in forbearance for a Freddie Mac Multifamily loan can’t be charged late fees, penalties, or other charges due to not paying rent during the forbearance or repayment period.
The program also allows renters flexibility to pay their unpaid rent over a period of time and not in a lump sum and requires borrowers to give a 30-day notice before any renter eviction during the forbearance period.
While borrowers have to show hardship to qualify for the forbearance program, renters do not have to prove any COVID-19-related hardship to receive the protections.
Forbearances trending down
Debby Jenkins, executive vice president & head of Multifamily for Freddie Mac, said in prepared remarks that the COVID-19 forbearance program was first implemented in March 2020 to give borrowers more time to request forbearance while also ensuring tenant protections. In April 2020, Freddie Mac decided to extend its forbearance program’s deadline to December 31, 2020. The December deadline was then extended again to March 31, 2021.
One year after the program’s launch, the number of new or additional forbearance requests dropped to five, according to Freddie Mac’s April 2021 forbearance report.
The report also showed that 22 loans ended their forbearance in April, and 82.8 percent of loans whose forbearance ended in April or earlier are currently making payments or have fully repaid their forborne payments. There are still 1,154 forborne securitized loans totaling $7.3 billion as of April 26, according to the report.