Fannie Mae and Freddie Mac have extended their COVID-19 mortgage forbearance programs for multifamily landlords through March 31, 2021, providing more flexibility for struggling property owners as well as protections for renters at a time of continuing stress for the industry.
The programs were due to expire Thursday, December 31, before the extensions announced by the Federal Housing Finance Agency (FHFA) last week. The move gives multifamily operators more time to request new or supplemental forbearance agreements if they are facing pandemic-related financial hardship.
Under the policy, renters may not be evicted solely for nonpayment of rent while the property is in forbearance; they must be given 30 days’ notice of any eviction; and they must be allowed to repay back rent over a period of time rather than in a lump sum.
The FHFA’s announcement came in the same week that the federal government provided more protections for cash-strapped renters. Yesterday, President Donald Trump signed a $2.4 trillion spending and stimulus package that includes $25 billion in rental assistance and a one-month extension of the Center for Disease Control (CDC)’s nationwide eviction moratorium through January 31.
Freddie Mac launched its COVID-19 forbearance program for multifamily borrowers on March 24, updated the program in mid-April and expanded it at the end of June with supplemental relief options for landlords. The program is accessible to borrowers across more than 27,000 properties with roughly 4.2 million renters—that is, all the properties that currently have performing Freddie Mac loans.
In its own announcement on the latest extension of the program, Freddie Mac Multifamily detailed additional renter protections, including a ban on charging renters late fees for nonpayment of rent during the forbearance or repayment period. Rental payments will continue to accrue, but renters in the effected properties must be given flexibility in the repayment of back rent.
Renters are not required to show any coronavirus-related hardship to be covered by these protections, according to the statement. Similar rules apply to the forbearance program offered by fellow government-sponsored enterprise Fannie Mae. In both cases, property owners must inform residents in writing about the protections available to them.
Industry gets relief
The Consolidated Appropriations Act of 2021, signed into law on Sunday, encompasses $900 billion in coronavirus relief and $1.4 trillion in government spending. The legislation includes several measures that benefit apartment firms, including $3.5 billion for Community Development Block Grants, $1.35 billion for the HOME Investment Partnership Program and $13.5 billion for Project-Based Rental Assistance, according to a statement last week by the National Multifamily Housing Council (NMHC).
The package also provides $25 billion to the Treasury Department for a new Emergency Rental Assistance program, along with various measures expected to shore up household finances, including $300 in federal unemployment assistance through March 14 and direct payments of $600 to individuals earning up to $75,000 per year and married couples earning up to $150,000 per year.
Many Americans continue to struggle with rent payments as the economic damage triggered by the coronavirus persists. The U.S. unemployment rate dropped to 6.7 percent in November but remains elevated compared the February rate of 3.5 percent before the onset of the pandemic.
NMHC found that 89.8 percent of households made a full or partial rent payment by December 20, based on a survey of 11.5 million professionally managed apartment units across the country. That figure was down by 3.4 percentage points, or 392,952 households, compared to the share who paid rent through December 20, 2019.