The Federal Housing Finance Agency (FHFA) announced on June 29 that Fannie Mae and Freddie Mac (the Enterprises) will allow mortgage servicers to extend forbearance agreements for up to an additional three months for multifamily property owners that have existing forbearance agreements. Current forbearance agreements were originally limited to three months. New forbearance agreements are available for borrowers who did not previously seek forbearance.
While in forbearance, a landlord must suspend evictions for renters unable to pay rent. During the repayment period, a borrower must:
- Not charge tenants late fees or penalties for nonpayment of rent;
- Allow tenants flexibility to repay back rent over time and not in a lump sum; and
- Give tenants at least a 30-day notice to vacate.
These tenant-eviction protection provisions are identical to those in Section 4024 of the CARES Act (see below).
Section 4023 of the CARES Act provides for mortgage payment forbearance. Forbearance is available for properties with an Enterprise-backed multifamily mortgage that are experiencing financial hardship due to the coronavirus pandemic. If forbearance is extended by a mortgage servicer, once the forbearance period concludes, a borrower may qualify for up to 24 months to repay missed payments. Note that the announcement does not urge owners to establish repayment plans for tenants for up to 24 months while the owner has a reprieve from paying their mortgage. Note also that in order to obtain forbearance, a mortgage servicer must agree to provide it to the borrower.
HUD also implemented mortgage-payment-relief guidance under the CARES Act on April 10 for borrowers with multifamily mortgages insured by the Federal Housing Administration (FHA). HUD’s Office of Multifamily Housing (Multifamily) posted on July 2, Notice H 20-07 “Coronavirus Aid, Relief, and Economic Security (CARES) Act Eviction Moratorium” dated July 1. Multifamily also posted a brochure, “Promoting Housing Stability During the COVID-19 National Emergency: Information for Multifamily Property Owners and Management Agencies.” NLIHC will describe these two documents in the next issue of Memo.
Those Section 4023 forbearance provisions might be confused with the Section 4024 temporary moratorium on evictions that provides a 120-day federal moratorium on certain evictions between March 27 and July 25. Landlords of “covered properties” are prohibited from filing a new eviction for tenants who do not pay rent during the 120-day period. Landlords are also prohibited from charging tenants fees or interest for late payment during this period. After July 25th, a landlord can begin eviction proceedings for non-payment, but must give a tenant 30 days’ notice. Tenants must still eventually pay rent owed over this 120-day period.
Landlords who receive forbearance for federally backed multifamily mortgage loans or FHA-insured loans must have renter protections identical to those of Section 4024 for the duration of the forbearance. Tenants in multifamily properties whose owners already have Section 4023 forbearance may be protected from eviction beyond July 25, 2020, and tenants will certainly be protected beyond July 25 if the owner of their building secures a new forbearance agreement or extended forbearance.
Section 4024 defines a “covered property” as one that: 1) participates in a “covered housing program” as defined by the Violence Against Women Act (VAWA); 2) participates in the “rural housing voucher program under section 542 of the Housing Act of 1949”; 3) has a federally backed mortgage loan; or 4) has a federally backed multifamily mortgage loan.
VAWA-covered housing programs include:
Section 8 Housing Choice Voucher program
Section 8 project-based housing
Section 202 housing for the elderly
Section 811 housing for people with disabilities
Section 236 multifamily rental housing
Section 221(d)(3) Below Market Interest Rate (BMIR) housing
Housing Opportunities for Persons with AIDS (HOPWA)
McKinney-Vento Act homelessness programs
Section 515 Rural Rental Housing
Sections 514 and 516 Farm Labor Housing
Section 533 Housing Preservation Grants
Section 538 multifamily rental housing
Low-Income Housing Tax Credit (LIHTC)
The eviction moratorium also extends to “the rural housing voucher program under Section 542 of the Housing Act of 1949.” The separate inclusion of this program was necessary because the Rural Housing Voucher Program was omitted from the covered housing programs in the 2013 VAWA reauthorization statute.
Although the CARES Act does not include the national Housing Trust Fund (HTF), HUD has included Section 4024 provisions to it.
NLIHC and the Public and Affordable Housing Research Corporation (PAHRC) have created a searchable database and map for renters to identify whether their home is covered by the CARES Act eviction moratoriums. The tool has data on millions of apartments in multifamily housing insured by FHA or securitized by Fannie Mae or Freddie Mac, and millions more supported by the Low-Income Housing Tax Credit, HUD, and/or USDA programs.
The database is at: https://nlihc.org/federal-moratoriums
Fannie Mae’s property look up is at: https://www.knowyouroptions.com/rentersresourcefinder
Freddie Mac property look up is at: https://myhome.freddiemac.com/renting/lookup.html
HUD’s FHA property look up is at: https://bit.ly/2NLHKts
HUD’s Office of Multifamily Housing Programs look up is at: https://bit.ly/3gejfRY
The FHFA announcement is at: https://bit.ly/2Be5EeJ
More information is available on a joint FHFA, HUD, and Consumer Financial Protection Bureau (CFPB) website: https://bit.ly/2YIpzLE
Notice H 2020-07 “Coronavirus Aid, Relief, and Economic Security (CARES) Act Eviction Moratorium” is at: https://bit.ly/2YTaneI
“Promoting Housing Stability During the COVID-19 National Emergency: Information for Multifamily Property Owners and Management Agencies” is at: https://bit.ly/31FbLDI