Apr 17

Freddie Mac Extends Multifamily Loan Forbearance Options

Freddie Mac Extends Multifamily Loan Forbearance Options

Mortgage financing giant Freddie Mac announced several changes on Wednesday to its COVID-19 protection options for tenants and landlords. Its program provides three months of forbearance for borrowers impacted by the pandemic. It also has a no-evictions policy for tenants during that forbearance period. Fannie Mae has announced similar protections.

Newly announced changes to Freddie Mac’s assistance is aimed at bringing it in line with CARES Act provisions, which were made after the GSE had first announced its protections in the early days of the outbreak.

Among the changes, tenants no longer have to demonstrate their nonpayment of rent is due to a COVID-19 related hardship.

Multifamily landlords who have properties financed with a Freddie Mac loan can defer their loan payments for 90 days by proving a hardship as an impact of the COVID-19 pandemic and by getting lender approval. In return, Freddie Mac is requiring landlords not to evict tenants for nonpayment during forbearance periods.

If a borrower enters forbearance, Freddie Mac restricts the ability to evict, give notice of, or start an eviction of a tenant for nonpayment during the forbearance period. Late fees, penalties, or other charges cannot be added on to the tenant for nonpayment of their rent while in the forbearance period, as required by the CARES Act.

The forbearance program has also been extended, under Freddie’s new guidance. The last day to enter the forbearance under the program was extended to Dec. 31, or the date that the federally declared emergency period ends, whichever comes first. Freddie Mac had previously set the program to expire on Aug. 1.

“Our forbearance program is helping borrowers and tenants who are facing hardship as a result of COVID-19,” says Deborah Jenkins, executive vice president and head of Multifamily for Freddie Mac. “The program has already proved to be an important source of relief for multifamily operators and residents who are struggling financially as a result of this national crisis.”

The program is available to borrowers across more than 27,000 properties that have Freddie Mac loans. About 4.2 million U.S. renters reside in those properties.

View the multifamily response from Fannie Mae.

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