The Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac will offer multifamily property owners mortgage forbearance with the condition that they suspend all evictions for renters unable to pay rent due to the impact of coronavirus.
The eviction suspensions are in place for the entire duration of time that a property owner remains in forbearance. The forbearance is available to all multifamily properties with a Fannie Mae- or Freddie Mac-backed performing multifamily mortgage negatively affected by the coronavirus national emergency.
“Renters should not have to worry about being evicted from their home, and property owners should not have to worry about losing their building, due to the coronavirus. The multifamily forbearance and eviction suspension offered by the Enterprises should bring peace of mind to millions of families during this uncertain and difficult time," FHFA Director Mark Calabria said in a statement. “The enterprises are working with mortgage servicers to ensure that these programs are implemented immediately so that property owners and renters experiencing hardship because of the coronavirus can get the assistance they need."
The multifamily mortgage forbearance and eviction suspension programs are the latest actions that FHFA has announced to ensure the enterprises fulfill their missions during the coronavirus national emergency.
Other actions include:
- Suspending foreclosures and evictions for Enterprise-backed single-family mortgages at least 60 days
- Forbearance for enterprise-backed single-family borrowers facing hardship due to coronavirus
- Flexibilities for appraisal and employment verifications for single family homes
- Additional dollar roll transactions for the enterprises
National Multifamily Housing Council (NMHC) President Doug Bibby issued a statement in response to the FHFA's moves
"This crisis is testing all of us – every industry, every family. No one should lose the roof over their head during a pandemic," Bibby said. "That’s why our members are taking action and why NMHC proactively issued a series of principles to assist renters, including a halt to COVID-19 related evictions and the establishment of payment plans for residents who are unable to pay their rent because of the outbreak.... We welcome the Federal Housing Finance Agency’s decision today to offer mortgage forbearance to multifamily housing property owners who suspend evictions for those who have been financially impacted by this public health emergency. This is a necessary step. Most property owners are small businesses and they are committed to working with public officials and residents to keep families safe during this national crisis."
The news comes the same day that the Federal Reserve announced that it will buy $75 billion of Treasury securities and approximately $50 billion of agency mortgage-backed securities each business day this week as part of an unlimited effort to support financial markets. The Fed will also purchase agency commercial mortgage-backed securities.
The Fed had previous set a $700 billion limit for asset purchases.
The Mortgage Bankers Association was quick to applaud the Fed’s move.
“This will not only protect consumers by stabilizing mortgage rates for home purchases, but it will also help homeowners to refinance their loans and support multifamily real estate markets,” MBA President and CEO Bob Broeksmit, CMB, released the following statement regarding the Federal Reserve's announcement that it will said in a statement. “Both are powerful forms of stimulus for the economy, which have been slowed due to unprecedented market volatility.
“MBA looks forward to continuing to work with all policymakers and stakeholders, including Congress and the administration, to help consumers, lenders, and mortgage servicers,” Broeksmit added. “A critically important program will be to provide support to impacted homeowners through forbearance. In order for this to succeed, liquidity is required for the residential mortgage servicing sector, which can come from a Ginnie Mae program and the creation of a dedicated Federal Reserve liquidity facility.”