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Financial Services Law Insights and Observations

FHFA extends Covid-19 multifamily forbearance

Federal Issues FHFA Covid-19 Mortgages Forbearance

Federal Issues

On September 24, FHFA announced that Fannie Mae and Freddie Mac (GSEs) will continue to offer Covid-19 forbearance to qualified multifamily property owners. The forbearance options for GSE-backed multifamily mortgages were set to expire September 30, but have been extended for the fourth time. Eligible multifamily property owners that enter into new or modified forbearance agreements are required to (i) “[i]nform tenants in writing about tenant protections available during the property owner’s forbearance and repayment periods”; and (ii) “[a]gree not to evict tenants solely for the nonpayment of rent while the property is in forbearance.” Additionally, property owners must also provide a tenant at least 30-days’ notice to vacate, may not charge a tenant late fees or penalties for nonpayment of rent, and must allow a tenant flexibility to repay back rent over time and not in a lump sum.

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