Fannie Mae and Freddie Mac: Implications of Forbearance and Eviction Moratoriums for Multifamily Lenders, Borrowers

Description

FHFA and the government-sponsored lenders it oversees have issued several directives to support multifamily housing markets during the COVID-19 pandemic. These directives include underwriting, closing, and servicing Fannie and Freddie loans with which borrowers, lenders, and their counsel must comply.

Under the CARES Act, multifamily landlords were temporarily prohibited from evicting residents occupying units in all federally backed properties for nonpayment of rent. The CDC subsequently prohibited eviction of tenants who have experienced economic hardship due to the pandemic. The CARES Act granted Fannie and Freddie borrowers the ability to obtain up to three months of forbearance, which has since been extended to six months for eligible borrowers, and additional relief is likely forthcoming.

Fannie and Freddie lenders and servicers must navigate evolving COVID-19 guidance to document forbearance agreements and ensure that borrowers comply with loan terms and eligibility requirements. Lenders and servicers also must submit periodic loan monitoring information to Fannie and Freddie in connection with loans in forbearance. Perhaps most importantly, the parties must understand the changes to their financing terms once the forbearance and eviction moratoriums are no longer in effect.

Listen as our authoritative panel discusses the impact of forbearance and eviction restrictions on multifamily loans and the next steps for borrowers and lenders when these initiatives are no longer in effect.