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About $10.4 Billion in Freddie Mac, Fannie Mae Loans Is Still in Forbearance
A three-month extension on paying back loans is the latest step the Federal Housing Finance Agency has taken to benefit property owners, renters, and the mortgage market during the pandemic.
The Federal Housing Finance Agency said Fannie Mae and Freddie Mac will continue to offer COVID-19 forbearance to qualifying multifamily property owners through Sept. 30.
The program, which requires landlords to suspend all evictions for renters unable to pay rent during the forbearance period, was formerly set to expire at the end of June.
Fannie Mae still had 215 multifamily loans in forbearance as of May 27 totaling $3.14 billion, an amount that is now less than 1% of its total multifamily loans outstanding. Of that amount, $668 million was in extended forbearance periods. And borrowers on another $277 million have requested an extension.
Freddie Mac reported 1,154 forborne loans totaling $7.3 billion as of April 26. This equates to 2.1% of the outstanding securitized unpaid principal balance and 4.3% of the total Freddie Mac securitized loan population by loan count. Freddie Mac said that $1.07 billion of the total was in extended forbearance.
The extension provides additional time for multifamily operators experiencing hardship because of the pandemic to request a new forbearance agreement. For those borrowers continuing to experience hardship, they may also request additional relief if their initial forbearance period ends before the end of September.
“While COVID-19 cases are declining and many homeowners continue to emerge from forbearance, many renters, who are unable [to] benefit from rising home prices, have not financially recovered from the pandemic,” Mark Calabria, director of the FHFA, said in a statement Thursday.
Property owners that enter into a new or modified forbearance agreement must:
- Inform tenants in writing about tenant protections available during the property owner’s forbearance and repayment periods.
- Agree not to evict tenants solely for the nonpayment of rent while the property is in forbearance.
Additional renter protections apply during the repayment periods. These include:
- Giving tenants at least a 30-day notice to vacate.
- Not charging tenants late fees or penalties for nonpayment of rent.
- Allowing tenant flexibility in the repayment of back rent over time, and not necessarily in a lump sum.