Freddie Mac extends multifamily loan forbearance relief to landlords
Over 1K mortgages totaling $6.4B were in deferral as of May
Freddie Mac is expanding the mortgage relief options it offers multifamily property owners, but there are strings attached.
The agency, which is under government conservatorship, today announced that landlords with federally-backed mortgages can further extend the repayment period. Putting off those payments does come with a price.
Landlords who extend the forbearance period may not evict their tenants for nonpayment during that period, and they can’t charge tenants late fees or require a lump-sum repayment of back rent.
If multifamily property owners do proceed to evict tenants, which they can only do for something other than nonpayment of rent, they will have to give tenants a month’s notice. Tenant advocates, lawmakers and credit rating agencies have predicted a steep increase in evictions in the coming months, as state and local eviction moratorium orders expire.
The program could potentially apply to as many as 27,000 properties that currently have performing Freddie Mac loans, where approximately 4.2 million renters reside, according to the agency. At the end of May, Freddie Mac reported 1,011 loans totaling $6.4 billion were in deferral. The states with the highest number of requests for relief were New York, Texas, Maryland, Florida and California.
“Many borrowers are still facing hardship even though they may soon exhaust the 90-day forbearance granted in the initial iteration of our Covid-19 relief program,” said Debby Jenkins, head of Freddie Mac Multifamily. “These additional relief options will provide more flexibility to borrowers and extend tenant protections for renters who also continue to struggle with the economic effects of the pandemic.”
In recent years, Freddie Mac has become more active in the multifamily market. In 2019, it accounted for 20 percent of total multifamily debt originations in 2019, according to the agency.