Freddie Mac, Fannie Mae Enact 90-Day Financial Relief Plan for Multifamily Borrowers, Tenants
WASHINGTON, D.C. — Freddie Mac and Fannie Mae have separately announced nationwide initiatives to provide financial relief for their multifamily borrowers and tenants affected by the outbreak of coronavirus disease of 2019 (COVID-19).
The two government-sponsored enterprises are enacting programs that allow their borrowers to defer monthly payments for up to 90 days by showing hardship as a consequence of COVID-19 and by gaining lender approval.
Additionally, participants in the program must agree to not evict their renters who are facing financial hardship due to the current health crisis.
The agencies anticipate the initiatives could impact more than 54,000 apartment communities across the country.
“This program is historic in its size, and it has the potential to provide relief to millions of families in multifamily rental homes financed through a Freddie Mac loan,” says Debby Jenkins, executive vice president and head of Freddie Mac Multifamily, which implemented a similar forbearance plan in 2017 following Hurricane Harvey in Houston.
“Countless Americans are facing unimaginable hardships, and Freddie Mac is doing what we can to provide relief as our nation addresses this global pandemic,” says Jenkins.
The outbreak of COVID-19 is likely to push the United States into a recession as the first and second quarters of 2020 are anticipated to have negative gross domestic product (GDP) growth. The Wall Street Journal surveyed a group of economists who estimated that 1.5 million new jobless claims were filed last week, which would more than double the highest one-week jobless claims filing that occurred in fall 1982.
Freddie Mac and Fannie Mae are enacting their coronavirus forbearance programs in coordination with their Optigo and Delegated Underwriting and Servicing (DUS) lenders, as well as the Federal Housing Finance Agency (FHFA), which has been the agencies’ conservator since 2008. The FHFA recently announced a similar relief plan for homeowners whose mortgages are backed by Freddie Mac or Fannie Mae.
“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 rnterprises should bring peace of mind to millions of families during this uncertain and difficult time,” sayd Mark Calabria, director of the FHFA. “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.”
About 90 percent of Freddie Mac and Fannie Mae multifamily loans support rental units for households earning 120 percent of area median income or less. The agencies combined to produce more than $148 billion in multifamily loans in 2019 alone.
— John Nelson