UPDATED, March 24, 2020, 4:29 p.m.: Some relief from the federal government is on the way for multifamily landlords, but it comes with strings attached.
The Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, announced that the two mortgage insurers will give multifamily landlords a break on their loans on the condition that they do not evict any renters impacted by the coronavirus.
The benefit is available to all multifamily properties who have Freddie Mac or Fannie Mae-backed mortgages that are “negatively affected by the coronavirus national emergency.”
“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,” FHFA Director Mark Calabria said in a press release. “The multifamily forbearance and eviction suspension offered by the Enterprises should bring peace of mind to millions of families during this uncertain and difficult time.”
Fannie Mae and Freddie Mac are working with mortgage services to implement the measures immediately, according to the release.
President Donald Trump last week directed HUD to provide similar relief for homeowners, suspending evictions and foreclosures for at least 60 days for single-family homes with mortgages backed by Freddie Mac or Fannie Mae.
Last year, Freddie Mac secured multifamily loans worth $75.5 billion, while Fannie Mae secured more than $70 billion, a record for the agency. Both of the insurers are under government conservatorship.
In New York, the lenders had ramped up their financing of multifamily properties in recent years. The agency secured loans for landlords who were feeling the squeeze even before the coronavirus epidemic, due a bevy of tenant-friendly reforms passed in New York last year.
FHFA’s measure may prove to be at least a temporary lifeline for such properties, an unexpected silver lining for landlords.
CORRECTION: This article previously stated that Freddie Mac secured $68.5 billion in loans. The GSE secured $75.5 billion in loans last year.