Landlords will be granted U.S. mortgage relief if they delay evictions
Many landlords may be allowed to fall behind on their mortgage payments amid the coronavirus outbreak in return for not kicking renters out of their apartments.
The Federal Housing Finance Agency said Monday that Fannie Mae and Freddie Mac will grant mortgage forbearance to owners of multifamily properties in exchange for suspending evictions. The move applies to all Fannie- and Freddie-backed mortgages in situations where renters can’t afford to make their monthly payments due to the outbreak.
Many California businesses have shuttered to limit the spread of the coronavirus, but construction continues after being deemed essential.
“Renters should not have to worry about being evicted from their home, and property owners should not have to worry about losing their building,” FHFA Director Mark Calabria said in the statement. “The multifamily forbearance and eviction suspension offered by the enterprises should bring peace of mind to millions of families.”
Fannie and Freddie, which are regulated by the FHFA, don’t make loans. Instead, they buy mortgages from banks and other lenders and package them into securities. The companies provide guarantees on the securities to protect investors in case borrowers default, a process that keeps the mortgage market humming.
The FHFA announced earlier this month that Fannie and Freddie would provide payment forbearance for single-family residences provided that borrowers could demonstrate financial hardship from the spread of the novel coronavirus. Such forbearance could allow monthly mortgage payments to be suspended for as long as a year.
Fannie and Freddie, which backstop about $5 trillion of mortgages, have also halted foreclosures for 60 days under orders from the FHFA.