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Fannie Mae, Freddie Mac Have Coronavirus Relief Plans. Here’s What It Means.


Shaina Mishkin

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Owners of apartment buildings can defer payments if they agree not to evict tenants for nonpayment of rent.


Photograph by Sean Gallup/Getty Images

Plans from
Freddie Mac
and
Fannie Mae
to mitigate the economic hardship from the coronavirus pandemic will allow some multifamily building owners to defer their loan payments for roughly three months.

The Federal Housing Finance Agency on Monday said that Fannie Mae and Freddie Mac would offer mortgage forbearance to some multifamily property owners—on the condition that they suspend evictions on the basis of nonpayment of rent.

According to the plans Freddie Mac and Fannie Mae announced Tuesday morning, landlords whose multifamily properties are financed through the enterprises may be eligible to defer loan payments for up to three months. Landlords who want to take advantage must show hardship as a consequence of the virus and gain lender approval, according to the companies’ press releases.

The two enterprises, which were taken into FHFA conservatorship in 2008, operate in the secondary mortgage marketplace, where they purchase mortgage debt from loan originators.

Owners of multifamily properties who are approved to participate in the relief plan must not evict tenants “based solely on non-payment of rent during the forbearance period,” according to Freddie Mac’s announcement. According to the FHFA, about 43% of the multifamily market is eligible.

“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 statement. “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.”

The announcement comes after the FHFA took action for single-family borrowers. The agency last week directed Fannie Mae and Freddie Mac to suspend evictions and foreclosures for 60 days, according to the FHFA.

—Write to Shaina Mishkin at shaina.mishkin@dowjones.com

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