ABSTRACT

Oversight of Multifamily Borrowers' Compliance with Cares Act and Freddie Mac Tenant Protections and Freddie Mac's Response to the Potential Financial Impact of COVID-19   [open pdf - 360KB]

From the Executive Summary: "In March 2020, the onset of the COVID-19 [coronavirus disease 2019] pandemic prompted Congress, FHFA [Federal Housing Finance Agency], and Freddie Mac to act to protect the interests of tenants in multifamily properties financed by federally backed multifamily mortgage loans. Congress enacted the Coronavirus Aid, Relief, and Economic Security Act (CARES Act or the Act), which imposed a 120-day moratorium that prohibited all borrowers with federally backed multifamily loans (referred to in this report as 'borrowers,' 'lessors,' or 'landlords') from filing legal actions to recover possession of a covered dwelling unit from a tenant solely due to the nonpayment of rent or other fees or charges. The Act also prohibited multifamily borrowers whose loans were in forbearance from evicting tenants, or initiating eviction actions against tenants, during the forbearance period solely for the nonpayment of rent. Freddie Mac's forbearance program provides the same tenant protections and also requires borrowers in forbearance to notify eligible tenants in writing and inform them of the available protections. In June 2020, at FHFA's direction, Freddie Mac expanded its tenant protections requirement for borrowers entering into a forbearance to allow tenants to pay back missed rent payments over a 'reasonable time,' rather than in one lump-sum payment at the end of the forbearance period. [...] We undertook this special project, in part, to determine how Freddie Mac monitored multifamily servicers' and borrowers' compliance with the CARES Act's and Freddie Mac's forbearance program tenant protections."

Report Number:
Federal Housing Finance Agency, Office of Inspector General, Special Report No. OIG-2022-003
Publisher:
Date:
2022-03-24
Series:
Copyright:
Public Domain
Retrieved From:
Oversight.gov: https://www.oversight.gov/
Format:
pdf
Media Type:
application/pdf
URL:
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