NAHB continues to monitor the latest updates related to coronavirus resources for multifamily builders, developers, owners and managers.
In addition to the FAQs below, check agency and department resource pages to stay on top of changing information:
- HUD's Coronavirus Page
- FHFA's COVID-19 Resource Page: Includes information on single family, multifamily, Fannie Mae, Freddie Mac and Federal Home Loan Banks
- Fannie Mae's COVID-19 Multifamily Resource Page
- Freddie Mac's COVID-19 Multifamily Resource Page
- USDA's Rural Development Multifamily Resource Page
Mortgage Forbearance & Tenant Evictions
FHFA Multifamily Mortgage Forbearance Administrative Actions Superseded by the CARES Act
On March 23, the Federal Housing Finance Administration (FHFA) announced that Fannie Mae and Freddie Mac (the Enterprises) would offer multifamily property owners 90-days of mortgage forbearance with the condition that they suspend all evictions for renters unable to pay rent due to the impact of coronavirus. FHFA coordinated with the Enterprises to ensure that tenants will not be evicted while the owner of their multi-family property is in such a forbearance plan. The forbearance is available to all multifamily properties with an Enterprise-backed performing multifamily mortgage negatively affected by the coronavirus national emergency. However, the Coronavirus Aid, Relief and Economic Security Act (CARES) Act, enacted on March 27, 2020, superseded FHFA's administrative actions and the Enterprises’ guidance to lenders.
HUD-FHA Multifamily Mortgage Forbearance COVID-19 Administrative Actions
HUD-FHA did not implement regulatory actions to provide forbearance for multifamily insured mortgages before enactment of the CARES Act.
The legislation calls for an immediate (as of March 27, 2020) 120-day moratorium on evictions and associated fees for nonpayment of rent for all properties insured, guaranteed, supplemented, protected or assisted in anyway by HUD, Fannie Mae, Freddie Mac, the rural housing voucher program or covered properties under the Violence Against Women Act, which includes Low Income Housing Tax Credit (LIHTC) projects. After the 120 days, owners must give 30 days written notice of an eviction.
In addition to the broad eviction moratorium, Congress also prohibited multifamily owners who receive mortgage forbearance under the CARES Act from evicting tenants for nonpayment of rent during the forbearance period.
The CARES Act includes multifamily mortgage forbearance for all federally backed mortgages (Fannie Mae, Freddie Mac, Federal Housing Administration, USDA-Rural Development). Owners may request forbearance for 30 days, with the option of two additional 30 days as needed for a total of 90 days. Forbearance may be requested from the date the bill is enacted until the termination of the national emergency declaration or Dec. 31, 2020, whichever comes sooner.
The law prohibits multifamily owners from evicting tenants for nonpayment or charging late fees during their forbearance period. Borrowers cannot issue a notice to vacate until after the forbearance period and cannot require the tenant to vacate the unit until 30 days after the notice to vacate. There is no specific reference in the legislation to the repayment period for a loan under the forbearance. Therefore, NAHB has requested more flexible forbearance repayment terms for FHA and the Enterprise mortgages.
If an owner takes the forbearance later in the year, he or she is still required to have a moratorium on evictions immediately after passage of the legislation for 120 days, and then additionally during the forbearance period. It is NAHB's understanding that if forbearance is taken immediately, those two eviction periods would occur concurrently.
NAHB is pleased to report that Congress provided additional appropriations for HUD's Project-Based Section 8 and Housing Choice Voucher program in anticipation of tenants' income losses. NAHB advocated for these funds, which should go a long way to protect tenants and allow assisted properties that depend on rental income to maintain operations.
- Tenant-Based Rental Assistance (Housing Choice Vouchers) received an additional $1.25 billion.
- Project-Based Rental Assistance (PBS8) received an additional $1 billion.
Unfortunately, the CARES Act did not provide additional funding for USDA's rental subsidy programs.
Yes. The legislation funded several programs in these amounts:
- Community Development Fund (CDBG) — $5 billion. CDBG is a flexible block grant program, commonly used by communities for a wide range of needs. CDBG is primarily used for activities that benefit low- and moderate-income individuals.
- Section 202 housing for the elderly — $50 million
- Section 811 housing for those with disabilities — $15 million
- Homelessness Assistance Grants — $4 billion. This funding is for homeless individuals, shelter and Public Housing Authorities (PHAs). However, this funding will also assist those who find themselves on the verge of homelessness due to severe income loss from COVID-19.
- Fair Housing Act initiatives — $2.5 million. Of this total, $1 million will go for education and outreach and $1.5 million is for enforcement.
Yes. See this brochure.
Opportunities & Next Steps for COVID-19 Relief
NAHB is actively urging the FHFA and the Enterprises to provide flexibility for multifamily owners to add the forbearance repayments to the end of their mortgages and have repayment periods that exceed 12 installments. We are also asking them not to prohibit evictions beyond the CARES Act requirements in cases where a tenant has not met the terms for repaying their deferred rent.
NAHB also urged HUD-FHA to provide similar options for multifamily borrowers. Unfortunately, HUD is limiting the option to repay the forbearance at the end of the mortgage to only HUD-held mortgages.
NAHB is urging FHFA and the Enterprises to provide blanket waivers for using reserves for replacements to cover necessary expenses, such as mortgage payments, when rental income is insufficient to cover the expenses due to the COVID-19 crisis.
Construction and Site Inspections
NAHB will strongly urge HUD-FHA to pursue technological solutions to satisfy construction and site inspection requirements where possible for FHA multifamily mortgage insurance programs. Likewise, we argue for extensions on construction deadlines for FHA-insured mortgages.
Specifically, NAHB and other real estate providers are asking Congress to:
- Provide direct rental payment assistance to multifamily properties on behalf of renters impacted by COVID-19
- Expand federal mortgage forbearance for multifamily properties
- Limit the eviction moratorium provisions to COVID-19
- Expand the Small Business Administration's Paycheck Protection Program so all housing firms are eligible for relief
Read the full coalition letter to Congress for details regarding these provisions.
NAHB members are encouraged to contact their members of Congress to educate them about the need for additional relief for both renters and housing operators in future COVID-19 stimulus and recovery packages. A template letter, available through BuilderLink, outlines the rental housing industry's requests of Congress.
NAHB is in constant communication with multifamily coalition partners such as the National Multifamily Housing Council, National Apartment Association, Mortgage Bankers Association, National Association of Realtors and others. As we move into discussions of the "COVID 4" package, we are sharing NAHB's priorities and working with our coalition partners to create a comprehensive list of "asks" to ensure the multifamily industry is speaking with one cohesive voice.
NOTE: NAHB is providing this information for general information only. This information does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind nor should it be construed as such.