HUD Issues Guidance on Multifamily Mortgage Forbearance Under the CARES Act
HUD has released two letters to provide guidance to borrowers and lenders during the COVID-19 pandemic. The first letter provides guidance for implementing the CARES Act multifamily mortgage forbearance provisions for FHA-insured multifamily loans.
The guidance closely follows the CARES Act in setting a maximum 90-day forbearance period and eviction moratoria for non-payment of rent. In a win for NAHB’s advocacy, HUD clarified: "In addition, mortgage modification tools are available to HUD-held loans, including adding the missed payments at the end of the mortgage as extended payments or a balloon payment; recasting the mortgage to cover the delinquency; or other reasonable measures."
Similarly, HUD addressed other NAHB requests by committing to review and quickly approve requests for suspension of Reserve for Replacement deposits, releases from the Reserve for Replacement or Residual Receipts account, or other measures to make debt service and tax and insurance payments. Finally, the guidance discusses outside funding sources for COVID-19 relief, loans and owner advances.
The second letter is separate guidance to mitigate risks for FHA-insured Section 223(f) refinancing loans. HUD will require steps to offset additional risks of higher vacancy, lost rent and income disruptions as a result of COVID-19.
These actions include, but are not limited to, the requirement of a Debt Service Reserve (DSR) for Section 223(f) transactions to offset anticipated operating losses after closing. The letter provides instructions to HUD staff describing the new DSR requirements for market rate, affordable and cash out refinance transactions in the pipeline prior to and after receiving a firm commitment. This letter takes effect immediately and will remain in effect until HUD determines that the real estate markets that were negatively affected by the COVID-19 emergency have stabilized and additional actions for Section 223(f) transactions are no longer required.
For more information, contact Michelle Kitchen at 800-368-5242 x8352.
Latest from NAHBNow
Leading Suppliers Council
Dec 24, 2025
10 Ways to Turn Your Business Into a Lean, Mean Building MachineMyriad industry challenges are adding time and cost to home building projects. But with the right technology, you can better anticipate and manage those challenges to help optimize your business' performance and profits.
Sponsored Content
Dec 23, 2025
The 5 Types of Builders — and the One Built to ProsperMost builders want the same things: predictable profits, less stress, and a business that doesn’t grind them down year after year.
Latest Economic News
Economics
Dec 22, 2025
State-Level Employment Situation: September 2025In September 2025, nonfarm payroll employment was largely unchanged across states on a monthly basis, with a limited number of states seeing statistically significant increases or decreases. This reflects generally stable job counts across states despite broader labor market fluctuations. The data were impacted by collection delays due to the federal government shutdown.
Economics
Dec 19, 2025
Existing Home Sales Edge Higher in NovemberExisting home sales rose for the third consecutive month in November as lower mortgage rates continued to boost home sales, according to the National Association of Realtors (NAR). However, the increase remained modest as mortgage rates still stayed above 6% while down from recent highs. The weakening job market also weighed on buyer activity.
Economics
Dec 18, 2025
Lumber Capacity Lower Midway Through 2025Sawmill production has remained essentially flat over the past two years, according to the Federal Reserve G.17 Industrial Production report. This most recent data release contained an annual revision, which resulted in higher estimates for both production and capacity in U.S. sawmills.