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
Economics | Education
Nov 21, 2025
How the Fed’s Rate Cuts Will Impact Housing in 20262026 is likely to present the home building sector with new challenges and opportunities, many of which will be explored in a Dec. 11 webinar, “Housing Market Outlook: The Fed Resumes Rate Cuts.”
Regulations
Nov 21, 2025
NAHB Backs Trump Administration’s Proposed ESA ReformsIn a move strongly supported by NAHB, the U.S. Interior Department on Nov. 21 announced four proposed regulatory rules regarding reforms to the Endangered Species Act (ESA) that would rescind changes made during the Biden administration that have created regulatory barriers that hinder housing development and economic activity.
Latest Economic News
Economics
Nov 20, 2025
September Jobs Report Highlights a Cooling but Still Growing Labor MarketThe long-delayed September jobs report revealed that the U.S. economy added 119,000 jobs while the unemployment rate climbed to its highest level in nearly four years.
Economics
Nov 20, 2025
Existing Home Sales Rise in OctoberExisting home sales rose to an eight-month high in October as buyers took advantage of lower mortgage rates, according to the National Association of Realtors (NAR). Resale inventory improved from a year ago but remained below pre-pandemic levels.
Economics
Nov 19, 2025
Affordability Impacts: Young Adults Are Once Again Moving Back HomeThe share of young adults living with parents increased in 2024, interrupting the post-pandemic trend of moving out of parental homes.