FEDERAL PROTECTIONS FOR TENANTS DURING THE COVID-19 NATIONAL EMERGENCY

In response to the COVID-19 pandemic, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted on March 27, 2020.  There are two relevant provisions of this law for property owners of multifamily rental properties (defined as properties with five or more units) and their tenants:

1. A forbearance program established for multifamily rental properties with federally-backed mortgage loans, including loans owned by Fannie Mae or Freddie Mac (the Enterprises); and
2. The prohibition of evictions due to nonpayment of rent for tenants in multifamily properties receiving forbearance under this program.

Property owners are prohibited from charging late fees or other penalties for nonpayment of rent during the period of forbearance and must provide a 30-day notice to vacate prior to eviction.  The CARES Act's forbearance eligibility period expires at the termination of the national emergency or on December 31, 2020, whichever comes first.  Tenants can use the online lookup tools (see call out on page 2) to determine whether the multifamily property they are leasing has an Enterprise-backed mortgage.

On September 4, 2020, the Centers for Disease Control and Prevention (CDC) published an order called the “Temporary Halt in Residential Evictions to Prevent the Further Spread of COVID-19."  The CDC order is independent of the CARES Act and has different rules and requirements.  It applies to all tenants in all fifty states and US territories (except for American Samoa), regardless of whether the tenant lives in a single-family property or a multifamily property or whether the property has a federally-backed mortgage.  The order prohibits evictions for nonpayment of rent if the tenant meets certain conditions, including economic and financials hardships incurred as a result of the pandemic.  To stop or prevent an eviction under the CDC order, the tenant must provide a declaration to their landlord affirming that they meet several conditions outlined in the order.  The CDC order is in effect through December 31, 2020.

These federal eviction protections do not relieve tenants of any obligation to pay rent or from any other lease terms and property rules.  Tenants still may face evictions for reasons other than not paying rent or making a housing payment.  See the Applicability section of the CDC order to learn more.

Additional Protections for Tenants in enteprise-Backed multifamily Properties

The Federal Housing Finance Agency (FHFA) has taken actions that provide tenant protections and support multifamily property owners during the COVID-19 national emergency.  Prior to the passage of the CARES Act, the Enterprises announced on March 23, 2020 a forbearance program for multifamily property owners that provides the same tenant protections described above.                                   

Further, FHFA and the Enterprises announced additional tenant protections and property owner support on June 29, 2020. This allowed mortgage servicers to extend forbearance agreements for multifamily property owners. Those owners who had existing forbearance agreements lasting up to three months were then able to extend for an additional three months—or a total forbearance of up to six months.  The forbearance extension is available for multifamily property owners with an Enterprise-backed multifamily mortgage loan experiencing a financial hardship due to the COVID-19 national emergency.  While a property is in forbearance, the landlord must suspend all evictions for tenants unable to pay rent.  Property owners with Enterprise-backed mortgage loans in an extended forbearance or repayment schedule, or who enter into a new forbearance agreement, are also prohibited from:

• Charging late fees or penalties for nonpayment of rent during the property owner’s repayment period for the forborne amount of the loan;
• Requiring tenants to repay back rents in one lump sum without providing flexibilities; and
• Evicting tenants during the property owner’s repayment period without a 30-day notice to vacate the property. 

On August 4, 2020, FHFA directed the Enterprises to require those multifamily property owners with a new or modified forbearance agreement to inform tenants of their available protections during the forbearance and repayment periods.  Property owners are required to provide tenants with written notices within 14 days of the start of the forbearance period, which must include:

• A disclosure of property’s forbearance status and dates of forbearance;
• Information about tenant protections, including suspension of evictions;
  • The dates of tenant protections; and
• Contact information for the property manager.

To help ensure compliance, property owners must certify to their servicers once the notification is complete.

FHFA encourages all rental property owners to consider adopting these tenant protections even when not required by law or as part of an Enterprise forbearance agreement.  FHFA will continue to monitor data as well as new and evolving challenges facing tenants, borrowers, and the mortgage market as a result of the COVID-19 national emergency and will update its policies accordingly.