April 13, 2020

HUD: New CAREs Act Multifamily Mortgage Payment Relief Implemented to Maintain and Preserve Affordable Rental Housing

Multifamily borrowers can request up to 90 days of mortgage payment forbearance from their servicer 

Today, the U.S. Department of Housing and Urban Development (HUD) announced it is issuing new mortgage payment relief guidance under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) for borrowers with multifamily mortgages insured by the Federal Housing Administration (FHA) or borrowers participating in other HUD Multifamily housing programs. Servicers must grant Multifamily borrowers experiencing financial hardships, as a result of COVID-19, up to 90 days of forbearance when the borrower requests assistance. Servicers can grant this forbearance without direct HUD approval if they follow the protocol in HUD’s guidance. Read the guidance for Multifamily lenders, servicers, and other stakeholders.

Additionally, FHA is announcing that, as required by the CARES Act, all owners/agents of FHA-insured Multifamily properties and properties participating in HUD Multifamily assisted housing programs must cease evictions of tenants for non-payment of rent for 120 days.

“The President’s decisive action to provide unprecedented CARES ACT relief options for America’s Multifamily housing providers will not only stabilize rental housing now, but preserve affordable rental options for our nation’s low-income individuals and families in the future,” said HUD Secretary Ben Carson. “While this relief is reserved to help alleviate Americans experiencing hardship due to the pandemic, it is important to note that if an individual’s situation affords them the ability to pay their rent, then they should continue to do so to the extent practical.”

To facilitate implementation, HUD is providing a standard Multifamily forbearance protocol to reduce paperwork and streamline processing for borrowers, servicers, and lenders. The protocol includes:

“The key provisions of the CARES Act, and our implementation guidance, are meant to provide relief to those Multifamily borrowers who are in immediate financial danger due to a reduction of rental receipts from their tenants –tenants who may also be struggling financially due to COVID-19,” said Assistant Secretary of Housing and Federal Housing Commissioner Brian Montgomery.

The guidance also includes important information for Multifamily borrowers, lenders, and servicers about addressing cash flow shortages, repayment plans, and other options to bring a mortgage current following a forbearance period.

This post was originally published here.