As a result of the ongoing global pandemic, the Department of Housing and Urban Development last week introduced new mortgage payment relief guidance under the CARES Act. The measure targets borrowers with multifamily mortgages insured by the Federal Housing Administration 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, the agency reported. Servicers can grant this forbearance without direct HUD approval if they follow the protocol in HUD’s guidance.
Additionally, FHA announced 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 nonpayment of rent for 120 days.
To facilitate implementation, HUD provided a standard multifamily forbearance protocol to reduce paperwork and streamline processing for borrowers, servicers, and lenders.
“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,” Assistant Secretary of Housing and Federal Housing Commissioner Brian Montgomery said.