The Department of Housing and Urban Development (HUD) has issued new mortgage payment relief guidance under the CARES Act for borrowers with multifamily mortgages insured by the Federal Housing Administration (FHA).
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.
“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,” FHA Commissioner Brian Montgomery said in a news release.
Under 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.
HUD Secretary Ben Carson said the action will stabilize rental housing now and preserve affordable rental options for low-income families in the future.
“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,” Carson said in the release.
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:
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