News & Transactions

CARES Act: Impacts for Multifamily Borrowers with Federally Backed Loans
4/7/2020
The CARES Act has two provisions specifically related to multifamily borrowers with Federally backed loans. We have provided summaries of these provisions below.

As always, if you have any questions about your loan(s), please contact your loan officer
 

1. Creation of Multifamily Forbearance Programs for Borrowers with Fannie Mae, Freddie Mac, HUD, or other Federally backed loans


Section 4023 of the CARES Act - https://www.congress.gov/bill/116th-congress/house-bill/748/text#H9918EA214355494382F5629DCB3FC2E6 - Please read the full text of the bill for definitions of all terms used in this summary.

As stated in the bill, during the covered period, a multifamily borrower with a Federally backed multifamily mortgage loan experiencing a financial hardship due, directly or indirectly, to the COVID-19 emergency may request a forbearance under the terms established.
These terms include:
  • The borrower must be current on their mortgage payments as of February 1, 2020.
  • Requests for forbearance must be made during the covered period.
    • The covered period is defined as the period beginning on the date of enactment of the CARES Act—March 27, 2020—and ending on the sooner of:
      • The termination date of the national emergency concerning the novel coronavirus disease (COVID-19) outbreak declared by the President on March 13, 2020, or
      • December 31, 2020.
  • Once a borrower requests forbearance, the servicer or the lender may (upon receipt of documentation of the financial hardship) provide the forbearance for up to 30 days.
    • Extensions for up to 2 additional 30-day periods upon request of the borrower (provided that the borrower’s request for an extension is made during the covered period and at least 15 days prior to the end of the prior forbearance period) may also be approved.
  • A multifamily borrower shall have the option to discontinue the forbearance at any time.
  • A multifamily borrower that receives a forbearance under this section may not, for the duration of the forbearance:
    • Evict or initiate the eviction of a tenant from a dwelling unit located in or on the applicable property solely for nonpayment of rent or other fees or charges; or
    • Charge any late fees, penalties, or other charges to a tenant described above for late payment of rent.
Borrowers who are experiencing hardship as a result of the COVID-19 national emergency should contact their asset manager for more information on the forbearance process. If you are unsure of your asset manager’s contact information, please email multifamilyservicing@mtb.com.
 

 2. Temporary Moratorium on Eviction Filings for Nonpayment of Rent or Other Fees and Charges and Notice for Evictions


Section 4024 of the CARES Act - https://www.congress.gov/bill/116th-congress/house-bill/748/text#H303FBAD36251421BAF4BF3372105E9DA - Please read the full text of the bill for definitions of all terms used in this summary.

The following items (moratorium on evictions and notice for evictions) apply to all multifamily borrowers with Federally backed mortgages (Fannie Mae, Freddie Mac, HUD, USDA) as well as borrowers who have a covered property as defined in the Act.

Moratorium Period on Evictions
During the 120-day period beginning on the date of enactment of this Act (March 27, 2020), the lessor of a covered dwelling may not:
  1. Make, or cause to be made, any filing with the court of jurisdiction to initiate a legal action to recover possession of the covered dwelling from the tenant [eviction] for nonpayment of rent or other fees or charges; or
  2. Charge fees, penalties, or other charges to the tenant related to such nonpayment of rent.
Notice for Evictions
The lessor of a covered dwelling unit:
  1. May not require the tenant to vacate the covered dwelling unit before the date that is 30 days after the date on which the lessor provides the tenant with a notice to vacate; and
  2. May not issue a notice to vacate until after the expiration of the moratorium period established by the Act.

If you have any questions about your loan(s), please contact your loan officer

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