By Linda O’Flanagan
Multifamily borrowers with Freddie Mac loans have been granted a 90-day extension on loan payments, it was announced yesterday (Tuesday, March 23).
It was the first officially sanctioned program announced to help renters and mortgage holders following days of “guidance” from the state on who will get financial aid as the coronavirus brings New York to a standstill.
Although Governor Andrew Cuomo has said renters and mortgage holders will get relief, and REBNY has issued a pledge that its members won’t evict renters for non-payment, housing advocates say an official order must be passed.
Cea Weaver, of tenants rights group Housing Justice for All, said. “We need rent relief — in the form of canceled rent, for the duration of the crisis — now. Cuomo can do this by executive order, and he must.”
She said Governor Cuomo’s claim that he had “taken care of the rent issue” was a hollow promise.
“The best way Cuomo can actually take care of the rent issue is to cancel rent now for all New Yorkers. It’s time for the state to disallow landlords from collecting rent,” said Weaver.
While Gov. Andrew Cuomo promised a 90-day moratorium on mortgage payments, the banks holding those mortgages and the state’s bank regulator characterized the mortgage relief as mere “guidance.”
New York’s Department of Financial Services, confirmed it was “issuing guidance to urge all regulated and exempt mortgage servicers to do their part during this outbreak to alleviate the adverse impact caused by COVID-19 on those mortgage borrowers who demonstrate they are not able to make timely payments.”
Meanwhile, State Sen. Michael Gianaris introduced a bill on Monday that would suspend rent payments for 90 days for tenants and small businesses.
Advocates are calling on Cuomo to enact the bill while landlord groups are warning any emergency legislation must include property owners. “The only way the Gianaris rent forgiveness measure works is with commensurate relief for landlords – and that must start with the city providing landlords with a dollar-for-dollar offset of their property taxes for the same period. Short of this, the rental housing industry – the biggest economic engine in New York City – will collapse faster than the stock market,” said Joseph Strasburg, president of the Rent Stabilization Association, which represents 25,000 owners of one million rent-stabilized apartments in the five boroughs.
“No question tenants are facing economic distress and need rent relief, but rent forgiveness can’t solely be a landlord burden.”
“Gov. Cuomo’s [guidance] delays mortgage payments for 90 days – it doesn’t forgive them – and it’s absolutely unreasonable and unrealistic for city and state government to think that landlords can continue to pay their property taxes and water bills when they are halting rent payments, which landlords need to pay those bills,” Strasburg said.
Freddie Mac, in coordination with the Federal Housing Finance Agency (FHFA), said on Tuesday that multifamily landlords whose properties are financed with a Freddie Mac Multifamily fully performing loan can defer their loan payments for 90 days by showing hardship as a consequence of COVID-19 and by gaining lender approval.
In turn, Freddie Mac is requiring landlords not to evict any tenant based solely on nonpayment of rent during the forbearance period.
Freddie Mac anticipates that the program can provide relief for up to 4.2 million U.S. renters across more than 27,000 properties.
“This program is historic in its size, and it has the potential to provide relief to millions of families in multifamily rental homes financed through a Freddie Mac loan,” said Debby Jenkins, executive vice president and head of Freddie Mac Multifamily.
“Countless Americans are facing unimaginable hardships, and Freddie Mac is doing what we can to provide relief as our nation addresses this global pandemic.”
Freddie Mac Multifamily’s coronavirus program is modeled on its industry-leading disaster-relief forbearance plan introduced in the wake of Hurricane Harvey in 2017.
Since then, Freddie Mac has implemented the forbearance plan in response to other natural disasters, including hurricanes and the California wildfires.
Freddie Mac also has a relief program for single-family borrowers.
This story originally appeared in Real Estate Weekly on March 25.