GSE Loan Agreements Will Require Notices and Grace Period
July 16, 2024
The Federal Housing Finance Agency on July 12 (FHFA) announced mandatory tenant protections, via loan agreements, for multifamily properties financed by Fannie Mae and Freddie Mac (the Enterprises).
The regulator’s press release notes this is “the first time that tenant protections will be a standard component of Enterprise multifamily financing.”
Effective February 28, 2025, covered housing providers will be required to provide tenants with the following
- 30-day written notice of a rent increase;
- 30-day written notice of a lease expiration; and
- Five-day grace period for rent payments.
What's next. The Enterprises will monitor and enforce these protections, and failure to comply could result in penalties under the loan agreement. They are also expected to publish a detailed description of the tenant protection policies in August 2024.
Background. In 2023, FHFA published a Request for Input (RFI) regarding potential tenant protections. CREFC and several other real estate trades responded to the RFI with a joint trade letter that advised the FHFA to: