Monday, April 6, 2020

Multifamily (5 or more residential units) Borrowers can get a Mortgage Loan Forbearance During COVID-19 Emergency – Coronavirus Stimulus Bill 2020

Section 4023 of the Coronavirus Stimulus Bill requires lenders and servicers to provide up to 90 day forbearance to multifamily borrowers with a Federally back mortgage loan. 

Section 4023 entitles a multifamily borrower to an initial 30 day loan forbearance with the right to ask for 2 additional 30 day forbearances so long as the multifamily borrower submits a hardship request at least 15 days before the initial 30 day forbearance expires.

A multifamily borrower is an owner of a building with 5 or more residential units.

During the forbearance period a multifamily borrower cannot start nonpayment of rent eviction proceedings against any tenant living in the property. A multifamily borrower cannot give any tenant a notice to vacate during the forbearance and the multifamily borrower must give a minimum 30 day notice to vacate after the expiration of the forbearance. Also, during the forbearance period, a multifamily borrower cannot charge a tenant any late fees or any other charges.

To qualify, the multifamily borrower must submit a forbearance hardship request to the lender or servicer. A multifamily property owner must be current with his or her loan payments at the time of the request. A multifamily borrower can discontinue the forbearance at anytime.

The right to a forbearance ends when the COVID-19 National Emergency officially ends or on December 31, 2020, whichever date come first.

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