Fannie Mae (OTCQB: FNMA) and Freddie Mac (OTCQB: FMCC) updated their protections for tenants in multifamily properties with mortgages backed by the government-sponsored enterprises (GSEs).
Beginning Feb. 28, 2025, all new GSE-backed loans will require multifamily borrowers to include the following three minimum standards within tenant leases:
- 30-Day Notice of Rent Increases: Renters will receive written notice of a rent increase at least 30 calendar days prior to said increase.
- 30-Day Notice of Lease Expiration: Renters will receive written notice of the scheduled expiration of the residential lease at least 30 calendar days prior to said expiration.
- 5-Day Grace Period for Late Rent Payments: Renters will receive a minimum five calendar day period from the rent due date before late fees or other penalties can be charged.
The updated changes apply to all multifamily properties for which new loan applications with Fannie Mae or Freddie Mac are signed on or after Feb. 28, 2025, with three exceptions:
- Manufactured Housing Communities, which fall under a separate tenant protections policy established by Duty to Serve;
- Existing credit facilities including loans funded through credit facility agreements that pre-date Feb. 28, 2025;
- Loans for cooperative housing corporations;
- Loans that were originated using third-party (i.e., non-GSE) form loan documents.
The protections are included in the Enterprise Multifamily Lease Standards Policy for multifamily housing providers that was announced last month by the Federal Housing Finance Agency.
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