15 U.S.C. § 9057: Forbearance of residential…

Summary

Multifamily borrowers with a federally backed mortgage who are hurting financially because of the COVID‑19 emergency can ask their loan servicer to pause payments. To qualify, the loan must have been current on payments on February 1, 2020. The borrower can ask by phone or in writing and must say they have a COVID‑19 related hardship. The servicer must record the hardship, give a forbearance (a pause) for up to 30 days, and allow two more 30‑day extensions if the borrower asks during the covered period and at least 15 days before the current forbearance ends. The borrower can stop the forbearance at any time. While a forbearance is in place, the borrower cannot evict tenants or charge late fees for missed rent for the reason of nonpayment. The borrower also cannot give a move‑out notice until the forbearance ends, and tenants must get at least 30 days after a notice to vacate. Quick definitions: applicable property = the multifamily building tied to the loan; federally backed multifamily mortgage loan = a loan on a property with 5 or more units that is backed, insured, made, or bought by a federal agency (not short‑term construction loans); multifamily borrower = the owner with a mortgage on a property of 5 or more units; COVID‑19 emergency = the national emergency declared March 13, 2020; covered period = March 27, 2020 until the national emergency ends or December 31, 2020, whichever comes first.

Title 15, §9057

Commerce and Trade, Source: USLM XML via OLRC

(a)In general

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 set forth in this section.

(b)Request for relief

A multifamily borrower with a Federally backed multifamily mortgage loan that was current on its payments as of February 1, 2020, may submit an oral or written request for forbearance under subsection (a) to the borrower’s servicer affirming that the multifamily borrower is experiencing a financial hardship during the COVID–19 emergency.

(c)Forbearance period

(1)In general

Upon receipt of an oral or written request for forbearance from a multifamily borrower, a servicer shall—

(A)document the financial hardship;

(B)provide the forbearance for up to 30 days; and

(C)extend the forbearance for up to 2 additional 30 day periods upon the 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 forbearance period described under subparagraph (B).

(2)Right to discontinue

A multifamily borrower shall have the option to discontinue the forbearance at any time.

(d)Renter protections during forbearance period

A multifamily borrower that receives a forbearance under this section may not, for the duration of the forbearance—

(1)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

(2)charge any late fees, penalties, or other charges to a tenant described in paragraph (1) for late payment of rent.

(e)Notice

A multifamily borrower that receives a forbearance under this section— (1)

(2)may not issue a notice to vacate under paragraph (1) until after the expiration of the forbearance.

(f)Definitions

In this section: (1) Applicable property

(2)Federally backed multifamily mortgage loan

The term “Federally backed multifamily mortgage loan” includes any loan (other than temporary financing such as a construction loan) that—

(A)is secured by a first or subordinate lien on residential multifamily real property designed principally for the occupancy of 5 or more families, including any such secured loan, the proceeds of which are used to prepay or pay off an existing loan secured by the same property; and

(B)is made in whole or in part, or insured, guaranteed, supplemented, or assisted in any way, by any officer or agency of the Federal Government or under or in connection with a housing or urban development program administered by the Secretary of Housing and Urban Development or a housing or related program administered by any other such officer or agency, or is purchased or securitized by the Federal Home Loan Mortgage Corporation or the Federal National Mortgage Association.

(3)Multifamily borrower

the term “multifamily borrower” means a borrower of a residential mortgage loan that is secured by a lien against a property comprising 5 or more dwelling units.

(4)COVID–19 emergency

The term “COVID–19 emergency” means the national emergency concerning the novel coronavirus disease (COVID–19) outbreak declared by the President on March 13, 2020 under the National Emergencies Act (50 U.S.C. 1601 et seq.).

(5)Covered period

The term “covered period” means the period beginning on March 27, 2020, and ending on the sooner of— (A)

(B)December 31, 2020.

Notes & Related Subsidiaries

Editorial Notes

References in Text

The National Emergencies Act, referred to in subsec. (f)(4), (5)(A), is Pub. L. 94–412, Sept. 14, 1976, 90 Stat. 1255, which is classified principally to chapter 34 (§ 1601 et seq.) of Title 50, War and National Defense. For complete classification of this Act to the Code, see

Short Title

note set out under section 1601 of Title 50 and Tables.

§9057 Forbearance of Residential Mortgage Loan Payments for Multifamily Properties with Federally Backed Loans