Mandatory 30-day notices and grace periods will be required
Fannie Mae has announced new tenant protection measures that will take effect for all new multifamily loans backed by Fannie Mae and Freddie Mac starting February 2025.
The changes are part of broader tenant protections for multifamily properties with mortgages backed by Fannie Mae and Freddie Mac. Effective Feb. 28, 2025, all new loans backed by these government-sponsored enterprises (GSEs) will require multifamily borrowers to include three minimum standards in tenant leases:
- A 30-day written notice before any rent increases take effect
- A 30-day written notice of lease expiration
- A 5-day grace period for late rent payments before fees or penalties can be charged
The policy applies to all multifamily properties with new loan applications signed on or after February 28, 2025, with some exceptions. These include Manufactured Housing Communities, existing credit facilities, loans for cooperative housing corporations, and loans originated using non-Enterprise form loan documents.
These protections are included in the Enterprise Multifamily Lease Standards Policy announced by the Federal Housing Finance Agency (FHFA) in July.
“The new Enterprise Multifamily Lease Standards align with our mission to expand access to housing that is both affordable and sustainable,” Fannie Mae Multifamily head Michele Evans said in the announcement. “They reflect our comprehensive Renter Needs Research and methodical approach to analyzing renter obstacles and outcomes and will provide the industry with consistent expectations regarding tenant notification and grace period practices.”
To aid implementation, Fannie Mae and Freddie Mac have published FAQs and a policy grid outlining the standards, applicability, loan document updates, implementation requirements, and monitoring and enforcement details. Fannie Mae plans to provide additional information to lenders and borrowers before the February 2025 effective date.
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Tenants can use Fannie Mae’s Renters Resource Finder online tool to determine if they live in a Fannie Mae-backed multifamily property.
This policy change comes as part of Fannie Mae’s efforts to support housing stability for individuals and families in multifamily rental properties backed by the organization.
“We look forward to continuing to work closely with FHFA, Freddie Mac, our lenders and borrowers, and other multifamily housing stakeholders on these and other important solutions to address the challenges faced by renter households across the country,” Evans said.
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