The CARES Act provides relief to owners of residential real property (for one to four families) secured by certain Federally-backed mortgage loans (loans insured or guaranteed by FHA, VA, USDA, or loans that are owned or securitized by Fannie Mae or Freddie Mac) experiencing a financial hardship due to COVID-19. The borrowers are eligible for a 180-day loan forbearance that can be extended for an additional 180-day period. The borrower may not be charged late fees, penalties or default interest during the forbearance period. Further, servicers of the Federally backed mortgage loans may not initiate or continue foreclosure proceedings for a period of 60 days from March 18, 2020 (May 17, 2020).
The CARES Act also provides relief to owners of multifamily properties (five or more families) secured by certain Federally backed mortgage loans experiencing a financial hardship due to COVID-19. The multifamily borrowers are eligible for a 30-day loan forbearance that can be extended for two additional 30-day periods. The forbearance is conditioned upon the multifamily borrowers not (i) evicting a residential tenant or charging late fees, penalties or other charges for the nonpayment of rent during the forbearance period, and (ii) requiring a residential tenant to vacate its premises until after the expiration of the forbearance period (but with not less than 30 days’ notice).
The CARES Act further prohibits residential landlords for a period of 120 days from March 27, 2020 (July 25, 2020) from initiating legal action to recover possession of a rental unit or charging the tenant fees, penalties or other charges for nonpayment of rent if the mortgage on the property is insured, guaranteed or otherwise assisted in any way by HUD, Fannie Mae, Freddie Mac, the rural housing voucher program or the Violence Against Women Act of 1994. Further, landlords may not require a residential tenant to vacate its premises until after the expiration of the moratorium (but with not less than 30 days’ notice).
Further, by Executive Order dated April 1, 2020, Governor Gary R. Herbert suspended residential evictions for the nonpayment of rent until May 15, 2020 for tenants that have been impacted by COVID-19 (provided that the tenants were current on their rent as of March 31, 2020). The Order does not forgive rent, late fees or other charges. The Executive Order can be found at https://drive.google.com/file/d/1DIvfcaMeSeUhfNmzr-3Cwo3DyZQZIO2l/view.
For more information on this or other related issues, contact Jason Nichols (801) 536-6907 or send an email to firstname.lastname@example.org.