COVID-19 has created great uncertainty for affordable housing developers, managers, and tenants. In a recent webinar, the Nixon Peabody affordable housing team answered questions about this challenging time in the industry.
We’ve provided a summary of the webinar below. Prefer an audio playback? Listen to the webinar recording.
HUD has issued several FAQs for owners of multifamily assisted housing on dealing with COVID-19 and legal guidance for closing transactions
Since March 13, HUD has been regularly issuing FAQs, providing guidance for owners and managers of HUD-insured and HUD-assisted multifamily housing for dealing with COVID-19. These FAQs have been updated several times, and we expect they will continue to be updated. We discuss the FAQs, and their updates, in our Affordable Housing alerts:
The HUD FAQs also direct readers to CDC publications, including both general COVID-19 preparedness guidance and new guidance that specifically addresses questions at multifamily housing properties.
HUD’s frequently asked questions for owners of multifamily assisted housing on dealing with COVID-19
While much of the HUD FAQs are focused on issues pertinent to affordable properties, they contain information useful to all housing providers. The FAQs deal with issues relating to property preparedness, dealing with residents who may be impacted by the virus, how to deal with site staffing, maintenance and repairs. The FAQs give guidance on how property owners/agents can access project funds to address needs arising from the outbreak—including cleaning, and overtime, supplies.
Other issues covered include:
The FAQs also address questions related to the continued function of the Office of Multifamily Housing during this time of government-ordered “stay at home” restrictions. In general, HUD personnel are working remotely and are committed to continuing to serve owners and residents. HUD has made adjustments in their procedures to allow for electronic submission of most documents.
The FAQs also go into some detail on how RAD and FHA transactions will continue to be processed. As with asset management, HUD is set up to continue processing these transactions even if staff are working remotely, including conducting closings. The FAQs include extensive guidance related to the continued operation of HUD’s Office of General Counsel and how they will process and close transactions.
New Stimulus Laws Impact on Multifamily
Below is a summary of how the new stimulus law allocates a portion of the $12.4 billion for various HUD programs. We discuss this further in our alert: Housing related provisions in “Phase 3” coronavirus stimulus.
Forbearance of residential mortgage loan payments for multifamily properties with federally backed loans
Provides up to 90 days of forbearance for multifamily borrowers with a federally backed multifamily mortgage loan who have experienced financial hardship. Borrowers receiving forbearance may not evict or charge late fees to tenants for the duration of the forbearance period. Applicable mortgages include loans to real property designed for five or more families that are purchased, insured, or assisted by Fannie Mae, Freddie Mac, or HUD.
Temporary moratorium on eviction filings
For 120 days beginning on the date of enactment, landlords are prohibited from initiating legal action to recover possession of a rental unit or to charge fees, penalties, or other charges to the tenant related to such nonpayment of rent where the landlord’s mortgage on that property is insured, guaranteed, supplemented, protected, or assisted in any way by HUD, Fannie Mae, Freddie Mac, the rural housing voucher program, or the Violence Against Women Act of 1994.