Here are some tips from our research for landlords if your tenant cannot pay rent or if their rent payment will be delayed due to a job loss because of COVID-19. For landlords that still have a mortgage and carrying costs, this could obviously be a real issue. According to the FHFA website, "If your ability to pay your mortgage is impacted, and your loan is owned by Fannie Mae or Freddie Mac, you may be eligible to delay making your monthly mortgage payments for a temporary period."
Fannie Mae and Freddie Mac recently informed mortgage servicers to offer "up to 12 months of forbearance for borrowers who are suffering financial hardship due to the pandemic, and if you're a multifamily operator with a Fannie or Freddie loan, deferrals are available for up to 90 days." Fannie Mae released the following statement: "As part of the forbearance plan, borrowers must agree to suspend evictions of tenants who are facing financial hardship due to the current crisis. Fannie Mae anticipates that this will provide relief to renters across more than 27,000 properties."
There are specific lenders offering deferral programs as well (see links below). Some of the banks that have made an announcement about deferral programs are: Bank of America, SunTrust, Ally Bank, and BB&T to name a few. If your lender is not listed or you don't know who your lender is, then call your servicer to find about their forbearance, deferral, and/or financial hardship programs or go to the Fannie Mae website.
Below is a comment from a landlord that owns several rental properties that just submitted an application for a SBA loan in light of COVID-19. I edited some of their comments from a Bigger Pockets post, so the information is more concise.
I just submitted my application. The SBA website is sluggish and slow at times. It wouldn't let me upload the files for certain things they require, because the upload feature wasn't working. I even tried Internet Explorer (preferred browser), but had no luck. This loan might be huge for landlords with several properties. I have 82 houses. If 50 tenants don't pay the rent, that would be a loss of roughly $70k a month.
But I saw on the front page of the loan request app that they specifically state that landlords with rentals can get the loan and they even give us the direct instructions as to some selections we need to make (i.e. economic injury).
To me, I look at it as though they should be able to make some projections as to losses. Maybe a worst case of 50% collections for a period of 6 to 9 months? And then offer a loan up to that amount. Again, how they come with their numbers will determine how useful the loan will be. A $10k loan is going to do nothing for me. A $100k loan might be the difference in keeping all my payments with the banks current and still having enough money for repairs and the like so I don't lose my houses.
But thats why I really believe the SBA is going to be super aggressive in these landlord loans.
In conclusion, there are programs out there and resources for tenants and landlords, but these programs are being created and evolving everyday. Federal housing agencies are providing guidance that they will be offering flexibility to borrowers that are losing rental income because of COVID-19. An article form Next City recommends that landlords and borrowers keep documentation to show the economic hardship they are experiencing because tenants lost their jobs because of COVID-19.
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Below are links to resources for landlords and renters.
SBA Disaster Assistance in Response to the Coronavirus
Fannie Mae Multifamily - COVID-19
COLORADO HOUSING FINANCIAL ASSISTANCE PROGRAMS
- There are a ton of resources in the above link for tenants.
Forbes: List Of Banks Offering Relief To Customers Affected By Coronavirus (COVID-19)