A new policy will establish a common standard for residential leases at properties with multifamily loans backed by the government-sponsored enterprises (GSEs) beginning early next year. Freddie Mac worked with Fannie Mae and the Federal Housing Finance Agency (FHFA) to establish a new policy that establishes minimum requirements, including a five-day grace period for rent payments, a 30-day notice for rent increases and a 30-day notice of a lease expiration. The policy will apply to new loans under application beginning in February.
“These minimum lease standards will establish baseline protections, offering a consistent approach to residents across multifamily properties with enterprise-backed loans,” said Corey Aber, vice president of mission, policy, and strategy for Freddie Mac Multifamily. “Many but not all owner-operators already meet or exceed these requirements. Our policy establishes a floor that has national reach beyond state and local boundaries.”
Prior to making this change, Freddie Mac worked with Fannie Mae and FHFA to examine the landscape of state landlord-tenant laws and engaged with stakeholders to identify best practice tenant protections. Groundbreaking research findings were published in Freddie Mac’s National Survey of Tenant Protections. In addition, best practices from states, localities, and market participants were examined in the formation of the new standards.
Freddie Mac continues to work across the multifamily industry to encourage broader adaptation of resident-centered housing practices, serving as a catalyst by helping owner-operators who have pioneered innovative programs to share ideas throughout the industry. Freddie Mac has worked to identify and encourage these practices through support for on-time rent reporting to help tenants build or establish credit scores, financial education, integrated on-site health and wellness programs including virtual health care options, and child and after-school care. Freddie Mac delivers its support for these initiatives through a variety of means. The company was the first to directly subsidize credit building, and it provides free financial empowerment curriculum and encourages other resident-centered practices through its Tenant Advancement Commitment affordability preservation offering.
“Affordability has always been core to our mission,” Aber said. “At the root of affordability is the idea that renters should be able to find housing that enhances their quality of life. It’s a natural next step to ask how we can encourage cutting-edge practices that enhance renter well-being by supporting owner-operators who are leaning into this new way of doing business.”
To learn more, visit freddiemac.com.
