The Federal Housing Finance Agency (FHFA) has announced a set of tenant protections for multifamily properties financed by Fannie Mae and Freddie Mac beginning Feb. 28, 2025.
This is the first time that tenant protections will be a standard component of multifamily financing by the government-sponsored enterprises (GSEs). They are being implemented after FHFA’s ongoing engagement with market participants and key stakeholders on tenant issues.
Housing providers with new Fannie Mae and Freddie Mac loans signed on or after the policy effective date will be required to provide tenants the following:
- A 30-day written notice of a rent increase;
- A 30-day written notice of a lease expiration; and
- A five-day grace period for rent payments.
“The tenant protections announced today are the culmination of a collaborative effort between FHFA, the [GSEs], tenants, and landlords to address challenges faced in rental housing today,” stated FHFA director Sandra L. Thompson. “These requirements reflect basic best practices to ensure housing providers effectively communicate with tenants and that tenants understand their rights and responsibilities under their leases.”
According to the FHFA, Fannie Mae and Freddie Mac will monitor and enforce the tenant protections, and failing to comply could result in penalties under the loan agreement. The GSEs are expected to publish a detailed description of these policies in August.
The National Multifamily Housing Council, National Apartment Association, and Mortgage Bankers Association issued a joint statement following the FHFA’s announcement.
“We appreciate FHFA’s ongoing, collaborative approach with our members and other industry stakeholders on ways to increase affordable rental housing supply and to adopt common-sense practices that better serve tenants. Long term, the only real way to sustainably lower housing costs and create more housing security for renters is to increase housing supply as the Biden administration’s Housing Supply Plan correctly points out,” stated the organizations.
They noted that the announced tenant protections are generally consistent with the practices of professionally managed housing providers.
“We will work diligently with FHFA, the GSEs, and our members to make sure these new initiatives are implemented as efficiently as possible,” they added. “Going forward, we urge FHFA to continue to gather information about the impacts of all potential policy proposals and changes, and we are committed to working with them to tackle the affordability crisis.”
