The Federal Housing Finance Agency (FHFA) recently announced a set of required tenant protections for multifamily properties financed by Fannie Mae and Freddie Mac. This announcement results from FHFA’s extensive and ongoing engagement with market participants and key stakeholders on tenant issues and represents the first-time tenant protections will be a standard component of Enterprise multifamily financing, the FHFA announced in a release.
Covered housing providers will be required to provide tenants with the following:
- a 30-day written notice of a rent increase
- a 30-day written notice of a lease expiration
- a 5-day grace period for rent payments
“The tenant protections announced today are the culmination of a collaborative effort between FHFA, the Enterprises, tenants, and landlords to address challenges faced in rental housing today,” FHFA Director Sandra Thompson said in the release. “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.”
The GSEs will monitor and enforce the tenant protections announced and failure to comply could result in penalties under the loan agreement. These protections will be required for new loans signed on or after the policy effective date, Feb. 28, 2025.
A detailed description of the tenant protection policies is expected to be published by the GSEs in August. Tenants can see if their property is GSE-backed using Fannie Mae External link icon’s and Freddie Mac’s External link icon multifamily property look-up tools.
In 2023, FHFA published a Request for Input (RFI) to gather stakeholders’ perspectives and identify principles and best practices at the federal, state, and local levels that would strengthen tenant protections and increase fairness in the rental market.
FHFA and the GSEs will continue to evaluate options for codifying additional tenant protections that advance sustainable housing in a manner that reflects the needs of both tenants and housing providers.