On August 28, 2024, Fannie Mae and Freddie Mac released more detail on how the enterprises are implementing the Federal Housing Finance Agency’s (FHFA) new landlord and tenant requirements for enterprise-backed rental housing.
Rental housing providers whose communities have a Fannie Mae and Freddie Mac-backed loan attached will be required to provide their residents with a:
- 30-day notice of rent increase
- 30-day notice of expiration of lease and
- 5-day grace period for late fees.
These requirements apply to new leases and renewals for which loan applications are signed on or after February 28, 2025; they will not be retroactively applied to loans before the effective date.
Fannie and Freddie both announced that multifamily borrowers will be required to inform their residents in writing that the standards are in place as a policy at the property and that they apply to all residential tenants regardless of whether they are yet included in individual leases. While there are specific deadlines for implementing the standards at covered rental communities, no specific language is prescribed by the enterprises for leases. Many rental housing providers already comply with these requirements through the National Apartment Association’s (NAA) Click & Lease Program and NAA is reviewing the program to determine if any additional changes are necessary to allow continued compliance with new requirements.
We are pleased that FHFA and the enterprises pursued a measured approach to policymaking and thank them for their ongoing engagement with diverse stakeholders including NAA. These announcements are a response to FHFA’s Request for Input which sought public comment on tenant protections that should be imposed on enterprise-backed housing.
NAA continues its advocacy with federal regulators as they consider phasing in more requirements for multifamily borrowers. FHFA, Fannie Mae and Freddie Mac have not ruled out any policy solutions from consideration. The agency previously committed to explore solutions to address so-called “egregious” rent increases. We continue to highlight the perils of any form of rent control on housing providers, renters and rental communities and provide the industry’s perspective on the implications of housing policy proposals.
For more information on NAA’s regulatory advocacy in this area, please contact Emma Craig, NAA’s Manager of Public Policy.