June 12, 2023
By: Michael Flynn
On May 30, 2023, the Federal Housing Finance Agency (FHFA) issued a Request for Input (RFI) from the public focusing on “issues faced by tenants in multifamily properties, and on any opportunities and potential impacts associated with requiring or encouraging specific tenant protections at multifamily properties backed by Fannie Mae and Freddie Mac.” Written input and feedback from the public is due by July 31, 2023. The RFI can be found here.
Participants in the multifamily industry, particularly landlords, lenders, property managers and developers, should consider submitting their comments and suggestions to FHFA. The subjects raised by FHFA delve deeply into multifamily property management, potential landlord liabilities, requirements for quality of rental properties, and contractual and legal relationships between landlords and tenants. These parties may want to be sure that their perspectives and concerns are heard, to go along with submissions from tenant advocates and consumer groups. Buchalter can assist in conceptualizing and preparing such comments.
Focusing on its role as supervisor and conservator of Freddie Mac and Fannie Mae, the FHFA stated that its goals in issuing the RFI are to:
- Gather perspectives from tenants and tenant advocates, nonprofits, lenders, multifamily borrowers/property owners, housing providers, developers, government officials, and mortgage industry groups to explore challenges tenants face at multifamily properties, as well as opportunities to address challenges through tenant protections.
- Improve data collection to better quantify the size and scope of challenges that tenants experience at multifamily properties.
The areas in which FHFA sets out a total of 28 questions for public input include:
- General Questions on Tenant Protections
- Access to Housing
- Access to Information
- Tenant Housing Stability
- Risk Management
Some questions are policy related, but some seek input on specific possible multifamily tenant protections such as:
- Actions Freddie and Fannie should take in support of existing federal fair housing laws;
- Streamlining the lease application process and tenant documentation requirements;
- Components of model rental agreements;
- Having landlords provide a written notice to prospective tenants that their lease application has been rejected, including a description of the reasons for rejection;
- Means by which owners and managers of Freddie and Fannie-backed multifamily properties could reduce evictions and improve housing stability of tenants;
- Whether Freddie and Fannie should define housing safety and housing habitability;
- Whether Freddie and Fannie should require borrower compliance with ongoing property maintenance after an initial inspection;
- How the quality of housing units could be assessed;
- How Freddie and Fannie should evaluate the impacts of multifamily tenant protections on their portfolios, on the supply of housing, and on renters.
Participants in the multifamily industry should review the RFI’s specific inquiries, and should be sure to voice any comments or concerns in order to assist Freddie and Fannie to be able to understand and analyze the realistic opportunities and difficult consequences flowing from possible actions identified in the RFI.
Buchalter’s experienced Commercial Real Estate Practice Group’s and its Consumer Financial Services and Mortgage Regulatory Industry Group’s knowledgeable expert attorneys can help the multifamily industry navigate the issues raised by this RFI and any related issues.
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