FHFA introduces new protections for tenants in multifamily housing

The Federal Housing Finance Agency (FHFA) is rolling out new projections for tenants in multifamily properties financed by Fannie Mae and Freddie Mac.

This marks the first time tenant protections will be a standard component of Fannie and Freddie’s (the Enterprise) multifamily financing.

“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. “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.”

With these new protections, covered housing providers will be required to provide tenants with the following:

• 30-day written notice of a rent increase;
• 30-day written notice of a lease expiration;
• 5-day grace period for rent payments.

These protections will be required for new loans signed on or after Feb. 28, 2025. The Enterprises expects to publish a detailed description of the tenant protection policies in August 2024.

The Enterprises will monitor and enforce these new tenant protections. Failure to comply could result in penalties under the loan agreement.

The FHFA published a Request for Input (RFI) to gather information from stakeholders that would strengthen tenant protections and increase fairness in the rental market. FHFA published a summary of the input in January 2024.

FHFA and the Enterprises will continue to evaluate options for codifying additional tenant protections that advance sustainable housing.

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