Forbearance Fine Print and New Rules

[Joe Splitrock]

Some landlords chose to take forbearance, but as they say, always read the fine print or in this case, expect new fine print to be created! The Federal government published added rules on July 1 for those in forbearance with HUD insured or HUD held mortgages.

First of all, the eviction moratorium continues until you are out of forbearance. You are also required to proactively notify tenants you are in forbearance and let them know they cannot be evicted for non-payment of rent. In other words, you have to send your tenant a letter stating "I cannot evict you for non payment of rent" - yikes! You cannot require lump-sum payments of rent at the end of forbearance, meaning they must go on a payment plan. During the renters repayment period following borrowers forbearance, the tenant must be given 30 days notice to vacate for non repayment of rent. This just means a very elongated eviction process for anyone in forbearance. My advice is only take advantage of government programs if you really need them. They literally changed the rules mid stream on this.

https://www.hud.gov/sites/dfiles/OCHCO/documents/20-07hsgn.pdf.pdf