Starting Feb. 28, 2025, Fannie Mae and Freddie Mac will implement new lease requirements for multifamily properties receiving financing. These changes aim to enhance tenant protections and establish uniform leasing standards across properties backed by government-sponsored enterprises (GSEs). The new requirements apply to any loan applications issued after the effective date.
Key Lease Requirements
Under the new policy, all leases at GSE-financed properties must include:
- 30-day advance notice before rent increases take effect
- 30-day notice before lease expiration
- FIve-day grace period for late rent payments before penalties apply
Who Must Comply?
These requirements apply to new multifamily loans backed by Fannie Mae and Freddie Mac, with some exceptions, including:
- Manufactured housing communities
- Cooperative housing loans
- Leases shorter than two months
- Certain non-standard loan documents
Compliance and Penalties
Borrowers will have six months to integrate the lease standards into new agreements and must achieve full compliance within 24 months of loan closing. Failure to comply could result in a loan default and in penalties of 20 basis points (0.20 percent) of the loan amount.
Why This Matters
Fannie Mae and Freddie Mac introduced these updates as part of a broader effort to improve rental housing stability. By setting minimum lease standards, the policy not only ensures greater transparency, fairness, and predictability for renters across multifamily properties financed by GSE-backed loans, but also will likely increase the administrative burden on owners and property managers.