August Securitization Forbearance Report
Freddie Mac implemented a forbearance relief plan in March that allows qualifying Multifamily borrowers to defer up to three months of mortgage payments. In June, we announced new supplemental relief options for qualified affected borrowers. Today, we are releasing our fifth forbearance report, which details data received from master servicers that demonstrates the impact of these plans on our securitizations.
We found that master servicers reported 1,223 forborne securitized loans, or 5% of our total securitized loan population. This equates to about $7.5 billion of outstanding unpaid principal balance (UPB) and represents 2.4% of our total securitized UPB. Other key findings of the August report include:
- In August, there was a net decrease of 25 loans in forbearance (not including four loans that have completely paid off), the first monthly decline since implementation of the forbearance program in March.
- The majority of loans, 79% by loan count and 73% by UPB, whose forbearance period ended in August or earlier, are currently making payments or have made all their forborne payments.
- A higher percentage of the forborne loans are Small Balance Loans (SBL), at 76% by loan count, but 33% by UPB. Since these properties have fewer units, each tenant experiencing stress has a larger impact on small property performance.
- Of the total $7.5 billion of forborne loans, 10.1% are student housing and 11.7% are seniors housing facilities.
- The vast majority of forborne loans would need to sustain an effective gross income drop in excess of -10% in order to fall below a 1.00x DSCR.
Check out these links for additional information about our forbearance relief program and its impact to our Multifamily securitizations.