Biden Administration Keeps Extending Renter Friendly Efforts

Details of the new tenant lease requirements from Fannie Mae and Freddie Mac that had been promised in July 2024 are now officially out.

Proposals included standardized rental leases, grace periods for late rents, a right to counsel for tenants facing eviction, the sealing of eviction records and a federal campaign to end discrimination against affordable housing voucher holders based on the source of income. The actual requirements by the GSEs were milder, including three minimum “standards”:

Landlords are required to provide written notice of a rent increase at least 30 calendar days in advance.

They also must provide written notice of lease expiration at least 30 calendar days in advance of expiration.

All landlords must provide a five-day grace period for late rent payments. So if it was due on the first of the month, there can be no penalty levied until the sixth of the month.

The standards must appear in all leases for properties under GSE loans. The policies apply to all loan applications signed on or after February 28, 2025. There are exceptions, like manufactured housing community loans; existing credit facilities including loans funded through credit facility agreements that pre-date the end of February; loans for cooperative housing corporations; or loans originating using non-GSE form loan documents.

Borrowers have to inform all their tenants in writing about the standards. Fannie Mae and Freddie Mac will include questions in their property inspection processes to be sure borrowers meet the requirements. Non-compliant borrowers have at least 30 days to come into compliance. Borrowers who continue not to meet requirements can be assessed a penalty of 0.20% of the original loan amount.

However, while the final rule may be far less encompassing than the originally considered aspects, that may be only a waypoint. The White House has been vocal about changes in laws it’s wanted to see in rental housing.

There’s been a focus on reducing junk fees for renters, attempts to establish an enforced renters’ bill of rights, and a proposal to impose a 5% cap on rent increases. The administration has continued to follow up on goals and tried to find new ways to get them into effect.

Biden has ensured all along to brand his administration’s efforts, which not only belongs to him but Vice President Kamala Harris too. Should she win November’s election, it would seem logical to expect further attempts in the future.