Cares Act Compliance Notification
Provided by AAGD Members Jennifer Owen, Bobby Rodriguez and Vince Vela at Higier Allen & Lautin, P.C.
Pursuant to the recent press release from the National Apartment Association, Fannie Mae and Freddie Mac are no longer enforcing compliance with the CARES Act 30-day notice to vacate requirement for Enterprise-backed housing.
Updated Loan Requirements for Fannie Mae and Freddie Mac
- In late 2021, Fannie Mae and Freddie Mac established CARES Act notice policies that required borrowers to adhere to the CARES Act eviction notice requirements as a material term of their loan agreement.
- However, Fannie Mae and Freddie Mac just announced that they will no longer require CARES Act compliance in relation to the loan processes with borrowers. Specifically, Fannie Mae has eliminated compliance enforcement regarding required notices and lease audits. Additionally, Freddie Mac no longer requires lenders to remind prospective borrowers during origination of the CARES Act’s 30-day notice to vacate or have flyers given out with information about the CARES Act’s protections and renter assistance programs.
- It is important to remind multifamily borrowers that this policy change will not amend their loan documents and their obligation to comply with their currently existing loan terms, including all laws and regulations applicable to the property, remains ongoing.
Key Points
- While this policy change will likely impact loan documents going forward, it is unclear whether it will affect your loan documents created prior to this policy change. It is important to confer with local counsel regarding any loan specifics.
- Even though Fannie Mae and Freddie Mac are no longer requiring compliance with the CARES Act 30-day notice in their loan documents, State laws may still require specific notice periods or have their own eviction protections. Regardless, there remains no private right of action under the CARES Act for a tenant to sue the owner for alleged violations of the CARES Act.
What Does This Mean for Owners Regarding Nonpayment Evictions?
- Although Fannie Mae and Freddie Mac no longer require the notice language in their mortgage agreements, the CARES Act itself has not been repealed.
- Because the CARES Act remains in effect, owners should still comply with the 30-day notice to vacate for nonpayment evictions if your property is a “covered dwelling” pursuant to the CARES Act. A ‘covered dwelling’ generally includes properties with federally backed mortgages (e.g., Fannie Mae, Freddie Mac, FHA, USDA) or those participating in federal housing programs (such as Section 8, LIHTC, etc.). If you are unsure whether your property is covered, we would advise you to refer to your loan documents or consult with your local counsel.
- The requirement to issue a 30-day notice to vacate for nonpayment eviction matters will not change until the CARES Act is amended to remove this requirement or repealed by Congress.
Summary
As of October 8, 2025, Fannie Mae and Freddie Mac will no longer enforce CARES Act compliance related to loan processes, including notices and lease audits, though the CARES Act itself remains in effect. Borrowers must continue to comply with all other loan document provisions, and property owners should still adhere to the CARES Act’s 30-day notice to vacate requirement for nonpayment evictions on covered dwellings until the Act is amended or repealed by Congress.
Q+A
How did we get here?
When the CARES Act was passed in 2020, it had both an eviction moratorium and a provision requiring properties with a federally related mortgage, and those participating in other affordable housing programs, to give a thirty-day notice to vacate before filing eviction for non-payment of rent. The eviction moratorium had an expiration date of July 31, 2020; the notice requirement did not have an expiration date and is still in effect today.
How has the CARES Act been enforced?
When Congress passed this provision of the CARES Act, they did not create an enforcement mechanism by giving tenants a private right of action to sue for violations. As a result of the law, there were basically two enforcement mechanisms. One was making it a condition of Fannie and Freddie loans, which meant lenders put a requirement to comply in all loan agreements. The second was the eviction process – JPs don’t grant a judgment unless the notice was properly given. As a result of the Notification, the first one has been taken away – compliance is no longer a condition for a Fannie or Freddie loan. But the second one – it being raised as a defense by the tenant or a requirement by the Justice of the Peace – is still in place and will be until Congress repeals or amends this provision of the CARES Act.
When will Congress repeal this provision of the CARES Act?
We don’t know. There is a bill – HR 1078, the Respect for State Housing Laws Act – which would end the requirement in the CARES Act to give thirty-day notices in non-payment of rent evictions. It is currently before the House Committee on Financial Services.
How does this affect my loan agreement if I have a Fannie or Freddie loan?
It depends on the wording of your loan agreement. Your lender may be willing to amend the loan agreement in light of this new guidance. However, the Notification itself states that this announcement does not change “Borrowers’ ongoing obligation to comply with all provisions of the applicable Loan Documents, including provisions regarding compliance with all laws applicable to the Property.”
Did the Notification repeal or supersede the CARES Act?
No. Both the Notification and the NAA email update acknowledge that the CARES Act is still in effect. It will take the passage of HR 1078, or other action by Congress, to definitively end this requirement.
Can a tenant still raise as a defense in an eviction for non-payment of rent that they did not receive a thirty-day notice to vacate?
Yes. In Dallas and its surrounding counties, most tenants are represented by counsel from DEAC or other legal aid agencies. We anticipate tenants’ attorneys will continue to argue that CARES Act properties must give a thirty-day notice to vacate in non-payment of rent cases, and Justices of the Peace will rule for the tenant when the notice has not been given.
Will this change on January 1, 2026, when SB 38 goes into effect?
Since 2020, there have been various challenges to this provision of the CARES Act in courts around the country. Some of those cases have been successful. An appellate court in Virginia ruled that the thirty-day period runs from the giving of the notice to the execution of the writ, which is the date that tenant actually loses possession of the property. Consequently, the eviction could proceed during the thirty-day period after giving the notice so long as the tenant was not removed from possession before the expiration of thirty days. That interpretation was adopted by the Texas legislature in SB 38. However, we don’t yet know if local judges will accept that interpretation. TAA has received indications from the Justice Court Training Center that such an interpretation is not consistent with Texas eviction law, which requires the tenant’s contractual right to possession to have expired prior to filing the eviction. Local Justices of the Peace will have the discretion to decide individual cases in their courts based on their understanding of the law.
Do I still need to give a notice of proposed eviction before giving a notice to vacate? No! The City of Dallas ordinance requiring a proposed notice of eviction has not been enforced since September 1, 2023, when the state pre-emption law took effect.
If you have any questions about this guidance, please contact Jason Simon, AAGD Vice President of Government Affairs, at 972-739-9505 or jsimon@aagdallas.com.
This is general guidance for educational purposes and does not constitute legal advice for your specific situation.