CARES Act Section 4024 - Temporary Prohibition of Eviction on Properties Financed by Federally Backed Mortgage Loans

Other states and local jurisdictions have drafted similar provisions to provide greater protections to tenants. This update summarizes Section 4024 of the CARES Act, which establishes a temporary moratorium on residential eviction filings for tenants living in certain properties that are part of government programs or are financed by Federally backed mortgage loans (Temporary Eviction Moratorium).

Section 4024 of the CARES Act provides that landlord of a “covered dwelling” is prohibited from: 

1. filing a legal action to recover possession of the covered dwelling from the tenant for nonpayment of rent; and
2. charging the tenant any fees or penalties because the tenant has not paid rent.

Covered dwellings include those dwellings that are on or in “covered properties,” which in turn are defined by the CARES Act as a properties that:

1. participate in a “covered housing program” as defined by the Violence Against Women Act;
2. participate in the “rural housing voucher program under section 542 of the Housing Act of 1949”; or
3. have a “Federally backed mortgage loan” or a “Federally backed multifamily mortgage loan.”

The Temporary Eviction Moratorium will last for a period of 120 days, which began on March 27, 2020 and will end on July 25, 2020 (the Moratorium Period). During the Moratorium Period, the landlord of a covered dwelling is prohibited from issuing a tenant a notice to vacate. Once the Moratorium Period has ended, the CARES Act provides that the landlord must give the tenant thirty (30) days to vacate the rented premises and cannot require the tenant to vacate at an earlier time.

The CARES Act defines “Federally backed mortgage loans” as loans secured by any lien on residential properties designed principally for the occupancy of from one to four families and that are “made in whole or in part, or insured, guaranteed, supplemented, or assisted in any way, by any officer or agency of the Federal Government or under or in connection with a housing or urban development program administered by [HUD] or a housing or related program administered by any other such officer or agency, or is purchased or securitized by the Federal Home Loan Mortgage Corporation or the Federal National Mortgage Association.”

A “Federally backed multifamily mortgage loan” has the same definition as “Federally backed mortgage loan,” except that (i) this loan is secured by a property designed principally for the occupancy of five or more families, and (ii) this loan cannot be a temporary financing loan such as a construction loan.