The Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed on March, 27, 2020. This $2 trillion economic stimulus bill will provide a cash stimulus for families in the amount of $1,200 per adult plus $500 for each child under the age of 17. Anyone who files for unemployment will also receive $600 per week in addition to whatever they would normally receive. In addition, this bill addresses relief specific to homeowners and business owners.
Here’s What You Need to Know:
1. Mortgage Forbearance
Borrowers of government-backed mortgages ((Fannie Mae, Freddie Mac, HUD, VA and USDA) can request up to 360-day payment forbearance without proof of hardship. No additional fees, interest, or penalties can be assessed for the forbearance. Except for abandoned or vacant property, there may be no foreclosure actions for 60 days from 3/18/2020.
2. Owners of Multifamily Properties
Owners who were current on their mortgage payments as of February 1, 2020, and have federally insured, assisted, or supplemented loan (Fannie Mae, Freddie Mac, FHA or any loans backed or assisted by any branch of the federal government, including LIHTC) may request forbearance for 30 days due to financial hardship, with extensions of up to a total of 90 days. Borrowers receiving the forbearance may not evict or charge late fees to tenants for the duration of the forbearance period.
3. Eviction Filings
Moratorium on eviction filings, or fees or penalties for tenants for nonpayment of rent for 120 days on properties insured, guaranteed, supplemented, protected, or assisted in any way by HUD, Fannie Mae, Freddie Mac, the rural housing voucher program, covered by the Violence Against Women Act of 1994.
4. Rental Assistance
$1.25b for Section 8 voucher rental assistance for seniors, the disabled, and low-income working families, who will experience loss of income from the coronavirus
5. Community Development Block Grant
$5b for CDBG to help communities and states address COVID-19.$1 billion for project-based rental assistance to make up for reduced tenant payments as a result of coronavirus.
6. Low-Income Seniors
$50m for Section 202 Housing for the Elderly to maintain housing stability and services for low-income seniors.
7. Housing for Persons with Disabilities
$15 million for Section 811 Housing for Persons with Disabilities to make up for reduced tenant payments as a result of coronavirus.
8. Project-based Rental Assistance
$1 billion for project-based rental assistance to make up for reduced tenant payments as a result of coronavirus.
The CARES Act may provide some homeowners with a bit of relief during this time period. This may be the first of upcoming legislation to address aspects of real estate and housing as the pandemic continues to evolve.