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Cares Act & CRE

Donald Trump signed the $2T Coronavirus Aid, Relief, and Economic Security Act on March 27th, 2020.  Here is how it is affecting the CRE industry:

  • Offers forgivable paycheck protection loans (PPLs) that are calculated based on payroll expenses where up to 25% of the proceeds can be used to pay rent without jeopardizing the loans eligibility for loan forgiveness.

  • A provision in the act waives early withdrawal penalties in retirement accounts for distributions up to $100K if used for “coronavirus purposes.” These funds can be used to pay rent or other occupancy expenses.

  • The CARES Act places a 120-day moratorium on residential evictions for tenants occupying properties financed by federally-backed loan. During this time, landlords are barred from charging any fees penalties, or other charges to residential tenants based on nonpayment of rent.

  • Certain home mortgages and multifamily loans participating in federally backed programs are eligible for payment forbearance of up to 90 days. 

  • There's an expansion of the Small Business Reorganization Act of 2019 (SBRA) which allows for small businesses a less costly way to access the benefits of reorganization via bankruptcy.

  • Certain federal contractors can be reimbursed for employee pay and sick leave if the pandemic has forced them to halt work temporarily at federally owned sites.

#CaresAct #PPP #SBA #Evictions #Forbearance

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