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.