The historic $2 trillion federal package passed the House of Representatives on Friday by voice vote, with President Donald Trump signing the 880-page rescue bill just hours later. On Sunday, the President also extended federal social distancing guidelines to April 30. Meanwhile, the multifamily industry is sizing up the package and looking at what’s to come.
The $2 trillion Coronavirus Aid, Relief and Economic Security Act outlines some terms of assistance for the real estate industry. Mortgage payment forbearance, as well as stopping evictions and foreclosures on properties with federally backed loans, are among the focal points. This is largely in line with a previous HUD announcement, urging authorities to suspend foreclosures and evictions within public housing properties.
Multifamily owners that were on time on their mortgage payments as of February 1, but are now facing financial hardships due to the COVID-19 crisis, can seek temporary forbearance by submitting requests to their lenders.
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According to the new legislation, individuals and families will be eligible for direct payments as part of a $250 billion program. Additionally, the Department of Education can suspend student loan payments without penalty through September 30, CNN reported. Unemployment insurance benefits have also been expanded—the federal government can give jobless workers an extra $600 per week for four months, on top of their state benefits. Independent contractors and those with temporary jobs are also eligible to receive federal aid.
Multifamily industry groups applauded the small business loans, payments to consumers, HUD-related benefits, mortgage forbearance and tax benefits. But they vowed to fight for additional protections and corrections to what they see as numerous drafting errors.
The National Multifamily Housing Council and the National Apartment Association, for example, want to see: direct housing assistance outside the package on a sustained basis, similar to FEMA disaster relief; a clarification that eviction relief is for those financially affected by the coronavirus and not for all renters; an extension of forbearance to all financial instruments, not just federally backed loans; and a reconciling of the gap between the 90 days of mortgage forbearance and the 120-day eviction moratorium after which owners must wait three months to begin an eviction.
“You are dragging out a process where the owner will have to deal with a 150-day process while only receiving forbearance for 90 days,” said Kevin Donnelly, NMHC vice president for Government Affairs.
The 120-day eviction ban, meanwhile, does not preempt state and local eviction prohibitions that many states and municipalities are starting to enact.
How and when will these needs be addressed? “Speaker Pelosi has made it clear she sees the need for a fourth and fifth relief packages,” said Donnelly. “The timing for that is up in the air.”
Jobless claims spike
The federal package includes specific measures to address soaring jobless claims, which skyrocketed to a record of almost 3.3 million, according to the U.S. Department of Labor’s latest report. Figures show losses were heavily concentrated in service industries, particularly accommodation and food services. According to NBC News, the previous recorded high came in October 1982, when 695,000 people filed for benefits. In the coming weeks, analysts expect figures to soar further, as job cuts and bankruptcies continue, Politico reported.
As of early Monday morning, the total number of confirmed coronavirus infections in the U.S. had reached 143,025, according to data compiled by Johns Hopkins University.
*The piece was updated on 3/27 and 3/30 to add commentary and reflect the latest developments.