On Friday, March 27, the $2.2 trillion Coronavirus Aid, Relief, and Economic Security Act, aka the CARES Act, was officially signed into law.
As a locally owned business working with you along every step of the residential journey, @properties views this bill as a truly heartening development amidst the monumental challenges of COVID-19.
We know there are many resources available to learn about the Act. However, we wanted to summarize some of the essential benefits – especially those that may directly or indirectly apply to your real estate needs. Here are some of the key pieces of the CARES Act and related measures:
One-Time Government Payment:
Americans will receive a one-time direct payment from the government, which should arrive within three weeks. The payment will be:
$1,200 for individuals making up to $75,000 per year
$2,400 for couples making up to $150,000 per year
$500 per child
Gradually reduced amounts up to maximum income limits of $99,000 for singles and $198,000 for couples
Use this calculator to see the amount you are likely to receive.
Federal and state unemployment benefits have been expanded to give more assistance to a larger group of people.
Benefits will be available for those who are unemployed, partially unemployed or unable to work because of COIVD-19.
Eligible groups have been expanded to include independent contractors and self-employed individuals.
The federal government will provide $600 per week on top of state unemployment payments. The federal assistance is available through July 31, 2020
State benefits have been extended by 13 weeks to a total of 39 weeks.
[ILLINOIS] For more information about unemployment benefits, click here.
[INDIANA] For more information about unemployment benefits, click here.
[MICHIGAN] For more information about unemployment benefits, click here.
[WISCONSIN] For more information about unemployment benefits, click here.
[GEORGIA] For more information about unemployment benefits, click here.
Small Business Loans
A number of small business loan programs have been expanded or created under the Act. These include SBA Bridge Loans, Economic Injury Disaster Loans (EIDL) and the new Paycheck Protection Program (PPP).
The PPP is a powerful lifeline to small businesses and their employees, enabling eligible companies to borrow up to 2.5 times their average monthly payroll costs, up to $10 million. These funds can be used to continue paying employees, providing benefits and covering operational expenses such as rent and utilities. The loan offers partial or full forgiveness based on the business meeting certain requirements.
Though not mandated by CARES, certain banks and government entities are offering mortgage payment deferral or forbearance.
Borrowers whose loans are owned by Fannie Mae or Freddie Mac may defer mortgage payments for 60 days. The deferred amount will be due upon loan maturity or sale of the property, whichever occurs first.
The entities will also allow forbearance, in which the borrower may lower or suspend payments, initially for six months and potentially for up to a year. However, the full amount must be repaid at the end of the forbearance period.
Late charges, penalties and reporting of past-due payments to credit bureaus are suspended.
Fannie and Freddie also have halted all foreclosure sales until May 17, 2020.
Many banks are offering similar programs but as of right now tend to be working with borrowers on a case-by-case basis.
Further guidance from the government should be forthcoming on a number of elements of the CARES Act. Please continue to think of us as a community resource in the days and weeks ahead. Together, we will weather the storm and make a strong recovery.