FAQ: COVID-19 Financial Assistance, Loans, and Federal Stimulus
March 27, 2020
The Federal government is making assistance available to individual workers, families and businesses to help mitigate the economic and financial impacts of COVID-19. Details of some of these programs are still to be determined. We will update this page with more information as it becomes available.
Q. What financial assistance is available to me if my income has been impacted by COVID-19?
A. On March 25, the U.S. Senate passed a $2.2 trillion stimulus package designed to help individuals, families and businesses impacted by COVID-19. The stimulus bill still needs to pass the House of Representatives, and details still need to be published about some of the programs.
However, there are two key benefits included in the stimulus that benefit individuals and families. (Additional measures provide assistance to small businesses – see more below.)
- Direct payments to Americans. Every adult with an annual income of less than $75,000 will receive $1,200, and families with children will receive an additional $500 per child. These payments will scale down for those with incomes above $75,000, phasing out entirely at $99,000 for individuals and $198,000 for married couples. Payments likely will be delivered to U.S. households in early April.
- Expansion of unemployment benefits. Unemployment benefits have been extended by 13 weeks. (Current unemployment benefits last for between 12 and 26 weeks in Virginia.) The stimulus package also includes an extra $600 per month for four months. The Virginia Employment Commission has information on filing claims for unemployment benefits on its website.
Importantly, the unemployment benefits included in the stimulus package apply to independent contractors, which includes many real estate professionals, as well as workers who are furloughed, gig workers, and freelancers. The U.S. Department of Labor will publish guidance about the mechanics for qualifying for unemployment benefits as an independent contractor.
The $2.2 Trillion stimulus package includes a number of other initiatives. See NAR for more information.
Q. What assistance is available to small business owners or sole proprietors that are negatively impacted by COVID-19?
A. A small business owner can apply for loans through the U.S. Small Business Administration’s 7(a) loan program, which is the SBA’s primary program for providing financial assistance to small businesses. The stimulus package bill includes $350 billion for loans to small businesses through the 7(a) loan program. Eligible businesses can get up to $10 million toward mortgage interest, rents, utilities, and payroll costs. A portion of these loans may be forgivable. The National Association of REALTORS® has information about the 7(a) loan program.
The SBA also has established the Economic Injury Disaster Loan Assistance (EIDLA) program specifically to assist small businesses impacted by COVID-19. The EIDLA program provides small businesses with working capital, low-interest loans of up to $2 million that can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing as a result of COVID-19. The EIDLA application is available on the SBA’s website.
Q. Is my business eligible for the SBA’s Economic Injury Disaster Loan?
A. If your business has 500 or fewer employees and your business has been impacted by COVID-19, you may be eligible. Loans are available for sole proprietors, corporations, partnerships, non-profits, Limited Partnerships, Trusts, and Limited Liability Entities. Examples of Sole Proprietorships include individuals with rental properties, home-based businesses, and self-employed trades. EIDLs are for working capital which includes fixed debts, payroll, accounts payable, and other bills that cannot be paid due to the disaster’s impact. It does not cover lost sales.
The Virginia Small Business Development Center (SBDC) has a step-by-step walkthrough of the application process.
Q. As a business owner, are there benefits I need to offer to my employees as a result of Federal legislation?
A. On March 18, the U.S. Congress passed the Families First Coronavirus Response Act (FFCRA), which requires certain employers to provide employer-paid sick time and expands the Family Medical Leave Act (FMLA) for employees who are impacted by COVID-19 or caring for family members who are impacted by COVID-19.
Q. Is my firm covered by the FFCRA?
A. The FFCRA covers all private employers with fewer than 500 employees; however, small businesses with fewer than 50 employees may qualify for an exemption from the requirement to provide paid leave due to school closings or unavailability of childcare, if the leave requirements would jeopardize the viability of the business. More information can be found on the U.S. Department of Labor’s website and the National Association of REALTORS® website.
Q. Are independent contractors entitled to paid leave?
A. Self-employed individuals (independent contractors) may be eligible for paid leave administered through refundable tax credits. More information can be found on the National Association of REALTORS® website.
Q. What do I need to know if I own a multifamily rental property?
A. The Federal Housing Finance Agency (FHFA) has issued guidance allowing lenders to grant forbearance to borrowers with multifamily properties financed by Fannie Mae for up to three months. As part of the forbearance plan, borrowers must agree to suspend evictions of tenants who are facing financial hardship due to the COVID-19 crisis. Fannie Mae’s website has information about the multifamily forbearance program, though mortgage holders will need to contact their individual lenders directly.
Q. What if I am having trouble making my own mortgage payment?
A. On March 18, FHFA directed Fannie Mae and Freddie Mac to suspend foreclosures and evictions for single-family homeowners for at least 60 days due to the COVID-19 emergency. The foreclosure and eviction suspension applies to homeowners with a mortgage backed by Fannie Mae or Freddie Mac.
Earlier in March, FHFA announced that Fannie Mae and Freddie Mac would provide payment forbearance to borrowers impacted by COVID-19. Forbearance allows for a mortgage payment to be suspended for up to 12 months due to hardship caused by COVID-19. Borrowers should contact their lender directly for more information on forbearance options.
Q. Do you have clients that participate in USDA-backed single-family and multi-family programs?
A. If so, please check out this comprehensive document from the USDA Rural Development office on the immediate actions they have taken to help rural residents, businesses, and communities affected by the COVID-19 outbreak.
You might also like…
Key Takeaways: October 2024 Virginia Home Sales Report
By Virginia REALTORS® - November 22, 2024
Key Takeaways There was a surge in closed sales activity in October in Virginia’s housing market. The influx of sales was driven by a jump in pending sales… Read More
A Profile of Renters in Virginia Over the Last Decade
By Dominique Fair - November 14, 2024
Renters have experienced a series of ups and downs in the rental market over the last 10 years. The U.S. Census Bureau has released their American Community Survey… Read More
More People Moved to Virginia Than Out of the State Last Year
By Sejal Naik - November 6, 2024
Each year since 2005, the U.S. Census Bureau determines whether respondents of its surveys lived in the same residence a year ago. If people have moved, then the… Read More