The CARES Act, also known as the Coronavirus Aid, Relief, and Economic Security Act, was signed into law by President Trump on Friday, March 27, 2020. Here’s a summary of some of the provisions of the CARES Act related to the real estate industry.
- Mortgage Forbearance – Borrowers of government-backed mortgages (Fannie Mae, Freddie Mac, HUD, VA and USDA) can request up to 360-day payment forbearance without proof of hardship.
- No additional fees, interest, or penalties can be assessed for the forbearance.
- Foreclosure Actions – No foreclosure actions can continue or commence, except in a situation for abandoned or vacant property, for 60 days from 3/18/2020.
- Multi-Family Properties – The CARES act also provides relief to owners of multifamily properties who were current on their mortgage payments as of February 1, 2020, and have federally insured, assisted, or supplemented loan (Fannie Mae, Freddie Mac, FHA or any loans backed or assisted by any branch of the federal government, including LIHTC). These owners may request forbearance for 30 days due to financial hardship, with extensions of up to a total of 90 days. Borrowers receiving the forbearance may not evict or charge late fees to tenants for the duration of the forbearance period.
- Eviction Actions – The CARES Act creates a national moratorium on filing for eviction, issuing a notice to vacate, or charging fees or penalties, associated with a tenants’ nonpayment of rent for 120 days. This moratorium applies to any property that is insured, guaranteed, supplemented, protected, or assisted in any way by HUD, Fannie Mae, Freddie Mac, the rural housing voucher program, or covered by the Violence Against Women Act of 1994.
- Some Additional items in the CARES Act applicable to Real Estate –
- $1.25 billion for Section 8 voucher rental assistance for seniors, the disabled, and low-income working families, who will experience loss of income from the coronavirus;
- $5 billion for Community Development Block Grant Programs to help communities and states address COVID-19;
- $1 billion for project-based rental assistance to make up for reduced tenant payments as a result of coronavirus;
- $50 million for Section 202 Housing for the Elderly to maintain housing stability and services for low-income seniors;
- $15 million for Section 811 Housing for Persons with Disabilities to make up for reduced tenant payments as a result of coronavirus
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