Coronavirus: The American Rescue Plan Act FAQs
The recently enacted COVID-19 relief legislation, the American Rescue Plan Act, included $9.9 billion in relief for homeowners to be administered through a new Homeowner Assistance Fund (HAF). These funds, which will soon be made available to eligible homeowners through their states, may be used for assistance with mortgage payments, homeowner’s insurance, utility payments, and other specified purposes.
The HAF was created to prevent mortgage delinquencies and defaults, foreclosures, loss of utilities or home energy services, and displacement of homeowners experiencing financial hardship after January 21, 2020. The law prioritizes funds for homeowners who have experienced the greatest hardships, limits eligibility based on need, and can only be used for certain qualified expenses, outlined in more detail below.
PPP Fix For “Schedule C Filers” Introduced
Bipartisan legislation has been introduced to increase the equity for “Schedule C Filers”—independent contractors, sole-proprietors, and the self-employed—who took out Paycheck Protection Program (PPP) loans prior to March 2021. S. 1249, the PPP Flexibility for Farmers, Ranchers, and the Self-Employed Act—cosponsored by Senators Cardin (D-MD), Lankford (R-OK), Baldwin (D-WI), Collins (R-ME), King (I-ME), Portman (R-OH) and Marshall (D-OH)—allows those borrowers to receive the difference in loan amount they received and the loan amount they would currently qualify for under the new calculation method.
Schedule C filers initially were required to use net profits—which deducts business expenses from the total—when calculating their PPP loan amounts, which does not accurately reflect their income and resulted in lower loan amounts for many. In March, President Biden announced an important change to the program, allowing Schedule C filers to use either net profits or gross income—which does not require deducting business expenses—when calculating their loan amount. However, that change was not retroactive, leaving borrowers from before March 2021 with lower loan amounts than they would qualify for under the new calculation method.
S. 1249 fixes that issue by allowing those borrowers to apply for and receive the difference in loan amount they qualified for originally, and would qualify for now using gross income to base their calculation off of. NAR’s membership includes a large number of independent contractors and sole proprietors, and NAR sent a thank-you letter to the cosponsors in support of the legislation.
House Passes SAFE Banking Act
On Monday, April 19, the House of Representatives passed H.R. 1996, the Secure and Fair Enforcement (SAFE) Banking Act, by a bipartisan vote of 321–101. Cosponsored by Representatives Perlmutter (D-CO), Stivers (R-OH), Velazquez (D-NY), and Davidson (R-OH), the bill provides a clear framework for cannabis businesses—or businesses that work with them—access to federally-insured financial institutions in states that have legalized cannabis.
Currently, cannabis businesses cannot legally bank with federally-insured financial institutions as it is still a federally-controlled substance. As more states legalize cannabis use—currently 36 states and four territories have legalized it for medicinal or recreational use—the industry is rapidly growing, with more than $10 billion in sales and $1 billion in state tax revenue already recorded. Denying these businesses and the businesses that provide them with goods and services, including real estate professionals and property managers with cannabis business clients, access to national banks presents significant challenges both to the businesses and the communities they are in. In many areas, these businesses are all-cash, which presents safety issues and makes it difficult to track earnings and pay taxes. Technically, businesses that are paid by such businesses—such as property managers, transport, and the owners of properties that are leased to the businesses—are also barred from holding those proceeds in federally-insured banks as well.
The SAFE Banking Act creates a carve-out to allow such businesses access to national FDIC-insured banks, which, in addition to addressing the problems already covered, makes it easier for them to track the growth of this industry and enforce anti-money laundering requirements.
NAR supports the rights of states and residents of those states to create laws aligned with state and resident interests. NAR supports allowing businesses that are properly registered and that are legitimate by state standards to have the ability to access banking services. NAR sent a letter of support to the cosponsors of this bill ahead of its passage, thanking them for introducing this important legislation, and will now turn to advocating for its passage in the Senate.
Treasury Issues Homeowner Assistance Fund Guidance
The recently enacted American Rescue Plan Act included $9.9 billion in relief for homeowners to be administered through a new Homeowner Assistance Fund (HAF). These funds, which will soon be made available to eligible homeowners through their states, may be used for assistance with mortgage payments, homeowner’s insurance, utility payments, and other specified purposes under the law and guidance.
The HAF was created to prevent mortgage delinquencies and defaults, foreclosures, loss of utilities or home energy services, and displacement of homeowners experiencing financial hardship after January 21, 2020. The law and guidance prioritize funds for homeowners who have experienced the greatest hardships, limits eligibility based on need, and can only be used for certain qualified expenses.
The statute requires the Department of Treasury to provide a minimum of $50 million for each state, the District of Columbia and Puerto Rico; $498 million for Tribes or Tribally designated housing entities and the Department of Hawaiian Home Lands; and, $30 million for the territories of Guam, American Samoa, the U.S. Virgin Islands, and the Commonwealth of the Northern Mariana Islands. These allocations will be based on homeowner need determined by reference to (1) the average number of unemployed individuals; and (2) the number of homeowners with late mortgage payments or foreclosures. States must apply for the funds by April 25 and develop their programs according to the new Treasury guidance for distribution to homeowners in need.
See NAR’s Summary for more information on the HAF and Treasury guidance.
REALTOR-backed Rental Assistance Bill Passes Ohio Senate
The Ohio Senate has passed Senate Bill 110 which makes an appropriation of $465 million in FY 2021 to the Development Services Agency to fund an emergency rental assistance program. Ohio REALTORS testified in support of the bill, which is now in the House.
Dayton Mayor to Run for Governor, Potential Successors Line Up
Dayton Mayor Nan Whaley has announced that she will run for Governor in the 2022 Ohio gubernatorial election. Her announcement comes in the wings of her announcement earlier this year that she would not seek re-election for Mayor.
A three-way race has emerged to replace Mayor Whaley and the top two vote-getters in the May 4 primary will face off in the November general election.
- Former Mayor Gary Leitzell
- City Commissioner Jeff Mims
- Retired firefighter Rennes Bowers