Congressional COVID Relief Bill Includes Rental Assistance and Extension of Federal Eviction Moratorium

The CRE Finance Council Reports:
Relief from Troubled Debt Restructuring until January 1, 2022, rental assistance, and a one-month extension of the CDC’s eviction moratorium are included according to summaries of the agreement. The bill also includes an additional $300 per week in unemployment insurance through March 14, and direct payments of $600 for individuals making up to $75,000 per year and $1,200 for couples making up to $150,000 per year, as well as a $600 payment for each child dependent. 

Small businesses receive $325 billion, including $284 billion for first and second forgivable PPP loans, dedicated set-asides for very small businesses, and expanded eligibility to 501(c)(6) nonprofits. Low-income communities also receive $20 billion for new SBA grants. It also provides funding for vaccine distribution, food assistance, tax breaks, and money for education and child care. This agreement also includes $15 billion in dedicated funding for live venues, independent movie theaters, and cultural institutions.

What’s Out
The agreement does not include a liability shield for businesses and direct financial aid for states and cities that are facing pandemic-related budget shortfalls.

What Matters Most to Commercial Real Estate
TDR Relief Extended – CREFC has been advocating for months to extend the CARES Act’s temporary suspension of generally accepted accounting principles (GAAP) requirements for the Troubled Debt Restructuring (TDR) classifications on loans so that banks and life insurance companies can continue to work with their CRE borrowers. 

Sec. 541 extends temporary relief from TDRs under the CARES Act for an additional year, to January 1, 2022. The legislation also clarifies that insurance companies are included in this relief. This is a major win for CREFC members. Read a summary of the financial services provisions. 

Rental Assistance – Sec. 501(b) sets up a $25 billion rental assistance program to be distributed by state and local governments with populations of 200,000 or more. Each state shall receive no less than $200 million. Funds may be used for direct financial assistance, including current and past-due rent, utilities and home energy costs, utilities, and home energy costs. Eligible households may receive up to 12 months of assistance, plus an additional three months if necessary. The relief is targeted to households that are at or below 50% of the area median income, or where one or more members of the household has been unemployed for 90 days or longer. Landlords may apply on behalf of tenants or tenants may apply directly for this assistance. Read more about rental assistance. 

Eviction Moratorium – Sec. 502 extends the rental eviction moratorium issued by the Centers for Disease Control and Prevention (CDC) through January 31, 2021.

CECL Relief – Sec. 540 extends temporary relief to financial institutions from complying with Current Expedited Credit Loss (CECL) accounting standard through January 1, 2022.