From tips on applying for the Paycheck Protection Program loan to next steps in Congress, National Association of REALTORS® leaders and staff experts provided answers to members’ top questions on NAR’s COVID-19 response Wednesday during the Leadership Live event.
“NAR’s message is two-fold,” said President Vince Malta, opening the Facebook Live event. “First, please take care of yourself and your loved ones. Second, your well-being and your business are of paramount importance for NAR. In fact, the entire leadership team would like you to know we’re here for you.” Roughly 16,500 members tuned in to the hour-long event led by Malta and CEO Bob Goldberg.
Among other topics, the session covered highlights of the Coronavirus Aid, Relief, and Economic Security Act, including the Small Business Administration’s relief programs, unemployment benefits, what building owners can do when renters can’t pay, and measures NAR is advocating for in the next round of congressional relief. Here are a few highlights below.
SBA Logjam
Part of the CARES Act is a $350 billion relief package for small-business owners, independently owned franchisees, sole proprietors, independent contractors, and self-employed individuals who are struggling to pay their bills due to the new coronavirus. The biggest piece of this is the public-private distribution of the Paycheck Protection Program forgivable loans. Small businesses are eligible to borrow 250% of their average monthly payroll expenses (with individual salaries capped at $100,000 per year), up to a total of $10 million.
“Along with the SBA’s PPP, we have our own PPPs. You need to be prepared, persistent and patient,” said NAR Senior Representative for Advocacy Erin Stackley.
That means making sure you have all the required documents to demonstrate what you earn, including your 1099 if you’re an independent contractor and payroll tax filings if you’re an employer. Persistence is required because lenders are prioritizing applications from existing customers. “If you go to one SBA lender who doesn’t take your application, try another. There are tools on the SBA site that can help you find an SBA lender,” Stackley said.
“And be patient. We know there is a need for these funds,” Stackley said. “There’s going to be some amount of log-jamming.”
In addition to PPP, the SBA is also distributing $10,000 grants through the Economic Injury Disaster Loan program. These funds are meant to cover working capital needs and must be used for separate purposes than the PPP funds. So, if a business owner receives both PPP and EIDL funds, it’s important to carefully keep track of how each set of funds are used. Read more on NAR’s FAQ page covering the SBA programs.
Property Owner Squeeze
Megan Booth, NAR’s director of federal housing, valuation, and commercial real estate policy and programs, said about 45% to 50% of the national multifamily portfolio has an FHA or GSE loan. However, in buildings with federally assisted loans, she said there’s “a real disconnect” between tenants’ 120 days of protection from eviction and the 90 days of forbearance for property owners.
“NAR is aware and working with Congress on this issue,” Booth said. Meanwhile, to improve cash flow, building owners can call their servicer or loan provider to request a forbearance. They may also apply for an SBA loan or other bridge funding or take advantage of penalty-free withdrawals of up to $100,000 from retirement accounts, as long as the money is replaced or the tax paid within three years.
There’s also a tax benefit that property owners can get under the CARES Act, Booth said, that allows property owners to use carryback net operating losses against profitable years, including tax years 2018, 2019, and 2020.
“Protecting tenants is important, but if housing providers can’t make the mortgage payments, housing will be lost anyway. So, we need to protect both ends of the spectrum,” Booth said.
Unemployment for Independent Contractors
Designed with the help of advocacy efforts from NAR, unemployment under the CARES Act will provide 39 weeks of compensation for independent contractors and self-employed individuals. The program is fully funded by the federal government, but states must administer it as they do traditional unemployment benefits. Nia Duggins, a policy representative for NAR, said check with your state labor department or workforce development agency responsible for administering unemployment payments for more information.
“If you’re only able to partially work but unable to close transactions due to COVID-19 restrictions, you’re eligible to apply through your state as long as your state is participating,” Duggins said. Read more in NAR’s unemployment FAQs.
Congress’ Next Move?
Congress isn’t expected back in session until April 20 at the earliest. But congressional leadership and the president have been working on another iteration of that rescue package.
“Everyone is in agreement that more funding is needed for the Paycheck Protection Program,” said NAR Senior Vice President of Advocacy Shannon McGahn. “In fact, a couple of hours ago, we got the text of the Senate bill and it’s under two pages—simply extending more funding (for the program). We’ve learned that on Capitol Hill, the shorter the bill the more they mean business.”
What makes REALTORS® so effective on the hill, McGahn said, is “we’re not representing a special interest; we’re representing everyone’s interests. That means our REALTOR® members, property owners, consumers in the transaction, and the industry and business as a whole.”
Right Tools, Right Now
NAR has set up a hotline, 800-874-6500, to answer members’ questions on COVID-19, the CARES Act, or the association’s programs and benefits. The hotline is part of Right Tools, Right Now, which NAR launched last week to makes hundreds of NAR products and services available at no cost or reduced cost. “We’ve already had tens of thousands of members taking advantage of the program,” said Goldberg. “Almost $2.5 million in products and services have been given to our membership, and there’s no cap on that. We’ll keep adding to the program.”
NAR is working on answers to questions posted in the comments section during the live event and will have an FAQ posted shortly. In the meantime, you can watch the full Leadership Live event.
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