On March 27, President Trump signed the Coronavirus Aid, Relief and Economic Security (CARES) Act, a $2 trillion emergency spending bill, into law. After some back and forth in the House, the CARES Act was approved and moved to the Senate, where it was immediately directed to President Trump.
The CARES Act is meant to help individuals and businesses make it through this challenging and uncertain period of time as the world faces the COVID-19 pandemic. While the relief act will generally support all tax-paying citizens, real estate agents in particular should pay special attention to multiple sections.
Under the CARES Act, all individuals will receive $1,200 if their income is below $75,000, and couples filing jointly will receive $2,400 if their income is below $150,000. Each will receive an additional $500 per child. However, the amounts received will be less for those who surpass that bracket, and individuals whose income is more than $99,000 and couples who bring in more than $198,000 will not receive anything. These payments are based on 2018 or 2019 tax filings.
Another major facet is those receiving unemployment compensation. Due to health and safety closures, many restaurants, bars and other person-to-person services have laid off their employees. In addition to the amount each person would receive from the state, the federal government will add $600 per week for up to four months. The main change to unemployment compensation is that self-employed individuals and independent contractors may also be able to qualify for “Pandemic Unemployment Assistance”; however, this excludes those who are able to telework or receive sick leave or other paid leave benefits.
Brokers or agents who work with a team may be eligible for emergency grants or forgivable loan programs so long as their business has fewer than 500 employees. These companies would be able to receive 250 percent of the average salary payments per month reported for the year prior to the loan, up to $10 million. Whatever portions that are used to keep workers employed, pay rent or utilities or cover existing debt could be forgiven.
For companies who are looking for immediate assistance, the bill provides up to $10,000 in emergency funds. These would be available for qualifying small businesses in order to cover immediate operating costs. In addition to this, a portion of the bill is allotted to cover six months of payments for small businesses that have already taken small business loans.
As housing experts, it’s crucial for agents to be well-informed about everything happening in the real estate market. In response to a need, homeowners who have borrowed through government-backed mortgages, including Fannie Mae, Freddie Mac, HUD, VA and USDA, are able to postpone their payments for up to 360 days. During this time period, there can be no additional fees, penalties or interest accrued. Also, there cannot be any foreclosures for 60 days after March 18, 2020, unless the property is already abandoned or vacant.
For those who are renting units in a multifamily property, if they’re current on their mortgage, they are also able to postpone payments for 30 days and then reapply for an additional 60 days if needed. These owners may also not evict residents or charge late penalties due to non-payment during this period. Multiple forms of monetary support are also being released to cover programs such as Section 8 rental assistance, Section 202 Housing for the Elderly, Section 811 Housing for Persons with Disabilities, and project-based rental assistance in order to make up for losses from reduced tenant payments.
Finally, taxes for both individuals and businesses have been put on hold. The new filing date has been postponed until July 15. Small businesses with fewer than 100 employees may be able to claim a refundable employee retention tax credit of up to $5,000 per employee. Employers or those who are self-employed also have the ability to delay payments of the employer-portion of Social Security or one-half the self-employment taxes until after 2020.
In this time of uncertainty, individuals and businesses are turning to anyone who can help. At this stage, all we can do is prepare in the best way possible and hope for a levelling-off of the spread. To read the full document and determine how the CARES Act will most affect you, you can visit the Congress website.
During this time of crisis, you may feel unsure or have questions about how you can keep your business going during this time. In the Secrets of Top Selling Agents Facebook Group, you can ask your questions to a community of real estate professionals to get some tips on how they are coping in their markets. Check out our video tabs on our group to see topics from industry experts advising agents on how to navigate with the uncertainties we’ve been presented with these past three weeks.
As an added bonus, join real estate’s video expert and best-selling author Marki Lemons-Ryhal on our next series of Facebook Live Events, starting on April 6, for five days straight. Over the five days, Lemons-Ryhal will break down each step-by-step process needed for you to finally create that video strategy you’ve always wanted.
Now is the time to implement your video strategy for your business! Remember, you need to be a member of our Secrets of Top Selling Agents Facebook Group to participate. Join today!
Mark Mathis is vice president of Sales for Homes.com. For more information, please visit marketing.homes.com.