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NAR’s Federal Advocacy team has been working closely with Congress and the Administration to ensure the interests of REALTORS® and their clients are protected in any federal action in response to COVID-19, in addition to minimizing transaction disruptions during these very difficult circumstances. As the actions out of Washington evolve daily, below are a number of Q&As to address the ongoing fixes being proposed and implemented in response to the pandemic.
Congress has now passed four stimulus/relief packages dealing with COVID-19. We have incorporated the provisions of those bills into this document. The Administration is providing more relief by the day. We will update this document as events warrant.
REALTOR® Business Operations
Can I use a remote notary to make my closing happen?
A number of states allow for remote notary at this time. Please, visit NAR's States Issues Tracker for more information (REALTOR® Party login required). NAR is supporting legislation to allow remote notary nationwide. We are pushing for the Remote Online Notary (RON) legislation to be included in any of the disaster relief bills. HUD has also supported the use of remote notaries on FHA transactions. Some states are also issuing Executive Orders to implement remote notary policy. Here's a list of states with Executive Orders.
My county courthouse is closed, how do I file deed and title?
The large majority of courthouses are open, but many still have modified operations. Please consult the real-time database of offices and their operating status as a result of the coronavirus.
Are REALTORS®, including independent contractors, eligible for unemployment?
Yes. Real estate professionals will be eligible to apply for unemployment benefits, under “Pandemic Unemployment Assistance” (PUA) temporary Federal-state program if they have been fully or partially unemployed due to an inability to work as a result of the COVID-19 public health emergency. This includes self-employed individuals and independent contractors. Typically, states base compensation amounts on an individual’s wages from their most recent tax year, and net income from all self-employment that was reported on an individual’s tax return. However, if an individual is eligible to telework with pay, or has paid sick leave or expanded family and medical leave, they are not eligible for unemployment assistance.
The December COVID-relief bill extends the maximum number of weeks individuals may receive unemployment benefits, from 39 weeks to 50 weeks. It also extends all unemployment assistance, including the Pandemic Unemployment Assistance (PUA) program and the Pandemic Emergency Unemployment Compensation from December 26, 2020- March 14, 2021. Eligible individuals may receive PUA benefits until April 5, 2021 as long as the individual has not reached his or her maximum number of weeks of unemployment. It also extends Federal Pandemic Unemployment Compensation (FPUC) at $300 per week for 10 weeks. This provides supplemental unemployment benefits for individuals receiving PUA or regular unemployment compensation for weeks after December 26, 2020 until March 14, 2021; and extends Pandemic Emergency Unemployment Compensation (PEUC) for a maximum of 24 weeks for eligible individuals. The new law phases out the Pandemic Unemployment Assistance (PUA) program and ends the program on April 5, 2021. For individual state and local labor services, including claims filing, see here.
We have more information on unemployment benefits here.
Real estate services have been deemed “essential” in my state, does that mean I’m ineligible for the new unemployment benefits for self-employed?
No. Even if a state deems real estate as an essential service, it does not necessarily mean that an individual is “working” and receiving compensation. For this purpose, whether an industry is “essential” is not relevant to the individual’s eligibility. Individuals are encouraged to apply for unemployment if they have been fully or partially unemployed due to an inability to work, as a result of the COVID-19 public health emergency. Individuals should check with their state labor department or employment commission to determine eligibility and claims filing.
Are there other sources of money for individuals?
The December COVID Relief bill includes direct payments of $600 for individuals making up to $75,000 and $1,200 for couples making up to $150,000, as well as an extra $600 per eligible child dependent. These payments will be sent starting in January, 2021. The IRS has not yet updated their website for the new payments, but we will add a link here when they do.
These payments are in addition to the CARES Act money provided back in April.
In addition, REALTORS® with retirement accounts, including IRAs, can take early withdrawals of up to $100,000 from those accounts without having to pay the 10% early-withdrawal penalty. Those who withdraw such funds can recontribute them to the plan over three years or can keep the money and pay the tax on the withdrawals over a three-year period.
See below for information about how to access small business loans.
I got a call from the IRS asking for my bank account number to deposit my check – is this legit?
NO! The government will never call you to ask for your social security number of bank account information. These are SCAMS – do not give out personally identifiable information on the phone. The Federal Trade Commission has posted information about the most recent coronavirus scams.
Can real estate brokerages access the small business loans?
Yes. Real estate brokerages that employ 500 or fewer people are eligible for SBA loans. Sole proprietors, independent contractors and the self-employed also qualify..
For more information on small business loans, see our separate SBA FAQ.
I took out a small business loan this summer. Can I get another one?
Maybe! Congress has since appropriated more funds to restart both programs to meet demand The December 21 COVID-19 relief bill and omnibus spending package appropriated $284.45 billion for PPP and $20 billion for EIDL advance grants, extending both programs through the end of September 2021. Certain small businesses are eligible for a second-draw PPP loan of up to $2 million. The requirements to get a second PPP loan are:
- 300 or fewer employees;
- A reduction in gross receipts of at least 25% in a quarter of 2020 compared to the same quarter in 2019; and
- The business will not receive more than $10 million in PPP loans within 90 days.
I am a landlord and my tenants have not been paying rent. But I can’t evict them due to the federal moratorium. What can I do?
The December 21 COVID Relief bill includes a provision for $25 billion in rental assistance. The Treasury Department will implement the program through the states. Landlords will be permitted to apply on behalf of their tenant for rent (including back-due rent), utilities and other fees. More information to be coming soon. The law requires Treasury to distribute funds within 30 days. The federal eviction moratorium has been extended through January 31, 2021.
In addition, a number of states are providing rental assistance programs under earlier COVID-relief funding. A list of these can be found here.
The commercial real estate sector includes industries that are particularly vulnerable to the economic threat this poses - restaurants, retail, and offices that will be forced to close for the duration of the crisis and may be unable to reopen. What is NAR doing to address this?
The CARES Act includes provisions to allow businesses to offset tax losses. The bill allows businesses to carry back net operating losses from 2018, 2019 or 2020 against profitable years, up to five years, and get immediate refunds. The current taxable income limitation is also temporarily removed to allow an NOL to fully offset income.
In my area, appraisers have stopped appraising; Now what?
- We have been working with the federal agencies (HUD, FHFA, Freddie Mac, Fannie Mae) about appraisal issues during the crisis.
- FHFA has directed Fannie Mae and Freddie Mac to utilize appraisal alternatives to reduce the need for appraisers to conduct interior property inspections for eligible mortgages through January 31, 2020.
- Fannie Mae and Freddie Mac have provided detailed appraisal alternative guidance, including directions on using desktop appraisals and exterior-inspection only appraisals with specific language that appraisers are to use in their reports.
- FHA stopped desktop only appraisal alternatives for purchase transactions related to concerns with COVID 19 after October 31, 2020. The exterior-only option will continue to be available until December 31, 2020. The Rural Housing Service of the USDA stopped allowing exterior-only appraisals on November 30, 2020. The VA is allowing exterior-only appraisals with enhanced assignment conditions or in limited instances, a desktop appraisal until April 1, 2021, but can rescind the guidance earlier then that date.
- In addition, the OCC, Federal Reserve, and FDIC are allowing appraisals and evaluation to be delayed for 120 days post-closing in commercial and residential transactions that close before December 31, 2020.
If the appraiser is unable to enter the property, how are they getting reliable information to create a value opinion?
Fannie Mae and Freddie Mac have told appraisers they may rely on MLS data. NAR worked with both entities to ensure the language allowing reliance on the MLS was clear and sound.
As an employer, is there any assistance available to help me retain my employees?
The CARES Act created two new programs to help employers keep employees on salary: the "Paycheck Protection Program" (PPP) and the Economic Injury Disaster Loan (EIDL) advance grant. However, another round of funding was just approved in the December COVID-19 relief package.
Does my business interruption insurance cover pandemics?
It depends on the specific terms and conditions of your insurance policy. While typical property insurance coverage forms require actual physical damage to property (buildings, equipment, etc.), some policies may have expanded coverage to include non-physical types of losses. Others might include provisions or endorsements specifically related to epidemics. If you have questions about what is covered or not in your policy, please call your insurance agent. Your state insurance commissioner may also be able to help answer questions.
How can the private sector help fight the coronavirus?
FEMA is offering ways for the private sector to donate, volunteer or sell goods/supplies in the fight against the coronavirus pandemic. If you have medical supplies or equipment to donate, you can provide the details of what you are offering through an online form. If you are interested in doing business with FEMA and supporting the response to COVID-19 with your company’s non-medical goods and/or services, please email any inquiries to the Department of Homeland Security PAIR team at DHSIndustryLiaison@hq.dhs.gov. More information visit FEMA's Coronavirus Help page.
Are real estate services considered “essential” if their states or localities are under a "Stay at home" order?
The Federal Cybersecurity and Infrastructure Security Agency (CISA) provides a “List of Essential Critical Infrastructure Workers” as a guide to states and cities to use when they release emergency orders about “essential” and “non-essential” workers in efforts to prevent the spread of COVID-19. This was updated last spring to include “residential and commercial real estate and settlement services.” While Governors still have the flexibility to determine “essential businesses” in their respective states, it helps to have the federal government recognize the importance of the real estate industry to our economy. State REALTOR® associations can use the CISA list to advocate that real estate brokers and agents be given the ability to continue to work while following safety precautions to prevent the spread of the illness.
Since State Executive Orders may be amended over time, NAR recommends checking with your state association on the current status of essential services designation in your state. Similarly, local governments may be able to impose additional restrictions, particularly in states without statewide orders, so it is also recommended that REALTORS® operating during COVID-19, touch base with their local association regularly to learn more about any potential county, city, town or village restrictions.
Please make sure you also visit our FAQ on mortage/lending issues at www.nar.realtor/coronavirusfinances.
Does the HUD/FHFA moratorium on foreclosures cover everyone in the country?
No, the HUD/FHFA moratorium only affects borrowers with mortgages backed by Fannie Mae, Freddie Mac, FHA, VA and RHS. This does not apply to the roughly 35% of mortgages held in bank portfolios and private label securities, but some lenders are offering relief.
I have heard that the FHA, Fannie Mae, and Freddie Mac have raised rates and fees on borrowers with lower credit scores or smaller down payments?
FHA, Fannie Mae and Freddie Mac have not made any changes to credit scoring or down payment requirements. The only change they have made for borrowers is to allow MORE flexibility in how a lender can verify employment.
Many individual lenders are adding their own, higher standards on these products. The rational is that the cost of servicing these loans has surged due to the widespread forbearance that is taxing servicers’ resources. Under forbearance, the servicer must continue to pay PITI to the investor, but the sheer volume of forbearance to deal with the COVID-19 response is unprecedented. Since lower-credit borrowers are more likely to take forbearance and servicing is harder to get, lenders are less willing to extend this credit regardless of the FHA or GSEs’ standards.
I’m going to have a hard time making my student loan payments, as my job was put on hiatus during the crisis; What do I do?
The Administration has provided forbearance on federal student loans through the end of the year. It also prohibits negative credit reporting or involuntary debt collection during forbearance period. The Department of Education has also waived all interest on student loans for this period. You must contact your loan servicer to being a forbearance.
I’m worried about my credit score. What should I do if a miss a few payments due to the crisis?
The CARES Act implemented provisions to protect credit scores from January 30, 2020 through 120 says after enactment of the national emergency. If customers are making payments, or made arrangement to not make payments, customers must be reported as being current. If a customer was delinquent, but was able to make an arrangement with the servicer and is now current, must be reported as current. The important thing is to reach out to your servicer, bank or credit card company if you are having trouble making your payments.
Commercial Property Questions
I can't evict my tenant in my single-family rental property. How do I pay my mortgage?
Your mortgage may be covered by the moratorium on foreclosure, which applies to all federal mortgage (FHA, Freddie Mac, Fannie Mae), but hopefully it won’t get to that. You may also be eligible for mortgage forbearance. That means that your payments are frozen while under the forbearance period. You must contact your servicer to request forbearance, though. There are no fees and after the forbearance period you can request a modification to have the missed payments extended onto your payment term. NAR has worked with a coalition of organizations to lobby for security in all of the real estate waterfall. We are trying to ensure that when evictions are stopped for tenants, relief is provided for property owners.
The December COVID-relief bill included $25 billion in rental assistance. States will allow landlords to apply for rental assistance on behalf of tenants, including back rent, utilities and fees. More information coming soon.
What relief is provided for renters?
Effective September 4, 2020, the Centers for Disease Control and Prevention (CDC) ordered a nationwide eviction moratorium through December 31, 2020. This has now been extended through January 31, 2021. This applies to all rental units. For a renter to be eligible for relief, they must self-certify under penalty of perjury that they meet the following criteria:
- Have used best efforts to obtain all available government assistance for rent or housing;
- Expect to earn no more than $99k (individual) or $198k (joint) in 2020; OR was not required to report income in 2019; OR received an Economic Impact Payment from the CARES Act;
- Are unable to pay the full rent or housing payment due to substantial loss of household income, loss of hours, lay-off, or extraordinary medical expenses;
- Are using best efforts to make timely partial payments; AND
- Eviction would likely renter them homeless or force to move into close quarters in congregate or shared living settings due to no other housing options.
NAR has published a summary of the order issued by the CDC. Following the pre-release of the order, NAR issued a statement, that the order would "bring chaos to our nation’s critical rental housing sector and put countless property owners out of business.” In addition, NAR joined with our industry partners to urge Congress to pass immediate rental assistance.
So my renters do not have to pay their rent?
The eviction moratorium does not relieve renters from the responsibility to pay rent. The lease remains in place. That said, tenants can not be evicted for failure to pay. However, property owners may charge late fees, penalties and interest on late payments per the terms of their lease. They will be responsible for all rent payments at the end of the prohibition. NAR has prepared an FAQ for housing providers. The December COVID-relief package provided $25 billion in rental assistance – which will allow landlords to appy for rental payments on behalf of tenants. More information coming soon.
If an owner of a small number of rental properties suffers a reduction of income due to the coronavirus, does he or she meet the definition of having “adverse financial consequences” to allow them to take a “coronavirus-related distribution (CRD)” that qualifies for the tax-favored treatment?
The IRS issued Notice 2020-50 on June 19, 2020. While the notice does not include a definition of “adverse financial consequences” for purposes of a CRD, it does give examples of situations that would qualify as such adverse financial consequences. If, due to COVID-19, an individual’s
- Pay (or self-employment income) is reduced;
- Job offer is rescinded;
- Job start date is delayed;
- Spouse or other person who shares the individual’s principal residence (household member) is quarantined, furloughed, or laid off, has work hours reduced, is unable to work due to the lack of child care, has pay (or self-employment income) reduced, or has a job offer rescinded or job start date delayed; or
- Spouse’s or household member’s business is closed or subject to reduced hours.
It is possible that the IRS would not recognize the ownership of a small number of rental properties as meeting the definition of owning business and instead view it as simply an investment. If this is the case, the IRS could decide that the loss of income from the rental units does not meet the definition of an adverse financial consequence for purposes of the provision. Retirement plan administrators may rely on an individual’s certification that the individual satisfies the conditions to be a qualified individual in determining whether a distribution is a coronavirus-related distribution. However, the individual is entitled to treat such distribution as a CRD only if they actually meet the eligibility requirements. Thus, a person who believes they do qualify may instruct their retirement plan to issue a distribution, but how it is taxed may ultimately be challenged by the IRS.
Is there any other tax relief I am eligible for?
Owners of commercial and multifamily rental real estate whose primary business is owning/managing that property may be eligible for a new provision in the CARES Act that allows businesses to carry back tax losses against earlier years when tax was paid. Specifically, the bill allows businesses to carry back net operating losses from 2018, 2019 or 2020 against profitable years, up to five years, and get immediate refunds. The current taxable income limitation is also temporarily removed to allow a net operating loss to fully offset income.
Are commercial and multifamily owners eligible for any other programs?
Property owners may also be eligible for some of the programs offered by the Small Business Administration. A rental housing provider that qualifies as a small business and operates in a state with a Presidential declaration of disaster is eligible for SBA-sponsored Economic Injury Disaster Loans (EIDLs) and possibly also the Payroll Protection program. For additional information, please visit our Coronavirus SBA CARES Act FAQs page.
NAR recognizes the impact mandated closures will have on businesses throughout the country, and how that will impact the commercial real estate market, as well as the landlords and property managers who work with those businesses. NAR is working with a coalition of other industry groups, including the International Council of Shopping Centers, the Real Estate Roundtable, the National Association of REITS, the National Restaurant Association and the National Apartment Association to advocate for a "Federal Business Interruption and Workers' Protection Recovery Fund." Funded by the federal government, it would create a pathway for businesses impacted by the crisis to get assistance and liquidity - regardless of if it was already covered by a business interruption insurance policy or not. NAR will continue to advocate for this and other holistic solutions to the crisis in relief measures considered by the federal government.
Independent Contractor and Paid Leave
Is there a resource for overall benefits for small businesses?
Are independent contractors entitled to paid leave?
Self-employed individuals may be eligible for paid leave administered through refundable tax credits if they meet the qualifications under the FFCRA’s Emergency Paid Sick Leave Act if they were: subject to a quarantine or isolation order; has been advised to self-quarantine; is experiencing symptoms; or, must care for an individual who is subject to an isolation order or who is a quarantined employee; or is on leave to care for a son or daughter if the school or place of care for the child has been closed or the child care provider of the child is unavailable, due to COVID-19 precautions.
Eligible self-employed individuals are able to claim a refundable tax credit equal to 100% of the qualified sick leave equivalent amount for those who must self-isolate, obtain a diagnosis, or comply with a self-isolation recommendation with respect to COVID-19. Eligible self-employed individuals caring for a family member or for a child whose school or place of care has been closed due to COVID-19 receive a credit equal to 67% of a qualified sick leave equivalent amount.
Are business owners required to offer paid sick and family and medical leave to employees?
Under the FFCRA, businesses with fewer than 500 employees must offer paid sick leave and the new extended family and medical leave (FMLA expansion). For the new paid sick leave, full-time employees can receive up to 80 hours of sick leave, while part-time workers are eligible for leave based on their scheduled or normal work hours in a two-week period. The paid sick leave is calculated based on the employee’s regular compensation but is capped at $511 per day for employees subject to a quarantine or isolation order; has been advised to self-quarantine; is experiencing symptoms; and at $200 per day if needing to care for an individual who is subject to an isolation order or who is a quarantined employee; or needing to care for a son or daughter if the school or place of care for the child has been closed or the child care provider of the child is unavailable, due to COVID-19 precautions. If an employer already offers paid sick leave, this emergency paid sick leave must be offered in addition to that. Employers with fewer than 500 employees must also offer an additional 10 weeks of paid expanded family and medical leave at two-thirds the employee’s regular rate of pay where an employee is unable to work due to a bona fide need for leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19.
Is there an exemption for small business owners required to offer paid leave to employees?
An employer with fewer than 50 employees is exempt from providing (a) paid sick leave due to school or place of care closures or child care provider unavailability for COVID-19 related reasons and (b) expanded family and medical leave due to school or place of care closures or child care provider unavailability for COVID-19 related reasons when doing so would jeopardize the viability of the small business as a going concern. A small business may claim this exemption if an authorized officer of the business has determined that:
- The provision of leave would result in the small business’s expenses and financial obligations exceeding available business revenues and cause the small business to cease operating at a minimal capacity;
- The absence of the employee or employees requesting leave would entail a substantial risk to the financial health or operational capabilities of the small business because of their specialized skills, knowledge of the business, or responsibilities; or
- There are not sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the employee or employees requesting the leave, and these labor or services are needed for the small business to operate at a minimal capacity. (29 C.F.R. §826.40(b)(1).)
For reasons (1), (2), and (3), the employer may deny paid sick leave or expanded family and medical leave only to those otherwise eligible employees whose absence would cause the small employer’s expenses and financial obligations to exceed available business revenue, pose a substantial risk, or prevent the small employer from operating at minimum capacity, respectively.
There is no application process to apply for this exemption, rather it is up to the employer to determine and retain the necessary information on eligibility. DOL published a temporary rule stating that an employer deciding to deny paid sick leave or expanded family and medical leave to an employee must document the facts and circumstances that meet the criteria as outlined in the three conditions above. If an employer denies an employee’s request for leave pursuant to the small business exemption, the employer must document its authorized officer’s determination that the prerequisite criteria for that exemption are satisfied and retain such documentation for four years. (29 C.F.R.§826.40(a).) There is no specific formula used to determine the viability of a business as a going concern, rather an employer should consider conditions or events in the aggregate.
Regardless of whether a small employer chooses to exempt one or more employees, the employer is still required to post a notice in accordance with DOL guidelines found here (including a model notice). (29 C.F.R. §826.40(b)(3).) An employer may email or direct mail this notice to employees, or posting this notice on an employee information internal or external website.
Did Congress change health insurance laws to help those affected by the novel coronavirus?
Yes. Congress and the Administration recently responded with a number of public policy changes to help bolster health insurance plans and ease requirements for more individuals to obtain treatment and insurance. Check out NAR's Quick Reference Guide to a high-level overview of the recent changes, organized by source and type of coverage (Employer, Medicare, Affordable Care Act) including helpful links and resources on these benefits for NAR members.
I heard I can get free coverage for hospital visits related to Covid-19?
Hospitals may provide free COVID-19 treatment to uninsured individuals, and the Federal government will reimburse hospitals for the costs. Hospitals that accept the reimbursements are prohibited from sending you a medical bill for any amounts that exceed the treatment costs. Read the April 3rd White House Press Briefing for more information.
Tax Credits for Sick Time and Family Leave
Does a REALTOR® need to itemize their deductions in order to qualify for the credits?
The tax credits are available whether the tax filer itemizes deductions or not. If the REALTOR® is self-employed, the tax credit will reduce his or her income or self-employment taxes and also the quarterly estimated tax payments.
What if I have a limited liability company (LLC) or an S corporation?
If an owner of an LLC has employees, they will have Social Security and withholding tax liabilities for the employer’s share to pay over to the IRS. The tax credits can be used to reduce these payments, thus saving the employer cash within days or weeks. If the LLC has no employees, the answer is the same as in the question immediately above. For owners of S corporations who are also employees, the tax credits can be used to reduce tax payments due to the IRS, as with LLCs.
For a full explanation of the new law related to sick leave and tax credits, please visit Impact of H.R. 6201 "Families First Coronavirus Response Act" on NAR Members.
Can our Association file for an SBA loan?
Perhaps! The December COVID-relief package expands SBA eligibility to 501(c)(6)s. 501(c)(6) organizations can access PPP funds if they have 300 employees or fewer, do not receive more than 15% of their receipts from lobbying activities and lobbying activities do not comprise more than 15% of their activities, and the cost of the lobbying activities of the organization did not exceed $1,000,000 during the most recent tax year. In addition, PPP funds cannot be used for lobbying activities of any kind.
Are NAR REALTOR® Party grants still available?
Yes, all NAR’s grant programs are still operating. Leverage a Housing Opportunity, Smart Growth and/or Fair Housing grant to position your association as a leader in your community by hosting an online or virtual event addressing affordable housing challenges, community planning and development issues, revitalization opportunities, and fair housing education. If you need more information, application deadlines, and/or clarification about whether the event meets grant criteria, contact Wendy Penn at WPenn@nar.realtor for Housing Opportunity or Hugh Morris at HMorris@nar.realtor for Smart Growth and Fair Housing.
Associations may be able to apply REALTOR® Party Conference grant funds to their virtual meetings & events. To inquire and apply, please contact Vanessa Lopez at VLopez@nar.realtor.
REALTOR® Party Leaders available for virtual meetings and events: Beginning April 1, members of the 2020 REALTOR® Party Travel Team are available to “dial-in” and speak to your group if your association is hosting a virtual meeting or event. Offerings are quick, 5-10 minute issue overviews on topics such as Get Out The Vote, Voter Registration, Fair Housing activities, Community Outreach programs, and other REALTOR® Party programs and services. To schedule, please contact Vanessa Lopez at VLopez@nar.realtor.