COVID-19 ResourcesNELEA is with you on the front lines of the COVID-19 Pandemic to provide information and other resources updated daily on our website.
Small business lending
• Allocates $377 billion in funding for the Small Business Administration (SBA) Section 7(a) Loan Program. More generous eligibility and terms.
o Increases government guarantee of the 7(a) loan program to 100% through December 31, 2020 o Defines eligibility for loans as a small business with not more than 500 employees
o Includes sole-proprietors, independent contractors, and other self-employed individuals
o Establishes the maximum 7(a) loan amount to $10 million
o Specifies allowable uses of the loan include payroll support, such as employee salaries, paid sick or medical leave, insurance premiums, and mortgage, rent, and utility payments
o For eligibility purposes, requires lenders to determine whether a business was operational on February 15, 2020, and had employees for whom it paid salaries and payroll taxes
o Waives borrower and lender fees, collateral and personal guarantee requirements
o Stipulates that maximum interest rates for SBA 7(a) program loans is 4%
o Allows complete deferment of 7(a) loan payments for 6 to 12 months and allocates up to $17 billion in subsidies to cover principal, interest, and fees for a six-month period
o Borrower shall be eligible for loan forgiveness on payroll costs, mortgage interest payments
o Allocates $10 billion in funding for SBA’s Emergency Economic Injury Disaster Loans (EIDL)
Distressed industry support
• Provides $500 billion to Treasury’s Exchange Stabilization Fund (ESF) to provide loans, loan guarantees, and other investments, distributed as follows…
o $25 billion for passenger air carriers
o $4 billion for cargo air carriers
o $17 billion for businesses important to maintaining national security
o Alternative financing is not reasonably available to the business
o The loan is sufficiently secured, not less than market interest rate pre-outbreak
o The duration of the loan must be as short as possible and cannot exceed 5 years
o No stock buybacks, or dividends through the duration of the loan plus one year
o Borrowers must, until September 30, 2020, maintain its employment levels as of March 24, 2020, to the extent practicable, and retain no less than 90% of its employees as of that date
o Borrowers certify that it is U.S.-domiciled business, employees are predominantly in the U.S.
o The loan cannot be forgiven
o Treasury must receive warrants or equity interests in eligible businesses or senior debt instruments
Treasury-based direct lending must meet the following criteria…
• Provides $454 billion for direct lending, loan guarantees, and investments in support of the Federal Reserve’s 13(3) lending facilities to eligible businesses, states, and municipalities
o Any lending through a 13(3) facility established by the Federal Reserve must be broad-based, with verification participants are solvent and unable to obtain adequate financing elsewhere
o No stock buybacks, or dividends through the duration of the loan plus one year
o Prohibits recipients of any direct lending or Federal Reserve facility recipients from increasing the compensation of any officer or employee whose total compensation exceeds $425,000
o Treasury is tasked with implementing a special 13(3) facility through the Federal Reserve targeted specifically at nonprofit organizations and businesses between 500 and 10,000 employees
o The funds received must be used to retain at least 90% of the recipient’s workforce, with full compensation and benefits, through September 30, 2020
o Recipient will not outsource/offshore jobs for the term of the loan plus an additional two years
o Recipient will not abrogate existing collective bargaining agreements for the term of the loan plus an additional two years
o The recipient must remain neutral in any union organizing effort for the term of the loan
- Authorizes the FDIC to temporarily establish a debt guarantee program to guarantee debt of solvent insured depositories and depository institution holding companies
- Establishes the Office of the Special Inspector General for Pandemic Recovery to audit and investigate loans, loan guarantees, and other investments made by the Treasury Secretary
- Prohibits any company in which the President, Vice President, an executive department head, Member of Congress or family member to own over 20% of stock from being eligible
- Establishes a Congressional Oversight Commission charged with oversight these programs
- Provides grant for employee wages and benefits in the amounts of up to $25 billion for passenger air carriers, up to $4 billion for cargo air carriers, and up to $3 billion for airline contractors
- Provides for Secretary of Treasury to receive warrants, options, stock and other financial instruments to provide appropriate compensation for the government for the assistance
- Temporarily repeals federal excise taxes collected in relation to commercial aviation, specifically those applied to the transportation of persons, the transportation of property, and aviation fuel
- Provides a refundable payroll tax credit for 50% of wages paid by employers to employees during the COVID-19 crisis (up to first $10,000 of compensation per employee)
- Allows employers, self-employed to defer payment of the employer share of the Social Security tax
- Relaxes the limitations on a company’s use of net operating losses (NOL) arising in a tax year beginning in 2018, 2019, 2020
- Temporarily increases the amount of interest expense businesses allowed to deduct by increasing the 30% limitation to 50% of taxable income (with adjustments) for 2019 and 2020
- Enables businesses to write off immediately costs associated with improving facilities instead of having to depreciate those improvements over the 39-year life of the building Individuals
- Unemployment insurance
o Creates a temporary Pandemic Unemployment Assistance program through December 31, 2020 for those not traditionally eligible for unemployment benefits (self-employed, independent contractors, others) who are unable to work as result of coronavirus public health emergency
o Provides an additional $600 per week payment to each recipient of unemployment insurance or Pandemic Unemployment Assistance for up to four month
o Provides an additional 13 weeks of unemployment benefits through December 31, 2020
o Provides funding to support “short-time compensation” programs (employers reduce employee hours instead of laying off workers, employees receive a pro-rated unemployment benefit)
- All U.S. residents with adjusted gross income up to $75,000 ($150,000 married) are eligible for the full $1,200 ($2,400 married) rebate plus an additional $500 per child
- Special Rules Related to Retirement Funds
o Waives the 10% early withdrawal penalty for distributions up to $100,000 from qualified retirement accounts for coronavirus-related purposes made on or after January 1, 2020
o Waives the minimum distribution rules for defined contribution plans and IRAs for 2020
- Removes various regulatory barriers to the use of telemedicine
- Temporarily lifts the Medicare sequester, which reduces payments to providers by 2%, from May 1 through December 31, 2020
- Increases the payment that would otherwise be made to a hospital for treating a patient admitted with COVID-19 by 20%
- Extends funding for various health plans through November 30, 2020, including delay of disproportionate share hospital (DSH) reductions, community health centers (CHCs)
- Government spending… hospitals/providers – $100 billion, healthcare preparedness – $32 billion Financials/mortgages
- Requires the federal banking agencies by interim final rule to temporarily reduce the Community Bank Leverage Ratio for qualifying community banks from 9% to 8%
- A financial institution may elect to suspend any determination under U.S. GAAP of a loan modified as a result of the effects of the coronavirus as being a troubled debt restructuring
- An insured depository institution (including credit unions), bank holding company, or any affiliates has the option to temporarily delay implementation of CECL methodology
- Prohibits foreclosures on all federally-backed mortgage loans for a 60-day period beginning on March 18, 2020 and permits borrowers to request forbearance for up to 180 days
- Permits borrowers with a federally-backed multifamily mortgage loan who have experienced a financial hardship due to the coronavirus to request forbearance
- Prohibits landlords from initiating legal action to recover possession of a rental unit or to penalties for 120 days for properties with federally insured/guaranteed mortgages
- Requires deferment of student loan payments, principal, and interest for 6 months, through September 30, 2020, without penalty to the borrower for all federally owned loans
- Limits employer costs for paid leave to no more than $200/day, $10,000 in aggregate per employee
- Limits employer costs for sick leave to no more than $511/day, $5,110 in the aggregate or more than $200/day, $2,000 in the aggregate to care for a quarantined individual or child for each employee)
- Allows an employee who was laid off by an employer March 1, 2020, or later to have access to paid family and medical leave in certain instances if they are rehired by the employer
- Allows employers to receive an advance tax credit from Treasury instead of having to be reimbursed on the back end
Other government spending
• Increase government spending on programs in following areas… o Health care (see prior section)… $132 billion
o States/localities – $150 billion
o Education – $31 billion
o Transit – $25 billion
o Food and nutrition service – $25 billion
USDA Implements Immediate Measures to Help Rural Residents, Businesses and Communities Affected by COVID-19
WASHINGTON, March 25, 2020 – USDA Rural Development has taken a number of immediate actions to help rural residents, businesses and communities affected by the COVID-19 outbreak. Rural Development will keep our customers, partners, and stakeholders continuously updated as more actions are taken to better serve rural America.
Rural Housing Service
OPPORTUNITIES FOR IMMEDIATE RELIEF
Effective March 19, borrowers with USDA single-family housing Direct and Guaranteed loans are subject to a moratorium on foreclosure and eviction for a period of 60 days. This action applies to the initiation of foreclosures and evictions and to the completion of foreclosures and evictions in process.
Guaranteed Loan Program:
- Guaranteed Loan borrowers who are in default or facing imminent default due to a documented hardship can have payments reduced or suspended by their lender for a period not to exceed 12 months delinquency. Once the hardship is resolved, the lender can modify the loan to cure the delinquency or make up the missed payments based on the borrower’s individual circumstances.
- Guaranteed Loan servicing questions should be directed to: firstname.lastname@example.org.Direct Loan Program:
- USDA has waived or relaxed certain parts of the application process for Single-Family Housing Direct Loans, including site assessments, and has extended the time period that certificates of eligibility are valid.
- A Direct Loan borrower who is experiencing a reduction of income by more than 10 percent can request a Payment Assistance package to see if he/she is eligible for payment assistance or for more assistance than currently received.
- Moratorium Assistance is available for Direct Loan borrowers experiencing medical bill expenses (not covered by insurance) or job loss because of COVID-19. Qualifying borrowers can receive a moratorium on house payments for a period of time, repaid at a later date.
- Direct Loan questions should be directed to USDA’s Customer Service Center at 800-414-1226 (7:00 a.m.-5:00 p.m. Eastern Time Monday-Friday) or https://www.rd.usda.gov/contact-us/loan-servicing. Call volume and wait times are high at this time.Multi-Family Housing
Multi-Family Housing is taking several steps to help owners, management agents and tenants maintain quality housing during the COVID-19 outbreak. Specifically, three immediate steps are effective for Section 515 Multi- Family properties:
• Tenant certifications due March 31, April 30 and May 31 for Multi-Family properties have been extended to June 30 with no late fees or overage charges, as allowed in Multi-Family guidance (HB-3- 3560, Chapter 4, Section 4.11). This extension will allow for additional time to complete needed certifications while avoiding face-to-face meetings as recommended by the Centers for Disease Control and Prevention (CDC).
- Late fees on Section 515 mortgages will be waived, subject to waiver authority in 7 CFR 3560.403 (c)(3).
- Section 515 Annual Financial Statements due March 31 will be extended 30 days, as per Multi-Family guidance (HB-2-3560 Chapter 4, Section 4.16-H). USDA is exploring whether a longer extension is appropriate and will provide further guidance.
- Current policy states that owners must process an interim recertification at the tenant’s request if there is a change in income of $50 or more per month. The owner should already have this policy in writing and apply it consistently. To the maximum extent possible, we encourage all owners to work with all tenants with impacted income to adjust rent payments.
- USDA encourages all owners to work with impacted residents and families to adjust rent payments, enter into forbearance agreements, and lessen the impact on affected residents. At this time, no additional subsidy funding has been made available. If borrowers are temporarily unable to make loan payments, the Agency may waive late fees and enter into an official workout plan.Rural Utilities Service
- On March 20, 2020, USDA extended for 60 days the deadline for Telecommunications and Electric Program borrowers and grantees to submit their annual CPA audit. In most cases, such audits are due to the agency by April 30, 2020.
- USDA is waiving borrower covenant requirements for loan agreement financial ratios for the period from Jan. 1, 2020, through Dec. 31, 2020. Additionally, USDA is waiving all financial reporting requirements associated with existing Rural Utilities Service (RUS) loan and grant covenants beginning Jan. 1, 2020 through June 30, 2020.
- The RUS Administrator has delegated authority to the RUS Telecommunications, Electric, and Water and Environmental Programs to consider requests to waive certain site inspection requirements during the current COVID-19 National Emergency.
- Applicants will be able to use alternative methods to notify the public, such as through videoconferences, teleconferences and public notices on websites and in local newspapers, as a substitute for the public meeting notification requirement for water and waste projects.
- On a case-by-case basis, USDA will help Electric Program borrowers gain access to obligated funds more quickly at current low interest rates by considering extensions of loan terms (within statutory limits); considering requests to move obligated funds between the Electric Program’s six budget purposes where the new purpose has cleared environmental review; and by considering Temporary Normal Inventory (TNI) requests.
- For assistance, please contact:
Electric Program: Christopher McLean, Christopher.email@example.com, 202-407-2986
Telecommunications Program: Laurel Leverrier, firstname.lastname@example.org, 202-495-9142
Water and Environmental Programs: Edna Primrose, email@example.com, 202-494-5610Rural Business-Cooperative Service
• Beginning immediately, through July 31, 2020, USDA Business and Industry Loan Guarantees (B&I) and Rural Energy for America Program (REAP) Guaranteed lenders may assist borrowers experiencing temporary cash flow issues by deferring payments for a period no longer than 120 days. The lender must notify The Agency in writing of any payment deferments. Written notification to the Agency will meet the standard for concurrence until July 31, 2020. A response from the Agency is not required. This guidance applies to ALL borrowers that had a current repayment status as of March 1, 2020.
If the guaranteed loan has been sold on the secondary market, the secondary market holder and lender must agree to the deferment actions being taken. The Agency will expect a written agreement from both parties in these instances.
- RBCS intermediary borrowers continue to have authority to service loan portfolios independent of USDA. Intermediary borrowers participating in these programs may approve loan payment deferrals may to their borrowers without USDA approval. These programs are: Intermediary Relending Program (IRP)
Rural Business Development Grant (RBDG)
Rural Economic Development Loan and Grant (REDL and REDG) Rural Microentrepreneur Assistance Program (RMAP)
- For existing Intermediary Relending Program (IRP) and Rural Economic Development Loan (REDL) borrowers, the Agency is committed to maintaining well-capitalized intermediary lenders and will work with you on loan servicing requests on a case-by-case basis to make sure you remain a pillar in our rural business communities.EXTENSION OF APPLICATION DEADLINES
USDA is extending the application window for the following programs:
Rural Business-Cooperative Service
- USDA extended the application deadline for the Rural Business Development Grant (RBDG) program to no later than April 15, 2020. Contact the Rural Development office for the deadline in your state. USDA announced the extension in an Unnumbered Letter posted March 19, 2020.
- USDA extended the application deadline for the Rural Energy for America Program (REAP) to April 15, 2020. For additional information, see page 16925 of the March 25, 2020, Federal Register.#
USDA is an equal opportunity provider, employer and lender.
As of today, there are 837 reported cases in the state.
Stay at Home. Governor Edwards issued a Stay at Home Order to further combat the spread of COVID-19 in Louisiana. The order directs all Louisiana residents to shelter at home and limit movements outside of their homes beyond essential needs. A copy of the order, a list of Frequently Asked Questions, and an Essential Employee Information Sheet are attached to this email. Further information is available here.
Re-Entry NOT Required. Governor Edwards stressed during his press conference today that commerce will continue to flow and needs to continue to flow into Louisiana during this epidemic. Parish boundaries and state borders will not be closed and re-entry permitting will not be required.
PPE Donations. Companies, private organizations and individuals that may have personal protective equipment (N95 masks, face shields, FDA-approved gowns, etc) are asked to donate to assist our medical community as we face a nationwide shortage.
Be safe, stay home if you can, and thank you.
CDFA Publishes COVID-19 Resource Center, Will Host Weekly Briefings
CDFA developed the COVID-19 Resource Center to serve as a central hub of everything the development finance world is doing to mitigate the impacts of COVID-19. Tune in to CDFA’s Weekly Development Finance COVID-19 Briefing to stay at the forefront of the development finance community’s mitigation and recovery efforts.
A local developer plans to turn a dilapidated historic hotel into one that features a pre-function space, luxury spa, pool, business and exercise centers and commercial space on the first floor. Both the hotel’s heating and cooling will be powered by geothermal energy. The Iowa EDA awarded the project more than $11.3 million in historic preservation tax credits; and the Sioux City Council agreed to guarantee $16.5 million for it.
Renewable energy and other trade bodies in the US are calling on Capitol Hill to extend provision of tax incentives to help the sector “surmount the impacts” of the COVID-19 pandemic. The current uncertainty about the ability to qualify for and monetize tax incentives will have real and substantial negative impacts to the entire economy.
Following President Donald J. Trump’s emergency declaration pursuant to the Stafford Act, the U.S. Treasury Department and IRS issued guidance allowing all individual and other non-corporate tax filers to defer up to $1 million of federal income tax (including self-employment tax) payments due on April 15, 2020, until July 15, 2020, without penalties or interest.
The new agreement, approved on a unanimous vote by the Missouri Development Finance Board, calls for tax credits worth $5.7 million to help fuel construction of a $457.8 million soccer complex on the western edge of downtown.
New Markets Tax Credits will be used to finance a discount supermarket and thrift store with a strong mission in Lancaster, PA. Part of the store’s social mission is offering affordable merchandise and fresh food to parts of the city that has limited access to these items.
New York City-based Hugo Neu Group has secured a total of $14.5 million in New Market Tax Credit loans from Capital One for its the Annex project at Kearny Point. The NMTC loans included a $4-million allocation from the Capital One Community Renewal Fund and a $10.5-million allocation from New Jersey Community Capital.
Developers Karl Frizlen and Michael Masters are ready to start work on their proposed renovation of the Barcalo Manufacturing Plant, after they won $1 million in sales and mortgage recording tax breaks from the Erie County Industrial Development Agency to help finance the $34.7 million project.
If infrastructure spending legislation passed this year, such a bill would be an excellent vehicle to expand funding–including tax incentives–for affordable housing, community development and historic preservation. If the parties can find common ground on infrastructure legislation, many existing proposals involving the low-income housing tax credit (LIHTC), new markets tax credit (NMTC) and historic tax credit (HTC) could be enacted this year. Such legislation could also include a new funding tool: infrastructure tax credits.
Weekly Development Finance COVID-19 Briefing
Every Friday, March 27 – May 29, 2020 – 1:00 PM Eastern
CDFA will be hosting a weekly briefing about development finance COVID-19 news and resources. These one-hour phone calls will feature legislative updates, news from our members, state and local financing strategies, and lessons learned from previous development finance responses to disasters.
CDFA // BNY Mellon Development Finance Webcast Series: The Performance of Social Impact Bonds
Tuesday, April 21, 2020 – 1:00 PM Eastern
During this installment of the CDFA // BNY Mellon Development Finance Webcast Series, we will explore if the performance of Social Impact Bonds (SIBs) is living up to the hype and how SIBs can be used as a powerful tool for community development.
Intro Tax Increment Finance WebCourse
May 20-21, 2020 – Daily: 12-5pm (Eastern)
This course brings TIF deal-making and best practices into focus through a two-day program targeting the entire TIF community including economic developers, public agency representatives, bond issuers, legal professionals, developers, financial advisors, and other stakeholders.
Solar Developers Launch Lobbying Effort to Curb COVID-19 Impacts, Advance Remote Permitting
Utility Dive | Mar. 23 |
Community Service Tax Credit Applications Open in KS
New York State Agrees: The Barcalo Should Get Historic Tax Credits
Gov. Mills Approves Tax Credit for Biofuel Makers
COVID-19 Declaration May Allow Flexibility for LIHTC, Bond Developments
Deserve Plans Salt Lake Valley, UT, Operations Center
Gig Economy Workers Hurt By Coronavirus Eye New Federal Funds For Relief
IL Gives Green Light for Third Party Solar Projects
For Wind and Solar Sectors, Biggest Coronavirus Risk May Be a Damaged Economy
Coronavirus Creates Angst For Clean Energy Developers
IRS Publishes Population Figures to Determine PAB and LIHTC Caps for 2020
WI Gov. Evers Signs Bill Increasing Opportunity Zone Benefits, Others Related to Construction
RI Gov. Raimondo Announces 5 New Real Estate Development Projects Using 2 State Programs
Standard Communities Leverages LIHTCs, OZ Funds, Partnerships, $200M Debt for Affordable Senior Apartments
TN Governor’s Bills, Business Tax, Highlight House Calendar
|New Additions to the Online Resource Database|
Internal Revenue Bulletin: 2020-10
Bond Finance | Housing Finance | Tax Credits
IRS Notice 2020-10 provides population figures to calculate calendar-year 2020 limits for private activity bonds (PABs) and low-income housing tax credit (LIHTC) for all 50 states, Washington, D.C., and Puerto Rico. The PAB cap is the greater of the population multiplied by $105 or $321,775,000. The LIHTC cap for each state is the greater of the population multiplied by $2.8125 or $3,217,500.
The Roadmap to Redevelopment Report was developed through a 2-day process that included interviews with numerous stakeholders from the government, agriculture, business, and non-profit sectors. The plan provides a framework for the financing of the redevelopment of the Anoka-Ramsey landfill in Ramsey, MN.
|The Council of Development Finance Agencies (CDFA) is a national association dedicated to the advancement of development finance concerns and interests. CDFA is comprised of the nation’s leading and most knowledgeable members of the development finance community representing public, private and non-profit entities alike. For more information, visit www.CDFA.net or email firstname.lastname@example.org|
Council of Development Finance Agencies
100 E. Broad Street, Suite 1200
Columbus, OH 43215