What you need to know about the HEROES Act
On May 15, the U.S. House of Representatives passed H.R. 6800, the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act by a party line vote. Viewed by many as a strictly partisan exercise — the bill was drafted without any input from House Republicans — this omnibus legislation includes countless policy proposals that would have wide ranging impacts on American households and businesses and allocates nearly $3 trillion in additional aid to alleviate the effects of the ongoing COVID-19 pandemic.
Of utmost concern to the apartment industry, the bill would:
- Establish a $100 billion emergency rental assistance program delivered through the U.S. Department of Housing and Urban Development (HUD) Emergency Solutions Grants program with income target limitations and waiver authority by the HUD Secretary.
- Expand the availability of mortgage forbearance to all multifamily borrowers for 12 months; provide an additional 12 months at the end of forbearance to bring the loan current; and align the covered period for required renter protections with the CARES Act eviction moratorium.
- Dramatically extend the CARES Act’s eviction moratorium to apply to virtually all single family and multifamily rental housing and suspend the collection of fees and halt eviction cases due to nonpayment of rent for 12 months from the date of enactment. Additionally, this section would restrict rental housing providers from issuing “notices to vacate” due to nonpayment until after the moratorium ends and prevent providers from requiring a resident to vacate the premises until 30 days after the notice is served.
- Enable the Board of Governors of the Federal Reserve to establish a credit facility that makes loans available to residential rental property owners to temporarily compensate owners for rent shortfalls in exchange for mandated renter protections, including suspension of evictions, source of income restrictions and unnecessary reporting requirements.
- Prohibit furnishers of information (including rental housing providers that submit information about their residents) from reporting adverse information to credit reporting agencies (CRAs). The restriction applies to consumer (resident) information that was the result of any activity that occurred during a covered period, and this section contains a limited exclusion only for information related to felony criminal convictions.
- Prevent CRAs from including adverse information in consumer reports. If a consumer (resident) reports economic hardship, the CRA would be required to delete related adverse information that occurred during a covered period or in the 270-day period following the end of a covered period.
- Prohibit the collection of consumer debt during a national disaster or emergency.
- Extend the forgiveness period of the Paycheck Protection Program (PPP) loan from 8 weeks to 24 weeks. The proposal also makes eligible all 501(c) nonprofit organizations, such as apartment associations, and provides a 25 percent funding set aside for these entities. However, the HEROES Act does not expand PPP eligibility for multifamily firms previously excluded under the CARES Act and SBA guidance.
- Other elements applicable to the industry include direct financial assistance to individuals and families (which could cover rental obligations), additional funding for HUD housing programs and critical tax provisions.
The 1,800-page bill reflects the Democrat-controlled House’s wish list of broad policy priorities beyond COVID-19. Given its broad scope and price tag, it faces an uphill battle as it moves to the Republican-led Senate for consideration. Senate Republican leaders have already declared the package “dead-on-arrival.” Robust discussion and negotiations will take place over the next several weeks and the National Apartment Association (NAA), alongside our members, will be a part of those conversations.
NAA and the National Multifamily Housing Council (NMHC) continue to work with members of both chambers to ensure policymakers understand both the severe impacts to the apartment industry and its residents from what is being proposed and what is needed to maintain stability in the rental housing system. Rental housing operators urgently need relief in the next federal package as they provide housing and essential services to 40 million Americans, many of whom continue to shelter in place at home. Federal policymakers must ensure that providers can effectively manage their communities and remain solvent despite financial strains. As the crisis continues and renters’ savings are depleted, ongoing challenges will interfere with renters’ ability to pay their rent, which could have cascading effects not only on the rental housing system, but state and local governments and the broader economy.
Be assured that you will be a part of this advocacy effort and be watchful for messages from NAA asking you to reach out to Congress to make our case. Without your participation, our efforts will not succeed and we need everyone to do their part. To learn more about how to get involved, visit NAA’s phase 4 page.