On April 24, President Trump signed into law The Paycheck Protection Program (PPP) and Healthcare Enhancement Act (HR 266), allocating an additional $310 billion to the lending program administered by the Small Business Administration (SBA). The bill also provides an additional $60 billion to the SBA’s disaster loan program, replenishing the Economic Injury Disaster Loan (EIDL) with $50 billion and boosting the EIDL’s $10,000 grant mechanism with an additional $10 billion.
The PPP, which saw its original allocation of $349 billion exhausted after 13 days of activity, received some smart, realistic changes in HR 266 meant to encourage dedicated lending to traditionally small businesses unable to receive assistance during the first round of funding. Thirty billion dollars of the PPP’s allocation will be reserved for lenders with assets of less than $10 billion, while another $30 billion will be earmarked for lenders with assets between $10 billion and $50 billion. Dedicated funding to certain lenders will allow eligible small- to medium-sized borrowers gain preferential access to critical financial support.
Still, no adjustments were made to grant eligibility for multifamily housing firms that face challenges in applying for PPP funding:
- Passive business owners
- Owners who enter into contracts with third parties to manage properties
- Apartment buildings
- Businesses with more than 500 employees
The National Apartment Association (NAA) is encouraged by the work of Congress to ensure that America’s workforce and businesses stay afloat during these uncertain times. However, the unprecedented nature of the economic crisis brought on by COVID-19 requires that Congress reexamine the scope of the PPP to ensure accessibility for all business types.
Rental housing developers, owners and operators who remain on the front lines of the crisis and provide essential services to millions of renters are crippled by eligibility restrictions. NAA urges Congress and the SBA to address the unique needs of the rental housing industry by:
- Reversing the PPP Interim Final Rule to expand eligibility to all multifamily housing firms. Access to the PPP will ensure that owners and operators continue providing a high level of service and consistent care for the millions of Americans living in rental housing.
- Amending the CARES Act to include multifamily housing businesses in the provision granting eligibility for businesses with more than 500 employees operating across multiple physical locations. Our industry operates under similar business models as those industries already granted eligibility by this provision.
Congress has already demonstrated their willingness to accommodate the myriad small businesses types by waiving the SBA’s affiliation rules in the CARES Act and granting eligibility to certain businesses with more than 500 employees. Building on this momentum, NAA continues to work with Congress and the SBA to ensure that the unique needs of the multifamily housing industry are met as the viability of the apartment industry and the nation’s housing stock remains at risk. Learn more about NAA’s advocacy here.
To prepare for the application process to reopen, learn more about the PPP program, EIDLs and other funding sources available to the industry through the SBA on its website. Also, review NAA’s webinar to understand PPP implications for rental housing owners and operators.