Knox Resource Center CARES Act FAQ

Does the new government stimulus package help me as a renter or homeowner?

On Friday, March 27, Congress approved a $2 trillion stimulus package designed to help Americans.

Most provisions start on April 1.

Included in the stimulus are some programs for renters and homeowners.

What is mortgage forbearance?

According to the national association of realtors:

Mortgage Forbearance – Borrowers of government-backed mortgages (Fannie Mae, Freddie Mac, HUD, VA, and USDA) can request up to 360-day payment forbearance without proof of hardship. No additional fees, interest, or penalties can be assessed for the forbearance.

What protections does a renter have?

The law places a mandatory, nationwide four-month halt on evictions if your landlord has a mortgage-backed by a federal organization like Fannie Mae or Freddie Mac. Landlords also can’t charge fees for nonpayment of rent.

What protections does a homeowner have?

For homeowners, no foreclosures will be allowed during the 60-day period following March 18, 2020. All federally backed mortgage providers are required to give a forbearance of 180 days plus an extension of another 180 days without any extra fees beyond their normal interest accruing if a borrower requested due to the financial impact of COVID-19. (Borrowers of multi-family property loans, aka landlords, may take up to 90 days total.)

SBA loans for landlords as part of the stimulus package.

Please read this article for more information:

SBA loans for landlords part of stimulus package

Stimulus assistance for individuals

The CARES Act is a federal law that directs $2 trillion in funding to COVID-19 relief efforts.

Assistance for individuals includes:


Direct cash payments:

Most individuals earning less than $75,000 will receive $1,200. For married couples earning less than $150,000, each partner will receive a $1,200 check.

An additional $500 will be given for each child.

Direct cash payments will arrive within approximately three weeks via direct deposit if you have set up a direct deposit account with the IRS. The IRS will be communicating about payments via mail, so keep an eye on your mailbox.

Payments will decrease for those earning more than $75,000 and will phase out completely for individuals making more than $99,000 and for married couples making more than $198,000.

Individuals whose previous income makes them ineligible but who have recently lost their job are not currently eligible to receive the payment. These individuals should be eligible for the expanded unemployment benefits.

Any adult who is claimed as a dependent is ineligible to receive a payment. This is often the case for college students.

A valid Social Security number (SSN) is required to be eligible. If a spouse or a child uses an individual taxpayer identification number (ITIN) instead of a SSN, the entire family is ineligible for the payment. There is an exception for members of the military.

Payments are based on either your 2018 or 2019 tax filings. People who receive Social Security benefits but don’t file a tax return are still eligible.


Expansion of unemployment benefits:

$260 billion is directed to expand unemployment insurance programs.

New job seekers and workers who are able to continue working from home are not covered.

It also expands unemployment insurance to cover those who are self-employed, freelancers, and “gig economy” workers.

The CARES Act extends unemployment benefits for an additional 13 weeks, allowing individuals to receive benefits for up to 39 weeks in Massachusetts.

Federal benefits will increase $600 per week through July 2020. This is in addition to the Massachusetts weekly benefit maximum of $823. Massachusetts is waiting on guidelines for distributing these funds.


Health Coverage:

Private insurance plans are required to cover COVID-19 treatments and vaccination when it becomes available.

All COVID-19 tests are free.

Student Loan Relief & Work Study Expansion

All federal loan and interest payments are deferred through September 30, 2020, without penalty.

The package allows schools to convert work-study funds to grants and to continue to pay work-study wages while school is suspended. Check with your school to see if you are still eligible for work-study.

Stimulus assistance for small business

The CARES Act is a federal law that directs $2 trillion in funding to COVID-19 relief efforts.

Assistance for small businesses includes:


Paycheck Protection Program Loan:

This loan helps businesses maintain cash-flow and keep workers on payroll. If payroll is maintained, loans can be forgiven.

This program offers up to eight weeks of payroll forgiveness, no Small Business Administration (SBA) fees, and least six months of deferral with maximum deferrals of up to a year.

Businesses impacted by COVID-19 can apply for loans through June 30, 2020, and loans are retroactive to February 15, 2020, in order to help bring back workers that may have already been laid off.

Eligible businesses include for-profit businesses and 501(c)(3) organizations with 500 or fewer employees, as well as sole proprietorships.


Small Business Debt Relief Program:

This program will provide immediate relief to small businesses with non-disaster SBA loans, in particular 7(a), 504, and microloans.

Under it, SBA will cover all loan payments on these SBA loans, including principal, interest, and fees, for six months.

This relief will also be available to new borrowers who take out loans within six months of the President signing the bill into law.

Economic Injury Disaster Loans & Emergency Economic Injury Grants

These grants provide an emergency advance of up to $10,000 to small businesses and private non-profits harmed by COVID-19 within three days of applying for an SBA Economic Injury Disaster Loan (EIDL).

To access the advance, you first apply for an EIDL and then request the advance.

The advance does not need to be repaid under any circumstance and may be used to keep employees on payroll, to pay for sick leave, meet increased production costs due to supply chain disruptions, or pay business obligations, including debts, rent and mortgage payments.


Small Business Tax Provisions:

The Employee Retention Credit for Employers Subject to Closure or Experiencing Economic Hardship provides a refundable payroll tax credit for 50 percent of wages paid by eligible employers to certain employees during the COVID-19 crisis. The credit is available to employers, including non-profits, whose operations have been fully or partially suspended as a result of a government order limiting commerce, travel or group meetings. The credit is also provided to employers who have experienced a greater than 50 percent reduction in quarterly receipts, measured on a year-over-year basis. The credit is not available to employers receiving assistance through the Paycheck Protection Program. The credit is provided through December 31, 2020.

The Delay of Payment of Employer Payroll Taxes allows taxpayers to defer paying the employer portion of certain payroll taxes through the end of 2020, with all 2020 deferred amounts due in two equal installments, one at the end of 2021, the other at the end of 2022. Payroll taxes that can be deferred include the employer portion of FICA taxes, the employer and employee representative portion of Railroad Retirement taxes (that are attributable to the employer FICA rate), and half of SECA tax liability. Deferral is not provided to employers receiving assistance through the Paycheck Protection Program.


Counseling & Training:

Resource partners including Small Business Development Centers (SBDC), Women’s Business Centers (WBC), or SCORE mentorship chapters will receive additional funds to expand their reach and better support small business owners with counseling and up-to-date information regarding COVID-19.

There will soon be a joint platform that consolidates information and resources related to COVID-19 in order to provide consistent, timely information to small businesses.