Small Business
The deadline to apply for more than $132 billion still available in the small-business relief program has been extended until Aug. 8.
Congress also took action to smooth the path for companies that already borrowed under the program. They were originally supposed to spend the money within eight weeks -- mostly on payroll -- to qualify for forgiveness of the loans. That was stretched out to as long as 24 weeks.
Student Loans
The CARES Act froze repayments through the end of September on student loans owned by the federal government, which make up about three-quarters of the $1.54 trillion total. Americans will likely save about $7 billion a month while the measure is in place.
When those bills start arriving again in October, there’s a risk that millions won’t be able to pay. Even in 2019, with unemployment at half-century lows, about 11% of student debt was delinquent -- and the New York Fed says that the effective rate is twice as high, since half of the loans weren’t currently due for payment anyway.
Mortgage Borrowers
The CARES Act set up a forbearance program that covered federally insured mortgages. The total payments on loans that qualify for the plan would be about $55 billion a month, the New York Fed estimates.
The Mortgage Bankers Association said this week that 8.2% of loan balances, owed by an estimated 4.1 million homeowners, were in forbearance.
Renters
The CARES Act imposed a freeze on evictions through July 25 for multifamily properties whose mortgages are financed by federal agencies like Fannie Mae. Owners who benefited from mortgage relief are barred from evicting tenants after that date too, for as long as their loans are in forbearance. And the Federal Housing Finance Agency has extended safeguards through at least Aug. 31 for tenants of single-family homes with federally insured mortgages.
All told, the federal measures cover about 12.3 million of the country’s 43.8 million rental homes, according to the Urban Institute. A patchwork of measures by states and cities also offered protection to renters. Some of those have already run out, and others are about to, according to Princeton University’s Eviction Lab.
About one-third of tenants who responded to the Census Bureau’s Household Pulse survey during the first week of July said they had little or no confidence that they could make next month’s payment.
Taxes
Americans were allowed until this week to file their income-tax returns, after the federal deadline was delayed by three months to July 15.
Two other measures will be in place through Dec. 31. Payroll-tax deferral allows businesses to defer their portion of the taxes and repay them in 2021 and 2022. Companies can also claim the Employee Retention Tax Credit through the end of the year. It’s worth as much as $5,000 per employee, and there’s bipartisan support in Congress for increasing that sum in the next stimulus package.
--With assistance from Jenny Leonard, Alan Levin, Alex Tanzi, Prashant Gopal and Dave Merrill.
This article was provided by Bloomberg News.