Updates and Recommendations for PPP Loan Recipients

As of August 6, 2020, more than 5.1 million organizations have received loans through the Paycheck Protection Program, which was created to help small businesses and their employees during the economic recession resulting from the coronavirus pandemic. With such rapid escalation and use of the program, questions, revisions, and clarifications to the program are to be expected. Most recently, SBA released long awaited guidance on PPP loan forgiveness.

Following are resources, recommendations, and a summary of prior PPP information to be aware of as you implement, seek forgiveness of, and account for your PPP loan.

Recent Resources and Posts

PPP Changes and Guidance

On June 5, 2020, the PPP Flexibility Act was signed into law, authorizing key changes to the program. A joint statement by the Small Business Administration and the U.S. Department of the Treasury summarized the changes:

  • Extension of the Covered Period from 8 Weeks to 24 weeks. This extends the covered period (used to spend loan proceeds on eligible expenses) for loan forgiveness from eight (8) weeks after the date of loan disbursement to 24 weeks after the date of loan disbursement. NOTE: Borrowers retain the option to use an eight-week covered period.
  • Minimum Percentage of PPP Loan Forgiveness for Payroll Costs Decreased from 75% to 60%.
  • Changes to the Term of Loans Made after the Passage of the Act. The minimum maturity of loans was increased to five years for loans made after June 5, 2020. The interest rate remains at 1%. Borrowers with loans made before after June 5, 2020 would be required to renegotiate loan terms.
  • Expansion of Social Security Deferral. Borrowers that receive loan forgiveness can defer depositing the employer side of Social Security through December 31, 2020. The deferred employer Social Security tax will be due on December 31, 2021 (50%) and December 31, 2022 (50%).
  • Two New Exceptions to Receive Full PPP Loan Forgiveness. Two exceptions allow borrowers to achieve full PPP loan forgiveness if they are not able to restore FTEs or pay rates by December 31, 2020. Borrowers will not receive a reduction in loan forgiveness due to FTE or pay rate decreases if they are able to:
    1. Document an inability to return to the same level of business activity as such business was operating at before February 15, 2020, due to compliance with requirements established or guidance issued by the Secretary of Health and Human Services, the Director of the Centers for Disease Control and Prevention or the Occupational Safety and Health Administration during the period beginning on March 1, 2020, and ending December 31, 2020, related to the maintenance of standards for sanitation, social distancing or any other worker or customer safety requirement related to COVID–19; or
    2. Document that they are unable to rehire individuals who were employees on February 15, 2020, and unable to hire similarly qualified employees.

On June 16, 2020, SBA issued a new interim final rule providing guidance on PPP and the changes made under the PPP Flexibility Act, including:

  • How to calculate employee and owner compensation for loan forgiveness in the new 24-week covered period created by the Paycheck Protection Flexibility Act.
  • The Paycheck Protection Flexibility Act tripled the duration during which PPP recipients could spend the funds and still qualify for loan forgiveness –  a span of time called the covered period. The interim final rule adjusts and adds to previous guidance for calculating loan forgiveness under the original eight-week covered period.
  • The PPP allows loan forgiveness for payroll costs – including salary, wages, and tips – for up to $100,000 annualized per employee, or $15,385 per individual over the eight-week period. The new interim final rule establishes the 24-week maximum for full loan forgiveness at $46,154.
Covid-19 Reported Cases per 100,000 population - August 2, 2020

Update: COVID-19 in Rural America – August 2, 2020

The COVID-19 pandemic is a global health crisis affecting nearly every community – including Rural America. While there are still many uncertainties, the health crisis changes daily and the pandemic’s impact on rural communities continues to grow and evolve. The Housing Assistance Council (HAC) presents summary findings of what we know about COVID-19 in rural America as of early August 2020.

 

Covid-19 Reported Cases in Rural America - August 2, 2020

TOTAL REPORTED COVID-19 CASES FEBRUARY 20- AUGUST 2, 2020

On March 16, 2020, the CDC issued guidelines for Social Distancing. As of August 2, 2020, there were more than 460,000 reported cases of COVID-19 and deaths from the virus have now surpassed 10,000 in communities outside of Metropolitan Areas. All but 32 counties outside of metropolitan areas have reported COVID-19 cases, and now over 60 percent of these counties have also reported associated deaths related to the virus.

Outside Metropolitan Cumulative Covid-19 Cases - August 2, 2020

 

NEWLY REPORTED COVID-19 CASES FEBRUARY 20 – AUGUST 2, 2020

The level of new COVID-19 reported cases grew dramatically in July and the number of reported cases outside of metropolitan areas continued to skyrocket as well. From July 2 to August 2 there were almost as many new reported rural cases (225,553) than had been reported for the prior 5 months in total (235,201). There were a reported 3,381 rural deaths related to COVID-19 in the past month as well.

Covid-10 New Reported Cases - August 2, 2020

RURAL SHARE OF COVID-19 REPORTED CASES

Initial impacts of COVID-19 were greatest in urban communities and particularly devastating to some metropolitan areas. As of August 2, 2020, approximately 10 percent of COVID-19 cases and 7 percent of associated deaths have been reported in rural communities. But the rural share of COVID-19 cases continues to rise nationally.

Covid-19 New Reported Cases - August 2, 2020

Reported Rural COVID-19 Rates per 100,000
Over 98 percent of rural communities have reported COVID-19 cases, but the virus’ impacts vary widely across the nation’s rural geography. There are several instances of extremely high per-capita infection rates in rural areas – notably on some Native American lands and communities with meat packing and correctional facilities.  From July 2- August 2, the case and death rates increased most dramatically in the rural Southeast.

Covid-19 Reported Cases per 100,000 population - August 2, 2020

 

To access all graphics and interactive maps visit: https://arcg.is/1HH0H4.

ABOUT THE DATA

The information in this brief derives from Housing Assistance Council tabulations of data from The New York Times, based on reports from state and local health agencies, and the U.S. Census Bureau’s 2014-2018 American Community Survey.
In these analyses, the terms “rural” and Outside Metropolitan Areas are synonymous and refer to counties and counts outside of OMB designated Metropolitan Areas. 

HAC urges support of rural housing programs in Covid-19 relief efforts

HAC would like to thank all of the organizations that expressed their support of rural housing programs!

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Organizations


Congress is currently working to negotiate a fourth COVID-19 relief package. Rural housing programs have yet to receive any supplemental funding to address this growing crisis in small towns and rural communities. HAC is circulating a sign-on letter to Congressional leadership in support of including rural housing funding in the next relief package. You can view the text of the letter here. As a valued friend of HAC, we hope that you will add your organization’s name to this effort.

If you have any questions, please reach out to HAC’s Government Relations Manager, Samantha Booth, at samantha@ruralhome.orgThe deadline to sign on is Wednesday, July 22nd. We appreciate your help.

 

Rural Unemployment Skyrockets After Economic Fallout from Covid-19

Unemployment Outside of Metro Areas - March to April 2020

To access an interactive version of this map visit: https://arcg.is/1maDDW

The most recent data from the Bureau of Labor Statistics indicates that rural labor markets were deeply impacted by the COVID-19 health crisis. The April jobs numbers revealed a seasonally unadjusted unemployment rate of 13.7 percent for counties outside of metropolitan areas. The rural unemployment rate for March was 4.9 percent and the overall rural unemployment rate had been trending downwards until the onset of the crisis. Across the nation over 2.8 million rural workers were unemployed in April – an astounding increase of 1.8 million jobless in one month. Like the health crisis itself, the increases in unemployment varied by community but most rural communities experienced large increases in their unemployment rates.

Potential Unemployment Ramifications for Rural Housing

Unemployment Rate Outside Metropolitan Areas-2019-2020

Jobs and employment conditions have traditionally been a bellwether and leading indicator for housing trends. While the unemployment caused by COVID-19 is unprecedented and unpredictable, such high jobless rates signal the potential for serious concerns across the housing spectrum. Many Americans have been buoyed by large scale federal unemployment benefits and economic stimulus. But most of those resources are slated to end abruptly in the coming months. If rural unemployment rates remain anywhere near these historic levels, the collateral impacts to almost all sectors of the housing market could be substantial – notably the ability of unemployed households to make rent and mortgage payments.

To view the full interactive Story Map please visit: https://arcg.is/WGm4r

About the Data: Information for this Brief derives from HAC tabulations of data from the Bureau of Labor Statistics’ Local Area Unemployment Statistics (LAUS) reporting. https://www.bls.gov/lau/  In this Brief the terms Outside Metropolitan Area and Rural are used synonymously and refer to counties and population outside of the Office of Management and Budget (OMB) designated Metropolitan Areas. https://www.whitehouse.gov/wp-content/uploads/2018/09/Bulletin-18-04.pdf

Governance, Planning and CARES Act Information for Rural Housing and Arts Organizations

The Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law on March 27, 2020, provides assistance for small businesses (including rural housing and arts organizations). HAC has compiled details and resources on this page.

Check out all of HAC’s coronavirus resource pages here.

On this page:

CARES Act Information

UnidosUS CARES: Explaining Covid-19 Relief for Latino Families, UnidosUS (videos in English and Spanish)

Coronavirus Relief Options, Small Business Administration

Loans Available for Nonprofits in the CARES Act, National Council of Nonprofits, April 5, 2020

The Small Business Owner’s Guide to the CARES Act, Senate Small Business Committee

Small Business Provisions in the CARES Act, Senate Small Business Committee, Minority (Democratic)

What the Families First Coronavirus Protection Act Means to Nonprofits, National Council of Nonprofits, March 2020 (this Act preceded the CARES Act and was signed into law on March 19, 2020)

Find a State Association of Nonprofits through this page

Interim Guidance for Administrators and Leaders of Community- and Faith-Based Organizations to Plan, Prepare and Respond to Coronavirus Diseas 2019, Centers for Disease Control

Pivoting to Remote Work – COVID-19 Response Course Track for Nonprofits, TechSoup (free online courses)

SBA Economic Injury Disaster Loans and Advances – for Agricultural Businesses

 NEW HERE ON MAY 12: The Small Business Administration is currently accepting applications for Economic Injury Disaster Loans and Advances ONLY from agricultural businesses with 500 or fewer employees. EIDL loans can be used to pay fixed debts, payroll, accounts payable, and other bills that would have be paid had the pandemic not occurred. EIDL is not intended to offset lost sales or profits, or to pay for business expansion.

NEW HERE ON MAY 12: Stakeholder Announcement: USDA Leadership … Update Stakeholders on Accessing SBA Relief Programs, April 24, 2020

Funding Resources Not Related to the CARES Act

NEW HERE ON MAY 12: Covid Grants Program for organizations in Arkansas, $5,000-$150,000, no application deadline, Blue & You Foundation

NEW HERE ON MAY 12: Emergency loans and grants for organizations affected by COVID-19, Open Road Alliance. “We will prioritize organizations and activities that have a clear and direct role in ‘flattening the curve’ and thus limiting, shortening, or minimizing the economic and social, as well as health effects of the pandemic.”

NEW HERE ON MAY 12: Grants for organizations working in Central Appalachia, up to $3,000, deadline May 31, Appalachian Community Fund

NEW HERE ON MAY 12: Support for organizations working in Texas, Reliant Gives

NEW HERE ON MAY 12: Foundation Requests for Proposals for Covid-19 Relief, Chronicle of Philanthropy, May 12, 2020

Updated Daily: Help for Nonprofits During the Coronavirus and Uncertain Economic Times, Chronicle of Philanthropy

FindHelp.org (“Find food assistance, help paying bills, and other free or reduced cost programs, including new programs for the COVID-19 pandemic”)

Funding for Coronavirus (COVID-19) [for nonprofits], Candid, undated but updated regularly

Williams Foundation for organizations in these states, March 27, 2020

HIP COVID-19 Rapid Response Migration Fund, Hispanics in Philanthropy, March 18, 2020

Coronavirus Rapid Response Funds, Chronicle of Philanthropy, March 12, 2020

Planning for Ongoing Changes

Review Policies and Procedures

  1. Review your organization’s policies related to illness and sick leave to ensure your policies and practices are consistent with public health recommendations and are consistent with existing state and federal workplace laws.
  2. Develop a plan for communicating with your employees in a rapidly changing environment. Identify how will you communicate with employees if changes are required.
  3. Evaluate how staff can work from home. This will require you to consider the aspects of each role that can be completed remotely, access to technology, and access to broadband.
  4. Establish a short-term plan to increase staff effectiveness within one week. If needed, draft a 15-day plan to coordinate resources, tools, and technology to increase the effectiveness of as many staff as possible.
  5. If you have essential workers or your organization is still operating in public settings, make it easy for people to practice good hygiene by providing tissues and no-touch disposal receptacles and placing alcohol-based hand rubs in multiple places in common spaces.
  6. See the CDC’s Interim Guidance for Businesses and Employers to Plan and Respond to Coronavirus Disease for recommendations and considerations for creating an infectious disease outbreak response plan.

How to Adapt Your Nonprofit’s Sick-Leave Policy During Covid-19, Lisa Schohl, The Chronicle of Philanthropy, March 30, 2020
How Charities Can Make Working From Home Work for Everyone, Scott Westcott, The Chronicle of Philanthropy, April 21, 2013
Pivoting to Remote Work – COVID 19 Response Course Track for Nonprofits, TechSoup (free online courses)

Review Your Organization’s Finances

  1. Understand your financial position in terms of net assets and liquidity.
  2. Identify implications on revenue and expenses.
  3. Manage your cash flow.

From Sustainability to Survivability: How Nonprofits Can Manage Uncertainty Amid Crisis, Steve Zimmerman, Spectrum Nonprofit Services, undated
Financial Leadership in the Face of Impossible Choices, Curtis Klotz, Innovation in Nonprofit Finance Blog, March 18, 2020

Continuity and Recovery Planning

A business continuity plan is a written document outlining how a business will operate during an emergency.

Business Continuity and Disaster Recovery Plan Template, Nonprofit New York
Nonprofit Disaster Planning and Recovery, TechSoup
Crisis Management Essentials, Nonprofit Risk Management Center
The Future is Now: Preparing for the Unknown Crisis, Nonprofit Risk Management Center

Managing Grants and Fundraising

Do you have grants that are tied to deliverables? Government contracts to provide services? Assess your organization’s capacity to meet deliverables over the next 30, 60, and 90 days. Communicate with funds and government contacts to inform them how your work is impacted.

How Nonprofits Should Approach Fundraising and Donor Communications during the Coronavirus Pandemic and Financial Crisis, nonprofitPR.org
10 Things Fundraisers Can Do From Home During the COVID-19 Pandemic, Adam Ruble, sgEngage, March 17, 2020

Board Member Responsibilities

What Nonprofit Board Members Should Be Doing Right Now to Address the COVID-19 Situation, Joy Folkedahl and Lindsay Tallman, BoardSource, March 16, 2020
Nonprofit Governance: Coronavirus and COVID-19, Gene Takagi, NEO Law Group, March 11, 2020

Participate in Public Decision-Making

Participate in the process at all levels of government and with funders to share the needs of your clients and the communities you serve. Things are too chaotic to wait for an invitation. Inform yourself, request to be heard, and be a part of the process.

The Paycheck Protection Program (Emergency SBA 7(a) Loans)

Small Business Administration PPP site

Applications are accepted by SBA-approved lenders.  Most entities report that time is of the essence because funds are expected to be oversubscribed.

  1. Most statewide nonprofit associations are putting out information and providing email updates.  Hopefully these statewide organizations will also track which lenders are making loans for each state, region.  Here are two such resource guides for Virginia (where some of the following information comes from) and Georgia.
  2. This is the best and simplest resource for quickly comparing and learning the basics of CARES Act loan options for nonprofits, including the Paycheck Protection Program.
  3. The US Chamber of Commerce created the easy to understand Coronavirus Emergency Loans resource guide addressing eligibility, loan forgivability parameters, and the information required to apply.
  4. It appears that all lenders will use the same SBA Paycheck Protection Program Loan template.  It will help local nonprofits clearly understand what they need in order to apply.

Resources Related to Coronavirus and Rural Housing

On this page HAC collects the latest news on USDA policy, federal relief and stimulus funds, stakeholder recommendations and more to help local rural housing organizations respond.

Check out all of HAC’s coronavirus resource pages here.

On this page:

U.S. DEPARTMENT OF AGRICULTURE (USDA) 

U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HUD)

CENTERS FOR DISEASE CONTROL AND PREVENTION

FEMA

LISTS OF STATE AND LOCAL EVICTION MORATORIA

OTHERS

WEBINARS

 

Coronavirus impact survey from the Federal Reserve System

The Federal Reserve System is circulatng the following message and survey in an attempt to better understand the impact of Coronavirus in vulnerable communities. Please submit your responses to  make sure that underserved rural communities have their voices represented.  The survey will close at 11:59 Eastern time on Friday April 10.

The spread of the coronavirus (COVID-19) and the many efforts to slow it are affecting communities throughout the United States. At the Federal Reserve, we are committed to supporting people and businesses with every tool we have. But, to do so effectively requires a deep understanding of conditions on the ground.

We need your help. The Federal Reserve System is conducting a survey to understand better the range of challenges facing under resourced and low-income communities. It will also help us understand how this crisis is affecting organizations, like yours, that are supporting community needs.

Please take this survey today. The survey should take about 10 minutes to complete. If you have received the invitation to complete the survey from another Federal Reserve entity, please only take the survey once.

Start Survey
The survey will close at 11:59 p.m. EST / 8:59 p.m. PST on Friday, April 10, 2020

Thank you very much for your time and participation,

Resources Related to Coronavirus and the Arts in Rural America

As a key partner in the Citizens’ Institute on Rural Design, HAC knows the pandemic threatens community arts in rural America. Updates and resources are posted here.

Check out all of HAC’s coronavirus resource pages here.

HAC’s page on governance, planning and CARES Act information for rural nonprofits is here.

 

WANT TO SUGGEST AN ADDITION FOR THIS PAGE? Please email Leslie Strauss at HAC.

Third Coronavirus Relief Bill Stops Evictions, Funds HUD But Not USDA Housing

Several HUD programs receive funding boosts under the latest coronavirus relief package. USDA tenants and homeowners – along with those assisted by other federal programs – are protected from eviction, although no additional funds are provided for USDA’s rural housing programs.

Check out HAC’s coronavirus resource pages here.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act, H.R. 748, passed the Senate on March 25 and the House on March 27. President Trump is expected to sign it. A fourth relief/stimulus measure is likely in the future, and could include additional housing provisions, but it is not clear when such a bill might be considered. The House and Senate will both go out of session after voting on the CARES Act.

Tenant Protections

The CARES Act establishes a 120-day moratorium on beginning proceedings to evict tenants for nonpayment of rent or other charges. (Tenants could still be evicted for other reasons.) Landlords also may not charge fees or penalties for nonpayment of rent during this time period. The 120-day period will start when President Trump signs the bill.

Protected tenants are those living in rental properties that receive any type of federal assistance, including USDA’s Section 515, Section 514/516 and Section 538 programs. (The bill uses different language for provisions referring to rental properties of one to four units and those with five or more units, but the protections are the same for tenants in properties of any size.)

The bill’s moratorium applies only to new evictions. It does not stop evictions that are already in process when the bill takes effect.

Many states and localities have imposed more stringent eviction moratoria. It is not clear whether those measures would supersede the CARES Act’s provisions. If a state or locality has a less stringent moratorium, the CARES Act would apply.

Rental Property Owner Protections

Owners of rental properties with five or more units and federally backed mortgages can request forbearance if they were current on mortgage payments as of February 1. An owner must contact the company or agency to which they make mortgage payments and say they are experiencing financial hardship. The mortgage company or agency must provide forbearance for 30 days. The property owner can request two additional 30-day forbearance periods.

Homeowner Protections

The CARES Act imposes a moratorium on foreclosures for homeowners with mortgages backed by any federal programs. This seems to apply to foreclosures that have already begun as well as new ones. It takes effect on March 18 and lasts for 60 days.

The bill does not provide automatic protection for homeowners who have difficulty meeting their mortgage payments, but it gives them the right to request forbearance from their mortgage lender, with an explanation that they are experiencing financial hardship because of the coronavirus crisis. The lender is required to grant forbearance for up to 180 days, with an extension of another 180 days if needed. The homeowner will still need to make the payments eventually.

These provisions apply to homeowners with mortgages made or guaranteed by USDA under Section 502, as well as to those with mortgages insured or guaranteed by HUD’s Section 184 program for Native Americans and Alaska Natives and 184A program for Native Hawaiians, FHA (including home equity conversion mortgages, often called “reverse” mortgages), or VA. And it applies to mortgages purchased by Fannie Mae or Freddie Mac. Most home mortgages in the U.S. are backed by Fannie Mae or Freddie Mac, but a mortgage issued by a community-based bank in a rural area may not be. Information about how to determine whether your mortgage is backed by a federal agency is provided here by the National Consumer Law Center.

Any homebuyer with coronavirus-related mortgage concerns should immediately contact the bank or agency where they send mortgage payments to discuss a forbearance agreement.

Letter from HAC CEO David Lipsetz

Dear Friends,

As a global community, we face an unprecedented challenge in the coming weeks and months as the COVID-19 pandemic moves through our cities, towns, and rural places. In the high-needs rural regions where HAC has worked for nearly 50 years, this challenge will be acutely felt. Rural communities are resilient, but face unique challenges with access to health care, services, broadband, and other basic social safety nets. Both on the ground and in Washington D.C., we are working with policymakers, partners, and funders to determine the best ways to continue to support the rural places and people we serve.

Like many of our friends and partners, HAC staff will be working remotely in the coming weeks to protect the health of our team and to do our part to help slow the spread of the virus in our communities. We are also limiting non-essential travel, events, in-person meetings. But rest assured, HAC staff are working hard and are ready to help in any way we can.

We also recognize that our local partners will likely face additional pressure to respond to the needs of the rural communities you serve. As always, we will be as responsive and flexible as possible and work hand-in-hand with you as this situation progresses.

We encourage you to check back regularly, as this page will be updated to include relevant resources as they become available.

Please reach out to any HAC staff member if you have questions.

Be well,

David Lipsetz, CEO