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John McCarten
Small Business Services Commissioner Gregg Bishop: ‘We are always changing guidance because this is a fluid situation.’The New York State on PAUSE order, a 10-point policy including a directive that all non-essential businesses statewide must close in-office personnel functions, was extended Monday to April 29th by Governor Andrew Cuomo. Governor Cuomo also announced the state is increasing the maximum fine for violations of the state’s social distancing protocol from $500 to $1,000 to help address the lack of adherence to social distancing protocols.
Last month, Cuomo also announced a 90-day moratorium on any residential or commercial evictions and waiving mortgage payments based on financial hardship, no negative reporting to credit bureaus, a grace period for loan modifications, the removal of late payment or online payment fees and postponing foreclosures (some of which has limitations and you can read about more here).
Housing advocacy groups and elected officials are pushing several proposals in the city and state to help tenants and landlords who are experiencing financial hardships due to the impact of the Coronavirus epidemic. Below are some resources and clarifying information for residential and commercial tenants and homeowners:
No evictions but the rent is due
Last month, Governor Cuomo announced there would be a moratorium for 90 days on residential and commercial evictions beginning March 21 but made it clear that rent would still be due on the first every month or all in one lump sum at the end of the 90-day period, until further notice. There are proposals for rent, utility and mortgage forgiveness programs until the Coronavirus epidemic subsides for those New York households that could face evictions once the moratorium is over (you can read more on those proposals here).
On March 27, Mayor de Blasio said the city was working with state officials on the possible suspension of the city’s Rent Guidelines Board which would achieve a freeze on rent-stabilized rents, whether or not they could demonstrate a financial impact from COVID, but not to non-stabilized renters or to commercial tenants. It can impact 2.3 million tenants in nearly 1 million stabilized units but the measure must be approved by the Cuomo administration.
Last month, the Trump administration gave the U.S. Department of Housing and Urban Development (HUD) authority to have the Federal Housing Administration (FHA) implement an immediate foreclosure and eviction moratorium for single family homeowners with FHA-insured mortgages for the next 60 days. The moratorium applies to homeowners with FHA-insured Title II Single Family forward and Home Equity Conversion (or reverse) mortgages: directing mortgage servicers to halt new and current foreclosure actions and cease all evictions of households that own FHA-insured single-family properties.
Residential tenants who are facing difficulties in paying their rent can look into programs such as the One-Shot Deal program which is a one-time payment administered by the city’s Human Resources Administration (HRA) for rent in order to avoid eviction or other financial emergency assistance including home energy and utility bills, disaster assistance including moving expenses and assistance for purchasing personal items for you and your family’s health and safety. The city also recommended landlords and tenants should speak with each other about financial hardships they may be facing due to the impact of the Coronavirus epidemic. Residential tenants should call 311 to find out if they qualify for the One-Shot Deal or other city programs.
For first responders and health care workers, Governor Cuomo announced Monday the creation of the First Responders Fund to assist COVID-19 health care workers and first responders with expenses and costs, including child care.
For NYCHA tenants, NYCHA has two programs to help tenants: the Rent Hardship policy in which a household may qualify for a rent reduction if the household meets all of the following conditions are met: a minimum of 5 percent decrease in gross income, the households current rent is more than 30 percent of the net household income and decreased income has lasted for at least two months.
The second program is the Zero Income Policy, which could help households that experience complete loss of all income. If a NYCHA tenant household reports zero income, they will participate in an interview with a NYCHA Housing Assistant and will complete a Zero Income Questionnaire. The interview can be held over the phone through a property management office or Customer Contact Center at 718-707-7771.
Small biz gets help from city and feds
Despite the state’s eviction moratorium for 90-days that began on March 20 which also applies to commercial tenants, many small businesses have shut down temporarily because there is no business to sustain themselves due to a lack of their average customer base and/or they may not be an essential business (Click here for a list of essential and nonessential businesses). To address those issues, this past Sunday the city’ Small Business Services Commissioner Greg Bishop addressed small businesses over a conference call organized by Councilmember Ydanis Rodriguez. During the conference, Commissioner Bishop said there were three programs, one city and two federal, that could help small businesses impacted by the COVID-19 epidemic.
“We are always changing guidance because this is a fluid situation,” said Bishop.
The city’s Small Business Services launched the NYC Small Business Continuity Loan program March 27 which is available to businesses with fewer than 100 employees that can demonstrate at least a 25 percent decrease in revenue as a result of COVID-19. The program is on a first come, first serve basis and can provide businesses for an interest-free loan up to $75,000. An eligible business must be located within the within the five boroughs, must demonstrate that the COVID-19 outbreak caused at least a 25 percent decrease in revenue, have employed fewer than 100 employees in total across all locations, have been in operation for at least two years. Qualifying firms must demonstrate an ability to repay the loan and have no outstanding tax liens or legal judgements.
SBS will calculate the revenue impact of COVID-19 by comparing an average revenue for two months in 2020 (after the COVID-19 impact) to average revenue for the same two month period in 2019 and average monthly revenue based on total 2019 revenue.
“We are seeing a huge demand for these programs. As the pre-applications are being approved you will be connected with a lender,” said Bishop.
Bishop also said there are federal programs in the COVID-19 stimulus package administered by the U.S. Small Business Administration (SBA). The stimulus provides an estimated $349 billion for small businesses across the country. The first program the Paycheck Protection Program (PPP), a loan created to provide small businesses a direct incentive to keep their workers on the payroll. The federal agency SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.
Small businesses can apply for the PPP loan program through existing and participating SBA 7(a) lenders or through any federally insured depository institution, federally insured credit union, or Farm Credit System institution. There are several types of 7(a) SBA loan programs which provide financial assistance to small businesses and their terms and conditions, like the guarantee percentage and loan amount, may vary by the type of loan. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. According to the SBA website, lenders started processing loan applications April 3rd and the Paycheck Protection Program will be available through June 30, 2020.
For eligible entities impacted by the Coronavirus (COVID-19) epidemic there are some requirements:
- Any small business concern must meet SBA’s size standards (either the industry based sized standard or the alternative size standard). There is an online tool to determine the small business size here: https://www.sba.gov/size-standards/
- Any business which is a 501(c)(3) non-profit organization which can be a corporation, trust, unincorporated association, or other type of organization exempt from federal income tax; a 501(c)(19) veterans organizations where more than 90 percent members are U.S. war veterans and their charitable donations are tax deductible; or a Native tribal business concern Sec. 31(b)(2)(C) where a business is controlled by a tribal government or majority is owned by tribal members, under the Small Business Act with not more than 500 employees or meets the SBA industry size standard of not more than 500 employees.
- Any business with a NAICS (North American Industry Classification System) Code that begins with 72 (Accommodations and Food Services) that has more than one physical location and employs less than 500 per location
- Sole proprietors, independent contractors and self-employed persons
Another program, the SBA’s Economic Injury Disaster Loan will advance up to up to $10,000 for small businesses to help overcome the temporary loss of revenue. The program is for eligible small businesses with less than 500 employees (including sole proprietorships, independent contractors and self-employed persons), private non-profit organizations or 501(c)(19) veterans organizations affected by COVID-19.
Other SBA federal loan programs include the Express Bridge Loan Pilot Program which allows small businesses who currently have a business relationship with an SBA Express Lender to access up to $25,000 and SBA’s debt relief through microloans.
For homeowners:
In March, mortgage waiver and foreclosure moratoriums were announced by the state in conjunction with the city and federal officials. Both moratoriums allow financial institutions to not charge penalties, interest and/or act on foreclosures during the Coronavirus (COVID-19) epidemic, however homeowners are still concerned about the financial impact they could face once the moratoriums expire. The de Blasio administration announced it was ramping up existing programs March 24 to assist property owners who are facing hardships in making their property tax payments administered through the city’s Department of Finance (DOF).
The city agency DOF offers several programs to assist property owners who face hardships making their property tax payments including exemption programs to lower the amount of taxes owed, standard payment plan options as well as the new Property Tax and Interest Deferral (PT AID) program.
The DOF Exemption programs, which lowers the amount of tax owed by reducing a property’s assessed value, offers abatements to reduce taxes by applying credits to the tax amount owed including the Coop and Condo Abatement and programs for seniors, disabled and veterans. The DOF is also offering flexible payment plans customized for each property owner which could also help prevent enforcement from occurring against a property.
Another program, introduced last year, is the Property Tax and Interest Deferral program (PT AID) where qualified property owners can defer their property tax payments, or pay only a small percentage of their income, for a given length of time. The amount each property owner can defer paying is limited to a maximum of 25 percent of the owner equity of a one-, two-, or three-family home, or up to 50 percent of the equity of a condominium unit. The program is open to eligible one-to three-family home and condominium owners and has three payment plan options.
Another option is an income based program, Extenuating Circumstances Income-Based (ECI) Plan, funder which homeowners can enter into a payment plan which limits their payments to a maximum 8 percent of their adjusted gross income while Coronavirus epidemic persists. Qualifying homeowners must meet some of the following criteria: the property must be a one- to three-unit tax class 1 residential property or a condominium, the property must have been the applicant’s primary residence for at least one year, applicants must have a federal adjusted gross income (AGI) of $58,399 or less and applicants must be able to document an extenuating circumstance such as the death or serious illness of a property’s owner or immediate family member, loss of income, etc.
Another payment option is tailored for older homeowners, the Low-Income Senior Plan. Older homeowners experiencing hardship can fully or partially defer payment of their delinquent and future property taxes for either a fixed or indefinite period of time. Property owners can choose to pay zero percent or a full deferral, 25 percent, 50 percent or 75 percent of property taxes. Qualifying homeowners must meet some of the following criteria: property owner must be 65 or older, property must be a one- to three-unit tax class 1 residential property, or a condominium, applicants must have been using the property as their primary residence for at least one year and applicants must have a federal adjusted gross income (AGI) of $58,399 or less.
Lastly, the city also offers a Fixed-Term Income-Based Plan for property owners where the payment plan limits their payments to a maximum of 8 percent of their adjusted gross income. The qualifying property owners must have been the applicant’s primary residence for at least one year, the property must be a one- to three-unit tax class 1 residential property, or a condominium and applicants must have a federal adjusted gross income (AGI) of $58,399 or less.