Throughout the last year of the pandemic in the U.S., people have turned to government aid for help. However, many of the stimulus relief programs in the US are focused on small business owners, rather than property owners. Although the current federal eviction moratorium is necessary to keep renters housed during the crisis, it has had an impact on property owners. The good news is that there are relief programs that you can access. In this post, we will break down three relief options for landlords. Here's what you need to know.
Relief Program 1: Economic Injury Disaster Loan (EIDL)
The Economic Injury Disaster Loan program from the Small Business Administration (SBA), offers low-interest loans to business owners (including landlords) during periods of economic crisis. Although the program existed before the pandemic, it was expanded in 2020.
Landlords can apply for up to $2 million in financing depending on their level of financial need (the SBA will determine the final amount) at a 3.75% interest rate, much lower than most commercial lending programs. The EIDL program application can be completed online and takes about half an hour. You can apply here. The EIDL program will be open for pandemic-related applications until December 31.
In addition to the loan program, in the spring of 2020 the SBA unveiled the EIDL Advance program, $10,000 grants for small business owners in need. The advance program was shuttered after funds ran out, but in early 2021 the EIDL Targeted Advance Program was opened. This is a grant program especially for those who applied for EIDL advances during the first round of funding and didn’t receive them (or received only partial advances), and are located in a low-income census tract. If you’re eligible for the Targeted Advance program, the SBA will send you an email inviting you to apply. You cannot apply without an invitation, unfortunately. You can learn more about the Targeted EIDL Advance program with our guide here.
Relief Program 2: Paycheck Protection Program (PPP)
The PPP program is the U.S.’ flagship coronavirus relief program for small business owners, and was designed to help business owners keep paying employees during the crisis. It allows business owners to apply for 2.5 times their monthly payroll (wages, taxes, and benefits), from lenders throughout the U.S. The program is managed by the SBA. Landlords cannot qualify for a PPP to replace their lost rental income, since that does not qualify as payroll, but that doesn’t mean they can’t get a PPP.
If you pay a property manager or other employee (including yourself) to take care of the needs of your tenants or keep up your rental properties, then you can apply for a PPP that will cover 2.5 times your monthly payroll costs. Here’s our guide to applying for the PPP during this round of funding. We also have partners you can apply through in about five minutes. If you want to apply for a PPP loan, you can apply via our trusted partners, Funding Circle or Bluevine. The PPP will be open for applications until March 31, although the application period may be extended.
Even if you’ve already received a PPP loan, you can apply for a second round of funding. If you are a landlord having difficulty paying your expenses due to the crisis, you should consider applying for the PPP before the program expires.
Relief Program 3: Federal Rental Relief
The most recent U.S. stimulus package (passed in late December), included provisions for landlords and tenants specifically. The package included $25 billion in rental assistance funds which will be used to directly cover rent for struggling tenants. The funding will be distributed by state governments and community organizations, and states are beginning to receive their allocations. Tenants can apply for rental assistance which will be paid to their landlords, but landlords can also apply on their behalf (with permission), and receive reimbursement for up to 15 months of rent. To apply for rental assistance, your tenants' income must be 80% or below their Area Median Income. You can check your area’s Median Income here.
The federal rental assistance funds are reaching states at different times, but most programs should be open for applications in the next few weeks. In the meantime there are also state-run programs you may be able to apply for. You can check the status of your state’s federal allocation and local rental assistance programs with our in-depth guide here. Deadlines for rental assistance programs vary, so check your local program for more info.
Conclusion: There is Help Available
Many property owners have lost income during the crisis, as tenants have been unable to pay rent. There are programs available to help you while the economy recovers. Applying for an EIDL or PPP loan could help you alleviate some financial burden, and you should be able to apply for rental assistance soon if you can’t already. In the meantime, you can apply for the PPP with our partners, Funding Circle or Bluevine.
We'll keep you updated here on the blog as new programs become available. Make sure you download the Skip App so you can get notifications on the latest U.S. stimulus and aid news.