The recently enacted CARES Act contains broad and targeted provisions that can help the cash-flow needs of real estate property owners.

For residential property owners and landlords with federally backed mortgages (i.e., Fannie Mae or Freddie Mac), the CARES Act provides relief with forbearance on mortgage payments and foreclosure protection:

  • Multifamily borrowers (five or more units) who were current on their mortgage payments as of Feb. 1, 2020 may request forbearance for up to a maximum of up to 90 days.
  • Individual homeowners and multifamily landlords (four or less units) may be able to request forbearance for up to 12 months. For an individual homeowner or multifamily owner of four or less units (with certain restrictions), the loan servicer of a federally backed mortgage may not initiate the foreclosure process for at least 60 days beginning from March 18, 2020.
  • For multifamily and commercial owners with non-federally backed lenders, certain tax provisions can still provide relief in the form of tax refunds paid in previous years by carrying back net operating losses, accelerated tax depreciation on qualified improvements and increased thresholds for calculating the business interest deduction limitation where a real-estate elect out is not in effect.

If you have any questions, please reach out to GHJ’s COVID-19 Response Team to assist with any aspects of the CARES Act or COVID-19-related questions.

Wu Richard halfbody
POST WRITTEN BY

Richard Wu, CPA, is part of the Federal Tax Compliance group. He has over 10 years of tax compliance and consulting experience with Big Four and other accounting firms in Los Angeles. His specialty is in real estate, where he has provided tax compliance and industry-specific consulting to both…Learn More