End of Year Spending and Covid Relief Package
Updated on December 28, 2020
Yesterday, the President signed into law a $1.4 trillion spending deal for fiscal year 2021 (FY21) with $900 billion of coronavirus relief and a set of tax provisions attached to the package. The House and Senate previously passed the legislation on December 21.
Between the dozen annual appropriations bills, the coronavirus aid, and the tax extenders, the package has many of Enterprise’s top policy priorities, including:
- $25 billion for rental assistance to be administered by the Treasury Department;
- An extension of the current CDC eviction moratorium through January 31, 2021;
- An extension of the deadline for states and localities to spend down Coronavirus Relief Fund dollars through December 31, 2021;
- A permanent, minimum 4 percent Low-Income Housing Tax Credit (Housing Credit) rate, as well as disaster Housing Credits for qualified states;
- A five-year extension of the New Markets Tax Credit (NMTC) at $5 billion for a total of $25 billion in new NMTC authority;
- $41 million for the Section 4 Capacity Building program; and
- Funding for other critical affordable housing programs in FY21 such as the HOME Investment Partnership Program, the Community Development Block Grant program, the Community Development Financial Institutions Fund, Tenant-Based Rental Assistance, and Project-Based Rental Assistance, as well as for critical rural housing programs through USDA.
Enterprise applauds the federal government for providing this much-needed assistance to the more than 30 million Americans who are currently at risk of losing their homes and the nearly eight million Americans that have fallen into poverty over the past five months. This measure will provide vital federal resources to families and businesses to help them weather the storm of this crisis.
While congressional negotiators ultimately sidestepped some of the most contentious issues such as funding for state and local governments and Covid-19 liability protections, they still managed to come to an agreement on several issues that had held up negotiations in the past. Some key highlights of the $900 billion stimulus package include:
- An extension of the current CDC eviction moratorium through the end of January 2021
- An extension of the deadline for states and localities to spend down Coronavirus Relief Fund dollars through December 31, 2021
- $25 billion for rental assistance to be administered by the Treasury Department
- $12 billion for Community Development Financial Institutions and Minority Depository Institutions, including $9 billion in emergency capital injections to eligible CDFIs and Minority Depository Institutions (MDIs) and $3 billion in emergency Covid-19 relief for the CDFI Fund
Some other noteworthy provisions in the package include:
- $325 billion to provide support for small business including $284 billion for the Paycheck Protection Program (PPP) and $20 billion for targeted Economic Injury Disaster Loan Grants
- $166 billion to provide direct payment checks of $600 to individuals with Adjusted Gross Income (AGI) up to $75,000 or $1,200 for married couples with combining AGI up to $150,000, in addition to $600 per child
- $120 billion to extend pandemic unemployment insurance (UI) established by the CARES Act, starting after December 26, 2020, and ending March 14, 2021, with $300 per week in federal UI enhancement included
- $82 billion for education providers
- $69 billion for vaccines, testing, and tracing
- $13 billion for emergency food assistance
- $7 billion to enhance access to broadband
- $2 billion for FEMA’s Disaster Relief Fund
FY21 Spending Deal
After passing their fourth continuing resolution of the year on December 20, extending funding for the federal government for an additional 24 hours, both chambers of Congress passed the $1.4 trillion dollar spending deal for FY21 on December 21.
There are a number of critical affordable housing and community development programs funded in the legislation, particularly the subsections that include HUD, USDA, and FSGG. Enterprise commends lawmakers for generally providing strong funding levels for these priorities:
- $1.35 billion for the HOME Investment Partnership program, equal to its FY20 enacted amount. This program was proposed for elimination in the President’s budget request.
- $3.475 billion for Community Development Fund, $50 million over FY20 (an increase of 1%). This program was proposed for elimination in the President’s budget request.
- $41 million for the Section 4 Capacity Building program, $5 million above FY20 (an increase of 14%). This program was proposed for elimination in the President’s budget request.
- $270 million for Community Development Financial Institutions, $8 million above the FY20 enacted level (an increase of 3%). The President’s budget called for eliminating the program.
- $40 million for USDA’s Section 515 Rental Housing program. This is the same amount enacted in FY20. This program was proposed for elimination in the President’s budget request.
The THUD bill also included $25.777 billion for Tenant-Based Rental Assistance (TBRA), roughly $1.9 billion above the FY20 enacted level (an increase of 8%). Estimates suggest that 2021 TBRA renewal costs will be roughly $300 - $500 million above the bill levels, which should be sufficient if Congress is able to provide more funding in Covid-19 legislation this spring. Project-Based Rental Assistance received $13.465 billion, which was $895 million over the amount enacted in FY20 (an increase of 7%).
Other noteworthy investments in affordable housing provided in the THUD bill include:
- $4.839 billion for the Public Housing Operating Fund
- $3 billion for Homeless Assistance Grants
- $2.765 billion for the Public Housing Capital Fund
- $855 million for Section 202 Housing for the Elderly program
- $430 million for Housing Opportunities for Person with AIDS program
- $227 million for Section 811 Housing for Persons with Disabilities program
- $200 million for the Choice Neighborhoods Initiative
The year-end legislation included a set of tax proposals, including tax extenders and community development tax incentives. Key tax provisions that are Enterprise priorities include:
- Enactment of a permanent, fixed 4 percent Low-Income Housing Tax Credit (Housing Credit) rate effective for any building which receives an allocation of Housing Credit dollar amount after December 31, 2020, and in the case of any building any portion of which is financed with an obligation described in section 42(h)(4)(A), any such building if any such obligation which so finances such building is issued after December 31, 2020.
- Disaster Housing Credit Allocation for states and territories that qualified for FEMA assistance as a result of major natural disasters in 2020 (Alabama, California, Florida, Iowa, Louisiana, Michigan, Mississippi, Oregon, South Carolina, Tennessee, Utah, and Puerto Rico). The disaster credit allocation would be $3.50 multiplied by the number of residents in qualified disaster zones, capped at 65 percent of the state’s 2020 Housing Credit allocation. States would also receive a one-year extension of the placed in service deadline and the 10 percent test deadline for the disaster credits.
- Five-year extension of the New Markets Tax Credit (NMTC) at $5 billion for a total of $25 billion in new NMTC authority
For regular updates on the federal response to Covid-19, stay tuned to our daily newsletter Today in Housing, the Enterprise blog, and our bi-weekly publication, Capitol Express.