Temporary Fee Elimination for New 504 Loans
- For new loan approvals from date of enactment of new law (December 27, 2020) through September 30, 2021:
Waives the 0.5% Third Party Lender Participation Fee
Waives the 1.5% CDC Processing Fee
Extension of CARES Act Section 1112 Subsidy Payments (Round 2)
- 3 months of additional payment subsidies starting February 1, 2021 capped at $9,000 per loan per month.
- Certain “underserved” businesses will receive an additional 5 months of subsidy payments in addition to the 3 months provided above. (Based on NAICS code and includes, but not limited to restaurants and hotels).
- 6 months of payment subsidies, capped at $9,000 per loan per month for loans approved from February 1, 2021 - September 30, 2021.
*Borrowers with monthly payments in excess of $9,000/month have been contacted separately with additional details on their payments.
Changes to Debt Refinance Without Expansion
- Elimination of the rule that prohibited refinance of any government guaranteed debt.
- Reduction from 2 years to 6 months time that Qualified Debt had to be on the books for refinance eligibility.
- Elimination of requirement that loan must have been current for not less than 1 year prior to application date.
Other 504 Debt Refinance Changes
- 504 Debt Refinance With Expansion:
- Increase in the amount of debt eligible for refinance from 50% of expansion costs to 100% of expansion costs.
- Refinance of Senior Project Debt:
- During the 1 year period following enactment of the law, a CDC is authorized to allow the refinancing of a senior loan in an amount that, when combined with the outstanding balance of the 504 Loan, is not more than 90% of total Loan to Value.
- Proceeds must be used to support business operating expenses or towards improving existing project property collateral.