The American Rescue Plan is an approximately $1.9 trillion stimulus plan to reinvigorate the economy after it was shut down for most of 2020. The bill contains billions of dollars in direct payments, job training, support to state and local governments, small business grants, rental assistance, and unemployment. In particular, the plan includes funding for new homeowners’ assistance.
The American Rescue Plan: By the Numbers
The National Association of Realtors (NAR) came out in support of the plan. NAR notes that the American Rescue Plan includes support for state and local governments omitted from stimulus bills last year. Moreover, several reports show that nine out of ten cities anticipated a budget shortfall in 2021, which the American Rescue Plan will address.
The American Rescue Plan provides several benefits:
- Stimulus checks to most Americans up to $1,400 per person and $2,800 per couple.
- $15 billion in business grants.
- $10 billion in housing assistance.
- $20.3 billion in rental assistance.
- Extending unemployment through August 29, 2021.
- Continued forbearance for federally backed loans.
It also provides an extension of the federal moratorium on foreclosures and evictions through September 30, 2021, and an increase in the child tax credit to $3,000 per child will be paid out as a monthly benefit.
How the American Rescue Plan Will Boost the Real Estate Market
The American Rescue Plan includes support for the real estate market in three ways: (1) eviction and foreclosure moratoriums, (2) new housing assistance, and (3) rental assistance. Specifically, the plan includes $9.9 billion to the Homeowners Assistance Fund, which will help homeowners pay overdue taxes, insurance, HOA dues, and mortgages. The funding will be distributed through state housing agencies.
The Rescue Plan will also support stabilizing the market by providing direct cash assistance and expanded unemployment benefits, which should stabilize. Moreover, the benefits will be enhanced as the job market stabilizes, resulting in an uptick in the real estate market.
Finally, and importantly, the Plan provides support to state and local governments. Before the Plan, many cities and local governments warned that they would have to cut services that could impact housing marketing. In particular, cities would have to slow down permit review and approvals for new housing, variances, and additions. With the infusion of funding, local governments can continue providing these services, which should avoid bottlenecks in the market.
