Defaulting on a home loan can have major financial consequences for the borrower. One form of default occurs when you don’t make your mortgage payments. When this occurs, the bank may decide to pursue a foreclosure on the property. Depending upon the state, the bank may be able to come after you for money following the foreclosure.
Foreclosures
A foreclosure permits the bank to take possession of the home. The bank will seek to recoup some of the money owed on the mortgage loan. To do this, the bank will generally place the home up for sale. If the price of the home sale doesn’t cover the balance due on the mortgage loan, the difference is referred to as a deficiency. Depending upon your state law, you may be responsible for the deficiency amount and the lender may be able to pursue collection of that amount from you.
Recourse and Non-Recourse
Some states have loan recourse laws that permit a bank to seek legal action for a deficiency. In these states, the bank can file a lawsuit against you. The goal of the lawsuit is to obtain a judgment for the deficiency amount. Other states are non-recourse. This means that if you default on the mortgage loan, the bank can foreclose on the property but cannot sue you for any remaining deficiency amount. In this case, the bank will write the deficiency amount off as a loss. Check with your state’s attorney general to see if your state is recourse or non-recourse.
Consequences
A deficiency judgment can place your personal assets at risk. A judgment gives the judgment owner the legal right to go after your assets in satisfaction of the judgment debt. For example, the bank may be able to garnish some of your employment wages. It may also be able to seize money in your checking or savings accounts up to the amount owed under the judgment. Plus, the bank may be able to place a lien on property that you own.
Considerations
A deficiency from a foreclosure can follow you for several years. Even if you’re insolvent now, or currently lacking assets that the bank can seize, a judgment gives the bank the legal right to pursue payment of the judgment from you for years to come. Judgments have statutes of limitations and within this time frame, the bank may try to seize your assets. This time period will vary from state to state. In Florida, for example, the statute of limitations on judgments is 20 years.
Confused about how to build business credit? You’re not alone.
Many business owners and entrepreneurs don’t realize the key differences between business credit and personal credit, so let’s start there.
Your business credit and personal credit aren’t linked — but they may be related.
Business and personal credit contains different information, so the scores aren’t necessarily correlated. But if you’re a sole proprietor, it’s a good bet that banks and other lenders will reference your personal credit to see how well you manage debt.
“Many lenders review your personal credit before extending business credit,” says Caton Hanson, co-founder and chief legal officer of Nav, a company that helps business owners understand and monitor their business credit.
This is especially likely if you sign a personal guarantee when taking out a small business loan or opening a business credit card. A personal guarantee basically ensures you’ll be personally liable for the debt — a situation you want to avoid if possible, as it could put your personal assets at risk.
While your business credit and personal credit may be related in certain cases, you can take steps to separate them as your business grows.Find a credit card that works for meExplore Cards Now
Building business credit can take time
Even if you never plan on taking out a loan or tapping a line of credit, it can’t hurt to build your business credit. In fact, your business insurance premiums, equipment or office lease agreements, vendors’ terms, and ability to work with other companies could be influenced by it.
The good news? You can take steps to build your business credit even if your personal credit isn’t great. And once you’ve established good business credit, you may be able to qualify for financing without a personal guarantee.
The credit bureaus need to know your business exists before they can create credit reports for it. Here are some of the steps you may have to take to start building business credit:
Incorporate your business or form an LLC (limited liability company). This ensures your business entity will be separate from your personal identity.
Get a federal employer identification number (EIN). This is a free service offered by the IRS, and it also serves to identify you as a business entity. Apply for an EIN here.
Open checking and savings accounts for your business. Make sure you use your legal business name for any of your business banking accounts.
Get a dedicated business phone line. You’ll also want to make sure it’s listed under your legal business name.
Register with Dun & Bradstreet to get a D-U-N-S Number®. This is a nine-digit number used to identify each physical location of your business. It’s free for all businesses required to register with the federal government for contracts or grants. Get one here.
2. Scan your business credit reports for errors.
Business credit reporting agencies gather information from a variety of sources. Your business credit reports may include:
Your company’s contact information.
An overview of your business type and industry, key personnel, number of employees, years in business, subsidiaries and branches, and sales.
Financial data, including your business’s estimated sales, available credit, historical use of credit, payment history, credit inquiries and collection accounts.
Public records information, such as tax liens, judgments, lawsuits, bankruptcies or fraudulent activity related to your business.
Depending on the type of report, it may also contain a business credit score, recommendations from the business credit reporting agency for how much credit lenders should extend to your business and predictions from the business credit reporting agency on how likely your business is to fail.
Make sure the information in the reports is accurate and contact the bureaus individually to report and correct errors.
Wait… there’s more than one type of business credit report?
Yes! Dun & Bradstreet®, Experian® Business and Equifax® Business all create their own business credit reports. Some lenders and vendors may also turn to specialty business credit reports provided by other companies when evaluating your business.Find a credit card that works for meExplore Cards Now
3. Establish trade lines.
While a lot of information can wind up on your business credit reports, trade lines can be particularly important.
Business trade lines are lines of credit established between a business and a vendor, such as an account with an office supply company where the company allows the business to pay the account balance several days or weeks after receiving the inventory.
Vendors may report this account to any reporting agency, but they’re not required to do so. Depending on the type of credit report, a trade line that’s reported may include information such as your available credit, the amount owed, the terms of the account, recent activity and when you pay, relative to your due date.
You could have a business credit report without any trade lines, but it may be hard to build business credit without any. This is because your number of trade lines and your payment history may be factors in your business credit file.
Here’s where you need to watch out: Not every vendor will report your payment activity. So even if you always pay your vendors early or on time, you may not be building your business credit.
If you’re trying to boost your business credit, you may want to start opening business trade lines or accounts, such as a business credit card, with companies who report to the business credit reporting bureaus.
Just be careful about opening an account with an annual fee, as you don’t want to have to pay just to keep an account open and you may be able to find more cost-effective options.
You may also consider opening term accounts with suppliers who will report your activity to at least one bureau. You can ask the vendor if and who they’ll report your payments to before opening an account to ensure it’ll help your credit.
4. Pay on time — even better, pay early.
Your payment history with vendors, lenders and credit card issuers is an important factor in your business credit score. In fact, making on-time payments may be just as important with your business accounts as it is with your personal accounts.
“If you’re late by just a few days, those late payments may show up in your business credit reports,” Hanson warns. “With personal credit, a late payment may not be reported to the credit bureaus until you fall behind by 30 days.”
Paying early could be beneficial as well. “With some business credit scores, such as the Paydex® score provided by Dun & Bradstreet, to get higher than an 80 (out of 100), you need to pay your bills early,” Hanson adds.
5. Keep working on your personal credit.
We’ll be the first to admit that the relationship between business credit and personal credit can be a little confusing.
On one hand, personal and business credit reports rely on different information and can be completely separate.
On the other hand, it’s becoming increasingly common for business credit scores to rely on blended data that integrate the business owners’ personal credit.
Still confused? Think about it this way: It’s generally a good idea to assume that your personal credit matters for business, especially if you’re a sole proprietor or just starting out. If your personal credit isn’t quite where you’d like it to be, you may want to review a few ways to build your credit from scratch.
Bottom line
Your personal credit could be hurting for a variety of reasons, but don’t let that hold your business back.
Start building your business credit now, so it will be established if you ever need it. Even if you don’t plan on taking out a loan, keep in mind that business is unpredictable by nature. You never know when you could benefit from a rock-solid business credit score.
Reader question: “We will be purchasing our first home in early 2020. My question has to do with the home inspection and offer process, and the timing of those two things. Does the home inspection usually happen before or after the offer is made to the seller?”
The short answer: While the home buying process can vary from one buyer to another, it usually follows a certain series of steps. In most cases, the inspection happens after the offer has been accepted by the seller. This is a logical sequence of events for both the home buyer and seller, and you’ll soon see why.
The Inspection Usually Happens After the Offer
It’s entirely possible to inspect a home before making an offer to buy it. You would just need permission from the homeowner / seller, in order to schedule the inspection and give the inspector access to the property.
But that’s not how it works in a typical home buying scenario.
In most cases, the buyer’s inspection will take place after they have made an offer and the seller has accepted it. We will examine the reasons why this makes sense in a moment. But first, let’s take a look at the steps that occur during a typical home buying scenario.
Here’s the typical sequence of events:
The home buyers get their financing lined up and begin the house hunting process.
The buyers find a property that meets their needs and also falls within their budget.
They make an offer to purchase the home, using a standard real estate purchase agreement document. In many cases, it’s actually the buyer’s real estate agent who submits the offer to the seller.
The seller accepts the buyer’s offer, agreeing to the price and other terms that were written into the contract
The two parties will then sign the real estate purchase agreement, and the deal moves forward.
At this point, home buyers often schedule an inspection to learn more about the true condition of the property they’re buying.
Those are the basic steps that lead up to the home inspection process. And you’ll notice it happens after an offer has been made and accepted — not before. It makes sense to handle the steps in this order, for both the buyer and the seller. So let’s look at it from both perspectives.
Advantages for the Home Buyer
As the buyer in a real estate transaction, you will be the one paying for the home inspection. They typically cost somewhere between $300 and $500, on average.
You wouldn’t want to spend that kind of money unless you were sure the seller was going to accept your offer. That’s why it makes sense to make the offer first, and then coordinate the inspection afterward.
Having the home inspection take place after the offer – and before the closing process – also gives the home buyer a chance to back out of the deal in some cases. We’ve covered this topic before. Here’s a quick recap:
When buying a house, you have the opportunity to write certain “contingencies” into your purchase offer. (Here’s an article that explains the different types of contingencies.) Basically, they give you a way to back out of the contract if a certain situation or condition arises, such as an unsatisfactory home inspection.
But this kind of “contingency clause” must be written into the contract at the start. This is another reason why it’s logical to conduct the inspection after the offer is accepted.
From the Seller’s Perspective…
In a typical real estate purchasing scenario, the homeowner won’t allow the inspection to take place until after they’ve accepted the offer. And it’s easy to understand why, if you put yourself in their shoes.
The home inspection is somewhat invasive for the seller. In most cases, the sellers will leave so that the inspector can do what he needs to do uninterrupted. They also have to grant the inspector access to the house.
Most sellers will only go through this process once they have accepted what they feel is a reasonable offer from a buyer. If they reversed the process, and allowed for a home inspection before the offer, they might be having an inspector examining their home for no reason. Maybe the buyer comes in with a low offer, which the seller then turns down.
In that case the whole home inspection process was a waste of time for everyone. (Not to mention being a waste of money for the buyer.)
It’s also important to realize that home inspections are not mandatory. At HBI, we strongly encourage buyers to have a property inspected before purchasing it. That’s the best way to learn about the true condition of the property. But they’re not required by law. You could make an offer to buy a home and skip the inspection, if you wanted to.
But if you do choose to have one, there’s a good chance it will take place after the offer — not before. We talked about the reasons why. It makes sense from both the buyer’s and the seller’s perspective. You negotiate the offer first, get a signed contract, and then proceed with the home inspection, appraisal.
Raising a financially literate child doesn’t have to be difficult.By Taylor Pittman
In a world of credit cards, online banking, tax codes, investments and retirement plans, keeping up with money can be tough for adults, and even more so for kids.
So, for the many parents who want to teach their kid economic ideas and prepare them for their financial futures, where the heck is the starting point?
We asked financial experts to break down the best ways to actually teach kids the value of money. Here’s their advice:
“It’s like if you were to read academically about football and then go out and try to play football,” Whitlow told HuffPost. “The act of reading about and playing it are two different things.”
That’s why it’s important for families to speak openly about finances when possible ― like their budget, for example ― to encourage questions from their kids and to set them up to be better prepared in their financial future. This means taking a minute after swiping your debit or credit card to explain that the little thing in your wallet is not the source of limitless money.
Whitlow also noted that money conversations with kids are opportune times to discuss the difference between “what you need to have to function in life and what you want to have in life.”
“We’ve made money into a foreign language. 401(k) and 529, those are tax code language, and why would we expect the average person to understand the tax code language?”- TANYA VAN COURT, CEO AND FOUNDER OF GOALSETTER
Van Court wasn’t taught financial basics as a kid, so she made sure to introduce it to her own children. To help other families do the same, Goalsetter offers an Urban Financial Dictionary that explains financial terms and associates them with movies, TV shows, song lyrics and more.
How Did The Civil War Change The American Currency?
The Act entitled “An Act to provide a national currency secured by a pledge of United States bonds, and to provide for the circulation and redemption thereof,” approved June 3, 1864, shall be known as “The National Bank Act.”
The National Bank Act of 1863 was designed to create a national banking system, float federal war loans, and establish a national currency. Congress passed the act to help resolve the financial crisis that emerged during the early days of the American Civil War (1861–1865).
Three results of the National Banking Acts of 1863 and 1864 were that they gave the federal government the power to charter banks, the power to require banks to hold adequate gold and silver reserves to cover their bank notes, and the power to issue a single national currency.
COURT CHALLENGES
As part of Chase’s plan for financing the war, the statutes passed during the early 1860s imposed taxes on the capital and bank notes of commercial banks, both state and national. With the tax on state-chartered banks, Chase was attempting to encourage them to convert to national charters. This plan was challenged in Veazie Bank v. Fenno (1869), in which Chase, by then Chief Justice of the Supreme Court, wrote the majority opinion. The Court upheld the constitutionality of the tax, but it did not directly address the constitutionality of the NBA to grant banking charters.
That issue was finally addressed in passing in Farmers’ & Mechanics’ National Bank v. Dearing (1875). The Supreme Court stated that the constitutionality of the NBA rested “on the same principle as the act creating the second bank of the United States.” That principle was upheld under the necessary and proper clause of Article I, section 8 of the Constitution in McCulloch v. Maryland (1819) and Osborn v. Bank of the United States (1824). The validity of the NBA has been unchallenged since then.
The New Year may bring with it big changes. Promising late-stage coronavirus disease 2019 (COVID-19) vaccine results may soon end the pandemic. Meanwhile, President-elect Joe Biden’s inauguration on Jan. 20, 2021, will usher in a new era for politics on Capitol Hill.
But some of the biggest changes in the upcoming year are to be found in the Social Security program. Whether you’re receiving benefits or are working toward your eventual retirement, it’s possible that these changes will affect what you’ll take home in 2021 or beyond.
IMAGE SOURCE: GETTY IMAGES.
Beneficiaries are getting a raise (albeit a small one)
As recently as May, the outlook was bleak for the U.S. economy and the 46 million-plus retired workers who count on a monthly benefit check from Social Security. The coronavirus pandemic was wreaking havoc on the U.S. economy and the average prices for goods and services were falling.
Federal stimulus and an easing of state-level restrictions during the late spring and summer months allowed the U.S. economy to regain its footing somewhat. This allowed the prices of goods and services in important spending categories (e.g., shelter, medical care services, and food) to head meaningfully higher. As a result, Social Security beneficiaries will net a 1.3% cost-of-living adjustment (COLA) in 2021.
Before you break open the bubbly, keep in mind that this 1.3% COLA ties for the second-smallest positive COLA on record since 1975. In fact, the past 11 years have been pretty brutal for Social Security recipients, with an average COLA of only 1.4% over that span. These persistently low COLAs have eroded the purchasing power of Social Security dollars over the last two decades.
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The well-to-do are going to pay more
Social Security has three sources of funding: the 12.4% payroll tax on earned income, interest income earned on its asset reserves, and the taxation of benefits. The payroll tax is, by far, the most important revenue generator, accounting for $944.5 billion of the $1.06 trillion collected in 2019.
This year, earned income (wages and salary, but not investment income) between $0.01 and $137,700 is subject to Social Security payroll tax. Meanwhile, any earned income above $137,700 is exempted from the payroll tax.
Next year, the upper bound of this taxable threshold, known as the maximum taxable earnings cap, is rising by $5,100 to $142,800. Since 94% of working Americans earn less than the maximum taxable earnings cap each year, this increase won’t affect them. But the other 6% could owe up to $632.40 extra in payroll tax in 2021.
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The full retirement age is on the rise
Back in 1983, the Reagan administration passed the last sweeping bipartisan overhaul of the Social Security program. The Amendments of 1983 introduced the taxation of benefits, gradually increased payroll taxation, and set out a four-decade gradual increase of the full retirement age — i.e., the age a retired worker is eligible to collect 100% of their monthly payout, as determined by their birth year.
In 2021, the full retirement age will increase by two months to 66 years and 10 months for persons born in 1959. This will be the fifth consecutive year the full retirement age has increased by two months, but it marks only the 11th time since the Social Security Act was signed into law in August 1935 that the full retirement age has been changed.
Your full retirement age is like a line in the sand. If you begin taking your retirement benefits prior to reaching this line, your monthly payout is permanently reduced by up to 30%. By contrast, waiting to take your payout until after this line can pump up your monthly benefit.
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Early filers who are also working may be able to keep more of their income
Not all seniors receiving a Social Security retirement benefit leave the workforce. The idea of pocketing a wage or salary plus a monthly Social Security payout probably sounds fantastic, but the Social Security Administration (SSA) may penalize early filers (those who take their payout before reaching full retirement age) if they earn too much.
For instance, early filers who won’t reach their full retirement age in 2020 are only allowed to earn $18,240 for the year ($1,520 a month) before the SSA begins withholding some or all of their benefits. For every $2 in earnings above this threshold, $1 in benefits is withheld. Benefit withholding also applies to seniors who will hit full retirement age in a given year, but have yet to do so.
In 2021, early filers who won’t reach their full retirement age can earn up to $18,960 ($1,580 a month) before withholding kicks in. This should allow early filers to earn a bit more should they choose to continue working.
IMAGE SOURCE: GETTY IMAGES.
The rich get richer
The last big change is that we’ll see the wealthiest Social Security beneficiaries padding their pocketbooks.
Just as there’s a cap on the amount of earned income that’s subject to the payroll tax, there’s also a cap on monthly benefits paid at full retirement age. Whether you’ve averaged $200,000 annually over 35 years or $10 million over the same time frame, payouts are capped at $3,011 per month at full retirement age in 2020. Next year, the rich can get even richer, with the maximum monthly benefit at full retirement age increasing to $3,148.
If you’re wondering how you can achieve such a bountiful monthly benefit during retirement, know that you’ll need to work a least 35 years, hit or surpass the maximum taxable earnings cap in each of those 35 years, and wait until your full retirement age before taking your retirement benefit.
The $17,166 Social Security bonus most retirees completely overlook
If you’re like most Americans, you’re a few years (or more) behind on your retirement savings. But a handful of little-known “Social Security secrets” could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $17,166 more… each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we’re all after. Simply click here to discover how to learn more about these strategies.The Motley Fool has a disclosure policy.
United States history: WRITTEN BY: The Editors of Encyclopedia Britannica Title: squatter’s rights.
Preemption, also called Squatter’s Rights, in U.S. history, policy by which first settlers, or “squatters,” on public lands could purchase the property they had improved. Squatters who settled on and improved surveyed land were at risk that when the land was surveyed and put up for auction speculators would capture it. Frontier settlers seldom had much cash, and, because they held no title to their land, they even risked losing their homes and farms to claim jumpers prior to the government auction.
Squatters pressured Congress to allow them to acquire permanent title to their land without bidding at auction. Congress responded by passing a series of temporary preemption laws in the 1830s. Bitterly opposed by Eastern business interests who feared that easy access to land would drain their labour supply, the preemption laws also failed to satisfy the settlers seeking a permanent solution to their problems.
In 1841 Henry Clay devised a compromise by providing squatters the right to buy 160 acres of surveyed public land at a minimum price of $1.25 per acre before the land was sold at auction. Revenues from the preemption sales were to be distributed among the states to finance internal improvements.
The Pre-Emption Act of 1841 remained in effect for 50 years, although its revenue-distribution provision was scrapped in 1842. The law led to a great deal of corruption—nonletters acquired great tracts of land illegally—but it also led to the passage of the Homestead Act of 1862 by making preemption an accepted part of U.S. land policy. Get exclusive access to content from our 1768 First Edition.
Q: What are Opportunity Zones? A: Opportunity Zones are economically-distressed communities, designated by states and territories and certified by the U.S. Treasury Department, in which certain types of investments may be eligible for preferential tax treatment. The tax incentive is designed to spur economic development and job creation in distressed communities by providing these tax benefits to investors. Effective June 14, 2018, Treasury certified Opportunity Zones of all states, territories and the District of Columbia. Opportunity Zone designations certified by Treasury will remain in effect until December 31, 2028.
Opportunity Funds and Businesses
Q: What is an Opportunity Fund? A: A Qualified Opportunity Fund is any investment vehicle organized as a corporation or partnership with the specific purpose of investing in Opportunity Zone assets. The fund must hold at least 90% of its assets in qualifying Opportunity Zones property.
Q: Who can create an Opportunity Fund? A: Any taxpaying individual or entity can create an Opportunity Fund, through a self-certification process. A form (expected to be released in the summer of 2018) is submitted with the taxpayer’s federal income tax return for the taxable year.
Q: What can Opportunity Funds invest in? A: Opportunity Funds can invest in any Qualified Opportunity Zone property, including stocks, partnership interest or business property (so long as property use commences with the fund, or if the fund makes significant improvements to the qualifying property).
Q: Will Opportunity Zone businesses need to conduct most of their business within Opportunity Zone tracts, or will it be sufficient if the majority of the business’ assets are located in Opportunity Zone tracts (property, equipment, etc.)? For example, would a trucking business based in an Opportunity Zone, but serving a whole region, qualify for Opportunity Fund financing? A: To qualify as an eligible Opportunity Zone Business, a business must demonstrate that substantially all its tangible business property is located within a Qualified Opportunity Zone. No such stipulations have been made regarding the service area of the Opportunity Zone Business in the statute, but this may nonetheless be an item that the IRS chooses to address in future guidance or regulations.
Michaelgouldgroup.com
Q: What happens if a business located in an OZ moves? Is there a recapture risk? A: There is no recapture risk, but an opportunity fund that fails to meet the 90% asset requirement of the fund will be required to pay a penalty for each month it fails to meet the requirement. The penalty is not designed to be catastrophic, but rather, to ensure that funds stay within the zone’s parameters. Once an asset no longer qualifies, there will be a period of time in which the asset can be disposed of before incurring penalties.
Q: Can an Opportunity Fund make investments in multiple Opportunity Zones? A: Yes, so long as an Opportunity Fund has at least 90% of its assets in Qualified Opportunity Zone property, the fund may invest in as many qualified tracts as desired.
Q: Can an investor invest directly into an Opportunity Zone business to qualify for associated tax incentives? A: No, an investor must invest in an Opportunity Zone business through a Qualified Opportunity Fund in order to qualify for associated tax incentives.
Q: What tax benefits are available for investors that invest into an Opportunity Fund? A: There are primarily three benefits available to investors that invest previously realized capital gains into an Opportunity Fund, with increasing benefits the longer the investment is held in the Fund:
Deferral of capital gains taxes. An investor that re-invests capital gains (within six months of realizing the gains) into an Opportunity Fund can defer paying federal taxes on those realized gains until as late as December 31, 2026.
Reduction of capital gains taxes. Investors that hold the investment in the Opportunity Fund for at least five years can reduce their tax bill on the deferred capital gains by 10%. This reduction increases to 15% for investors that hold the investments in the Opportunity Fund for at least seven years.
Elimination of taxes on future gains. Investors that hold the investment in the Opportunity Fund for at least ten years will not be required to pay federal capital gains taxes on any gains realized from the investment in the Opportunity Fund.
Q: Can Opportunity Zones tax incentives be realized beyond 2026? A: The tax incentive itself does not expire in 2026. Investors in Opportunity Funds that hold investments for at least 10 years will still be able to take advantage of the favorable tax treatment of gains related to the investments into Opportunity Funds, even if realized after 2026.
Q: Are there minimum or maximum investments? A: There are no minimum or maximum investments required by Opportunity Zone legislation.
Q: What kind of returns are investors likely to expect? A: We anticipate a broad range of investor return expectations. On one end of the spectrum, Opportunity Funds may raise capital from socially responsible, high net worth investors that would otherwise be contributing to donor-advised funds with a principal preservation focus and a low return expectation (e.g., less than 5%). On the other end of the spectrum are private equity fund investors that are expecting double-digit returns based on the risk of providing equity capital to real estate or business investments. In the middle are preferred equity investment models with 6-10% annualized return expectations.
Q: Once an Opportunity Fund is established, is there a timeframe within which investments must be made? A: This timeframe will be determined in the IRS rule making process. Based on the legislation, an Opportunity Fund may need to have 90% of its capital invested in Opportunity Zone Property within the first six months of the taxable year of the Opportunity Fund. There may be some timing relief in the rule making to enable a 12-month investment window. Also, to receive the tax benefits, the investor must deploy their capital into an Opportunity Fund within six months of realizing the capital gain being invested.
Q: Do you anticipate the creation of single-use or single-purpose funds? For example, could a developer that does business in an Opportunity Zone create an Opportunity Fund for a specific project? A: Yes, given the expected ease of certifying an Opportunity Fund and the timing constraints of investing the capital in Opportunity Zone Property, we anticipate that single-asset funds will be utilized.
Q: Will Opportunity Zones be compatible with LIHTC and NMTC investments? A: As of today, we think Opportunity Zone investments could be combined with the Low Income Housing Tax Credit and New Markets Tax Credit, though we won’t know for sure until the Treasury Department releases its guidance.
The expiration of state eviction protections led to 433,700 additional coronavirus cases and 10,700 excess deaths from March to September, according to a new study.
“We expected there to be a relationship between moratoriums lifting and COVID-19 outcomes,” said Kathryn Leifheit, an epidemiologist who was a lead researcher on the study. “But the size of that difference and the number of deaths associated was larger than we expected.”
The study, in the process of being peer-reviewed, draws on data from the COVID-19 Eviction Moratoria and Housing Policy Database from Princeton University’s Eviction Lab and was authored by researchers from the University of California at Los Angeles, John Hopkins University, Wake Forest University, Boston University, and the University of California at San Francisco.
The CDC bans evictions in the United States through the end of the year due to the Coronavirus Pandemic. A March on Billionaire Landlords is seen in New York City. (STAR MAX File Photo: 8/20/20)
The pandemic could be exacerbated next year when the national moratorium on evictions from the Centers for Disease Control and Prevention lifts on January 1, according to Lefiheit.
“We’re on a course to be lifting protections nationwide during a time when COVID rates are soaring, with colder temperatures and people spending more time indoors,” Leifheit said. “In this context, effects on the spread of COVID could be stronger.”
Nearly 150,000 excess cases were preventable in Texas
Forty-three states and the District of Columbia instituted an eviction moratorium as early as March 13 and as late as April 30, but 27 lifted them during the seven-month study period. Seventeen states had moratoriums during the entire study period and served as a comparison group.
In Texas, the moratorium lift resulted in the largest number of excess cases and deaths in the U.S., the study found.
“Texas has the largest increase of cases and deaths in the study,” Leifheit said. “They lifted their moratorium fairly early on May 18 and our analysis found nearly 150,000 excess cases which were preventable and this resulted in 4,500 excess deaths in Texas alone.”
Detroit, Michigan, USA – August 20, 2014: An evicted house at a suburban street with left belongings on the lawns near the 8 mile road, in the city of Detroit.
Stats on average had 2.1 times higher incidence and 5.4 times higher mortality rates 16 or more weeks after lifting their moratoriums.
That’s due to a variety of factors, including evicted tenants using public transportation to visit social service agencies and scrambling to find shelter, often doubling up with other households, according to Eric Dunn, director of litigation at the National Housing Law Project, a nonprofit housing and legal advocacy center.
“We applaud the researchers who have empirically confirmed the connections between residential evictions and the increased transmission of COVID-19,” Dunn said. “Only with stable housing can renters and their families practice proper hygiene and social distancing.”
‘People call evictions the Scarlet E’
Housing activists erect a sign in front of Massachusetts Gov. Charlie Baker’s house, Wednesday, Oct. 14, 2020, in Swampscott, Mass. (AP Photo/Michael Dwyer)
An eviction record can make it harder for tenants to secure housing again during the pandemic even if they have the financial wherewithal.
“So many people call evictions the Scarlet E and future landlords can look whether you’ve been evicted and deny you housing,” Leifheit said. “Families will find themselves living in homes that are less safe and neighborhoods that are less healthy.”
Many renters also are employed in industries that are more vulnerable to exposure to the virus, doubling their risk of infection if they are evicted.
“I have personally provided legal assistance to essential workers who work in the retail and restaurant industries who were already facing eviction due to reduced hours or unemployment and were ultimately diagnosed as COVID-19 positive,” said Aisha Thomas, managing attorney at AJT Law Firm in Atlanta.
‘It is now more clear than ever we must extend the CDC order’
While Congress remains at a stalemate when it comes to another stimulus aid package to help struggling Americans, rental experts and health researchers alike say government action on evictions is needed soon to prevent even more Americans losing their homes in 2021.
“It is now more clear than ever that we must extend the CDC order banning evictions,” said Noelle Porter, NHLP’s director of government affairs. “NHLP and the National Low Income Housing Coalition have asked the current administration to extend their order for at least 90 days and it’s imperative that the Biden-Harris administration issue a more clear and broad moratorium.”
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