Stimulus Bill: Update from NADCO
A message from TMC President Barbara Morrison regarding those provisions in the 2009 stimulus bill signed by President Obama on February 17th, 2009 which affect SBA real estate lending programs:
Dear TMC Community,
We received an update today regarding the implementation of the stimulus bill provisions which affect SBA real estate financing. SBA has been given the authority to determine how these provisions will be employed but has not yet issued any particulars.
The update from NADCO (National Association of (Certified) Development Companies) explains that while SBA has begun discussions there are still no confirmed details to share at this time.
Excerpts from the NADCO President’s message dated 2/23/09:
“NADCO met with SBA officials on Friday to discuss their plans and process for creating Regulations/notices to provide the guidance that you need to process and service 504 loans.”
“By far, the question asked most often is: when do the two 504 fee offset items in the bill kick in for the benefit of our 504 borrowers? NADCO firmly believes that the following language is quite clear from Section 501(b) of the bill: “for which an application is approved or pending approval on or after the date of enactment of this Act.” However, the conclusion I draw from our meeting is that they are studying this language, and other bill provisions, and may issue a different interpretation on the timing of the fees offsets. It would seem the only two alternatives are: (1) they start with loan packages already in process, or submitted on or after 2/17/09, date the bill was signed by the President, or (2) they start on the date of issuance of new Regulations in the Federal Register. . . . Optimistically, it will be circa March 10th before we know what SBA has decided. It could possibly be additional weeks.”
“Yet another area of high interest, especially to many of your bank lenders, is how will the new first mortgage secondary market $3 billion in pool guarantees be implemented? NADCO has volunteered to work with major poolers (most of whom are locked out of the market today) to provide some suggestions to SBA on this process of allocating these guarantees.”
“Given the short timing window and substantial nature of this legislation, I think SBA may work to put forth regulations and procedures on a piecemeal basis as fast as they can in the coming days or weeks. That way, we can get the benefits flowing quicker to our borrowers.”
TMC is committed to informing you as soon as any changes are implemented, or answers regarding the issues raised above are made known. In the meantime please do not hesitate to contact me or any TMC staff with questions. Best regards, Barbara Morrison President TMC Development