Summary: Federal Response to COVID-19 April 8, 2020

Updated: April 29

On Friday April 24, the President signed into law a fourth piece of legislation in response to COVID-19 – the Paycheck Protection Program and Healthcare Enhancement Act.

This law provides $484 billion in emergency appropriations to replenish funds for the Small Business Administration’s (SBA) Paycheck Protection Program (P3) and Economic Injury Disaster Loans; to provide additional support to hospitals; and to expand and improve COVID-19 testing.

Specifically, for the SBA it includes:

  • $310 billion in new funds for the P3 and its forgivable loans to small businesses and nonprofits
    • $30 billion of which is reserved for banks with $10-$50 billion in total assets
    • $30 billion of which is reserved for “community financial institutions” with less than $10 billion in assets, including CDFIs authorized to make PPP loans
  • $50 billion in new funds for the EIDL program
  • $10 billion in new funds for EIDL cash-advance grants of $10,000
  • Increased funding for the SBA to administer the P3 and EIDL programs

And for the Department of Health and Human Services (HHS), it includes:

  • $75 billion in additional funds for hospitals to respond to COVID-19
  • $25 billion in new funds for a range of initiatives for and better COVID-19 testing
    • $11 billion of which is for states, localities and tribal governments
    • $600 million of which is for Federal Qualified Heath Centers (FQHCs)
    • $225 million of which is for rural health clinics

Additionally, the Federal Reserve has clarified that nonprofits are, in fact, eligible for its Main Street Lending program designed for organizations wit 500-10,000 employees. Under the initial guidance, nonprofits were not sure if that was the case. Under the Main Street Lending Program, the Federal Reserve will purchase a 95 percent share of loans to larger nonprofits,  according to their term sheets and if they apply through a participating bank. More information and term sheets here.

If you would like to email your Member of Congress to support the CDFI Industry’s request for an emergency appropriation to the CDFI Fund, you can do so here.  We expect that this proposal will be considered when Congress reconvenes in May.

Original Post: April 8

Over the past month, Congress and the Administration have taken a kitchen-sink approach in responding to COVID-19, with the goal of both shoring up the nation’s public health response to this pandemic as well as of providing a backstop to the economy as it comes to a near halt while the country takes action to limit community spread of the coronavirus.

Below are highlights from the three laws that passed in March.  A fourth legislative package is being discussed for when Congress returns in late April, and it is expected that this next round of proposals will be more focused on true stimulus measures that can boost the economy over the long run, such as for investments in community infrastructure that includes funds for CDFIs.


Coronavirus Preparedness and Response Supplemental Appropriations Act

Enacted on March 6th, this law provides $8.3 billion in emergency appropriations to help respond to COVID-19, including new public health funding; research and development of vaccines; medical supplies and surge capacity; and loans to small businesses.

Two items of special interest here are: (1) $100 million for Federally Qualified Health Centers; and (2) additional funds for the SBA to support an estimated $7 billion in disaster loans of up to $2 million, for which nonprofits will also be eligible.

The $100 million for FQHCs was officially awarded on March 24 with each FQHC receiving a minimum of $50,000, with additional funds available based on the number of insured and uninsured patients served ($.50 versus $2.50) to a maximum of about $300,000.

These funds can be used for COVID-19 response, including for testing and screening, personal protective equipment and other supplies, and to test telehealth capacity.

FQHCs have until 11:59 PM on April 23rd to accept these grants and file the necessary paperwork.  HHS is sponsoring two webinars for grantees on Wednesday, April 8th and on Friday, April 17th, both at 2:00 to 3:00 PM ET.  More information is available here.

With respect to the SBA disaster loans, these loans – which aren’t typically available to nonprofits – provide working capital of up to $2 million to make up for revenue lost due to the COVID-19 disaster declarations.  The nonprofit rate for these Economic Injury Disaster Loans (EIDL) is 2.75%, and terms are negotiated on a case-by-case basis and can be for 30 years. More information about the SBA programs available to nonprofits is summarized by IFF here.

Final summary from GovTrack


Families First Coronavirus Response Act

Enacted on March 18th, this law ensures access to free testing for COVID-19; expands family and medical leave and paid leave for small businesses; enhances unemployment benefits; provides over $1 billion and increased flexibility for food and nutrition programs; and temporarily increases the federal share of Medicaid by 6.2% to keep states from cutting benefits during this crisis.

It’s worth noting that $400 million from this law will go to support food banks to meet the increased demand for their services (The Emergency Food Assistance Program), and also that the school lunch program and SNAP will benefit from new flexibility that allows them to continue to provide benefits despite school closures and the inability of SNAP recipients to meet any work or worker training requirements during the crisis. Learn more about USDA’s actions in this area here.

Final summary from GovTrack


Coronavirus Aid, Relief, and Economic Security Act

Enacted on March 27th, this is the most consequential of the new laws passed.  It’s a $2 trillion bill that includes: immediate direct payments to individuals; new and expanded pandemic unemployment insurance benefits; $500 billion for the Federal Reserve to lend and help backstop larger businesses, states, and municipalities; a $349 billion SBA program of forgivable loans and enhancements to existing SBA disaster loans; a temporary moratorium on evictions and forbearance of loan payments on multi-family properties with federally-backed loans; miscellaneous individual and business tax provisions; and another $340 billion in emergency funding – mostly targeted to states – for COVID-19 response, including:

  • $8.8 billion in child nutrition programs;
  • $15.1 billion to further support new SNAP benefits and flexibility;
  • Another $450 in emergency food assistance, including for food banks;
  • $1.32 billion for community health centers (and an extension of their mandatory spending through November);
  • $3.5 billion for the Child Care Development Block Grant;
  • $750 million for Head Start providers;
  • $955 million for the Administration of Community Living (seniors and people with disabilities);
  • $13.5 billion to states for K-12 education;
  • $5 billion for Community Development Block Grants;
  • $4 billion for Homeless Emergency Solutions Grants;
  • $1.25 billion for Tenant-Based Rental Assistance/Housing Choice Vouchers;
  • $1 billion for Project-Based Rental Assistance; and
  • Smaller amounts for supportive housing, behavioral health and substance abuse, and even state arts agencies.

This may sound like a lot of funding – and it is. But few believe that even this unprecedented amount of emergency spending will begin to cover the costs associated with the fallout from COVID-19.  Instead, these new funds are primarily intended to provide surge funding to help with the immediate response to the COVID-19 health emergency or to help stem the sudden loss of revenue and potential liquidity crunch faced by state and local governments, businesses, and nonprofits due to the stay-at-home orders and other social distancing efforts now in force across most of the country to reduce the spread of this dangerous new disease.

You can learn more about the new federal spending provisions in the CARES Act here.

Final summary from GovTrack