Private Lending & Conventional Mortgage Advice

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Landlords don't need the SBA for the crisis they need Section 8

Posted Mar 31 2020, 16:25

Someone needs to call the White House and each Governors Office and stop this SBA insanity.

Landlords don't need "Loans" they need payment vouchers.  

Housing and Urban Development is the correct way to manage the rental issue.

This is the correct and efficient way to manage this at the Federal/State level.

This is as simple as it has to be.

Landlords register their properties from their Schedule E from their 1040 with Section 8 online.  

Tenants who have been approved for unemployment are automatically authorized Section 8 vouchers with online verification

At the end of the year landlords will receive a 1099-MISC for each property for the amount of rent received which is totally subject to depreciation.

At the end of the year tenants will receive a 1099-MISC for the amount of rent paid on their behalf and subject to their tax bracket.

This can all be set up online, is totally verifiable, and efficient.

When you no longer qualify for unemployment, you lose your section 8 and landlords only qualify for rentals that have unemployed tenants and not those with the ability to pay.

Again this can all be done online and is simple for both the Landlord and Tenant to understand.

It is also the correct way to do it by the Internal Revenue Code.

This SBA Loan program is a complete sham and is being run by the BANKS under guise of the DEPT OF TREASURY.

I would get a lawyer opinion before I would do this, because not only are you going to go bankrupt you are going to wind up dealing with the bank secrecy act and treasury regulations in addition to the IRC.

WARNING LANDLORDS YOU ARE PLAYING WITH FIRE IF YOU GO THIS ROUTE.  This is the worst way to do this.

You have to ask yourself why didn't congress or the executive branch think of doing it this way?

I will tell you why.  BANKS.

This is a way to run more money through the Federal Reserve and the Banking System.

This SBA sham is a way to bail out the banks and have Landlords on the hook.

I am totally confused as to why the Department of Housing and Urban Development isn't all over this.

I believe this isn't going to be what landlords think it is.

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Fred Shatzoff
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Fred Shatzoff
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Replied Mar 31 2020, 16:39

Sba is for businesses has nothing to do with mortgages. Business are in trouble and need money.  Are you against helping businesses. 

If you are looking for mortgage help call your lender. 

You can not change the bill that was passed.  If you don't like contact your senator or congressman 

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Replied Mar 31 2020, 16:42

From reading the SBA forum no one knows what is going on.

You are expecting banks to understand something that Housing and Urban Development have been doing efficiently (relatively  speaking) for years. 

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Thomas Klein
  • Pompano Beach, FL
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Thomas Klein
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Replied Mar 31 2020, 16:43

Thank you Sam Cherry!!

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Account Closed
  • Rental Property Investor
  • Oakland, CA
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Account Closed
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Replied Mar 31 2020, 16:45

@Sam Cherry amen brotha!

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Replied Mar 31 2020, 16:50

I am not against businesses I am for the correct department managing this according to the Constitution.  I am warning you after seeing this many times with "hurricane relief" through the SBA.  It isn't what you think it is.

Section 8 is easy to understand.  

No need to pass the bill to see whats in it as a certain politician said.

This "relief" was written by a bank lobbyist, I can guarantee it. 

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Replied Mar 31 2020, 16:57

Prediction:  In one year there will be forum on BP talking about the SBA help that wasn't.

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Replied Mar 31 2020, 17:14

Secretary Mnuchin has been talking about the SBA solution for a week and no one has seen the guidelines yet.

Section 8 is so easy compared to the SBA "solution" that a caveman could explain it (sorry GEICO)

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Shaun Weekes
  • Loan Officer / Processor / Life & Health Agent
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Shaun Weekes
  • Loan Officer / Processor / Life & Health Agent
  • Rancho Cucamonga, CA
Replied Mar 31 2020, 17:20
Originally posted by @Sam Cherry:

Someone needs to call the White House and each Governors Office and stop this SBA insanity.

Landlords don't need "Loans" they need payment vouchers.  

Housing and Urban Development is the correct way to manage the rental issue.

This is the correct and efficient way to manage this at the Federal/State level.

This is as simple as it has to be.

Landlords register their properties from their Schedule E from their 1040 with Section 8 online.  

Tenants who have been approved for unemployment are automatically authorized Section 8 vouchers with online verification

At the end of the year landlords will receive a 1099-MISC for each property for the amount of rent received which is totally subject to depreciation.

At the end of the year tenants will receive a 1099-MISC for the amount of rent paid on their behalf and subject to their tax bracket.

This can all be set up online, is totally verifiable, and efficient.

When you no longer qualify for unemployment, you lose your section 8 and landlords only qualify for rentals that have unemployed tenants and not those with the ability to pay.

Again this can all be done online and is simple for both the Landlord and Tenant to understand.

It is also the correct way to do it by the Internal Revenue Code.

This SBA Loan program is a complete sham and is being run by the BANKS under guise of the DEPT OF TREASURY.

I would get a lawyer opinion before I would do this, because not only are you going to go bankrupt you are going to wind up dealing with the bank secrecy act and treasury regulations in addition to the IRC.

WARNING LANDLORDS YOU ARE PLAYING WITH FIRE IF YOU GO THIS ROUTE.  This is the worst way to do this.

You have to ask yourself why didn't congress or the executive branch think of doing it this way?

I will tell you why.  BANKS.

This is a way to run more money through the Federal Reserve and the Banking System.

This SBA sham is a way to bail out the banks and have Landlords on the hook.

I am totally confused as to why the Department of Housing and Urban Development isn't all over this.

I believe this isn't going to be what landlords think it is.

I'm a section 8 landlord so reading this makes sense except for the budget that HUD can throw out to section 8 tenants. Plus in some states the waiting list is years long so what happens to the people that have been waiting? They just can't be by passed.

 I guess they could implement some type of emergency funding but there's also shortage of homes that are designated for section 8 renters.

 I'm not sure how that would workout from a legal perspective but I certainly think you're on to something here.  

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Replied Mar 31 2020, 17:21

You are missing the point.  All it takes is congress to increase their budge an poof its done.  

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Replied Mar 31 2020, 17:26

It is much easier to modify an existing program being run by the correct federal department than to run a program thru the bank.  

Yes, I am not talking about the "normal" rules for section 8 qualification of property or tenants.

Yes, this is an emergency but it can be set up to be run online with very little effort.

This would run parallel to the current section 8 program.

You would only have people qualified for a few months while they are unemployed.

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Vince Padalino
  • Investor
  • trenton, NJ
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Vince Padalino
  • Investor
  • trenton, NJ
Replied Mar 31 2020, 17:38

@Shaun Weekes so how can we. Get this done

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Replied Mar 31 2020, 18:00

Do we ask the Department of Defense to run programs for the Department of Education? No.

Then why is the SBA(Department of Treasury) running a program for Housing and Urban Development?

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Shaun Weekes
  • Loan Officer / Processor / Life & Health Agent
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Shaun Weekes
  • Loan Officer / Processor / Life & Health Agent
  • Rancho Cucamonga, CA
Replied Mar 31 2020, 18:08
Originally posted by @Sam Cherry:

It is much easier to modify an existing program being run by the correct federal department than to run a program thru the bank.  

Yes, I am not talking about the "normal" rules for section 8 qualification of property or tenants.

Yes, this is an emergency but it can be set up to be run online with very little effort.

This would run parallel to the current section 8 program.

You would only have people qualified for a few months while they are unemployed.

Because I love this idea so much, I think we should all contact our local representative in the Senate. I think we should explain the basics that you brought up Sam.

  • Aid should be flowed through HUD as this is the appropriate government branch
  • A " Section 8" style package designed to help workers who have been affected by this virus
  • Something that is temporary and will end when the worker gets back on their feet via their old job or a new one

I don't want to steal your thunder so why don't you write something up that we can all send in uniform. Messages are always stronger when you have a united front sending them out!

There must be 10's of thousands of landlords on BP that could copy and paste the message we/you finalize and then we could pick a day to send the message out one time as a united front.

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Replied Mar 31 2020, 18:13

Please help me get the word out and send this to every person you know on BP.  That is what BP is for.

The wrong department is running the "solution"

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Vince Padalino
  • Investor
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Vince Padalino
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Replied Mar 31 2020, 18:48

@Sam Cherry

Makes a lot of sense

Let’s do it before it’s to late I think this would help the industry and would better manage everyone’s situation

Can’t hurt to try

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Shaun Weekes
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Shaun Weekes
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Replied Mar 31 2020, 19:02
Originally posted by @Sam Cherry:

Please help me get the word out and send this to every person you know on BP.  That is what BP is for.

The wrong department is running the "solution"

 Ok, I'll write something up tonight and post it on here and if we all like it we can copy and paste it and go from there.

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Replied Mar 31 2020, 19:15

I am already seeing people ask questions that are showing the SBA "solution" is a pretext to fraud.  Although fraud can be done in section eight this is a two part process.  The tenant must qualify for unemployment and you can only use verifiable property that is on your Schedule E.  Both are easily verifiable and a robotic process can be written by a programmer to verify without human intervention.

Again the wrong department with the wrong solution is be applied to wrong problem.  

The solution is total accountability and visibility for both landlord and tenant.

The only reason for the SBA solution is to make BANKS rich at our expense while paying lip service to the problem.

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David H.
  • Rental Property Investor
  • Portland, ME
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David H.
  • Rental Property Investor
  • Portland, ME
Replied Mar 31 2020, 19:20

Hi Sam, 

I think you are mixing up the two SBA loan programs available right now.

The PPP loan program for payroll is administered by banks who will likely make money, yes. But as a banker working on this program, I can tell you we are not happy and struggling to make structure an entire program and remain in compliance over night. 


The EIDL Loan which I shared on this forum is funded directly by the SBA, NO BANKS are involved with the EIDL.

The EIDL loan program right now offers a $10k grant that does not need to be paid back as well. So your advice right now is to forgo a free $10k in the hopes of pressuring Congress to invent a new program through HUD?


Also, the EIDL loans are DISASTER LOANS, which this is, and are historically for businesses affected by hurricanes. This is a unique situation where many landlords will need help with working capital as their tenants fail to pay rent. It is an option that is being presented that is real. Unless you have a real concrete option that is available today, I wouldn't knock it.

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Replied Mar 31 2020, 19:57

Okay, I understand so you fill out a LOAN application for a Grant?

I am not trying to knock anything, but the wrong solution is being applied for.

If you get 10K then fine, but if you need more then you will get a loan which means you will pay it back.

With section 8 you receive what you need based off of the tenant.  And can run as long as needed for as many tenants as needed.

I will monitor your post and see how many people get 10k grants and how many are told it is a loan instead of a grant.

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David H.
  • Rental Property Investor
  • Portland, ME
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David H.
  • Rental Property Investor
  • Portland, ME
Replied Mar 31 2020, 20:27
Originally posted by @Sam Cherry:

Okay, I understand so you fill out a LOAN application for a Grant?

I am not trying to knock anything, but the wrong solution is being applied for.

If you get 10K then fine, but if you need more then you will get a loan which means you will pay it back.

With section 8 you receive what you need based off of the tenant.  And can run as long as needed for as many tenants as needed.

I will monitor your post and see how many people get 10k grants and how many are told it is a loan instead of a grant

Hi Sam, the SBA has made it clear that you do not need to accept the loan terms. They have also made it clear that even if you do not get approved for the loan you get to get the advance grant as long as you are an eligible business.I'm not saying this is the best solution out there or that people should take on loans. But right now in times like this its good to have options to low interest long amortization debt. People will need money as rents and reserves dry up. We can sit here and wish the government through HUD did more. Until then I'm going to share options for people to consider that exist.

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David H.
  • Rental Property Investor
  • Portland, ME
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David H.
  • Rental Property Investor
  • Portland, ME
Replied Mar 31 2020, 20:33
Originally posted by @Sam Cherry:

Do we ask the Department of Defense to run programs for the Department of Education? No.

Then why is the SBA(Department of Treasury) running a program for Housing and Urban Development?

Also, the eligibilty of rental property owners is a small sub- component of the EIDL Loan. EIDL Loans from the SBA will primarily be made to small businesses. This is not a housing loan. Rental Property owners in standard SBA 7a programs are not eligible.

The reason rental property owners are eligible is because disaster loan programs are run through the SBA for small businesses and home owners in crisis like hurricanes and economic crisis.

I actually agree with you that it is stupid to have SBA solving HUDs or FEMAS problems. But we have to work with what we have. Yes it is not ideal, and I am happy and would greatly welcome better assistance. Until then..

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Shaun Weekes
  • Loan Officer / Processor / Life & Health Agent
  • Rancho Cucamonga, CA
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Shaun Weekes
  • Loan Officer / Processor / Life & Health Agent
  • Rancho Cucamonga, CA
Replied Mar 31 2020, 20:37
Originally posted by @David Hulit:

Hi Sam, 

I think you are mixing up the two SBA loan programs available right now.

The PPP loan program for payroll is administered by banks who will likely make money, yes. But as a banker working on this program, I can tell you we are not happy and struggling to make structure an entire program and remain in compliance over night. 


The EIDL Loan which I shared on this forum is funded directly by the SBA, NO BANKS are involved with the EIDL.

The EIDL loan program right now offers a $10k grant that does not need to be paid back as well. So your advice right now is to forgo a free $10k in the hopes of pressuring Congress to invent a new program through HUD?


Also, the EIDL loans are DISASTER LOANS, which this is, and are historically for businesses affected by hurricanes. This is a unique situation where many landlords will need help with working capital as their tenants fail to pay rent. It is an option that is being presented that is real. Unless you have a real concrete option that is available today, I wouldn't knock it.

This is great information. When the 10k runs out are you allowed to re-apply for another grant under any circumstance? What options do landlords/tenants have when that 10K runs out? I'm trying to adsorb as much as possible on this issue so that I can speak on it intelligently. I think tomorrow will be an all-day class on this so I can get up to speed.

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David H.
  • Rental Property Investor
  • Portland, ME
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David H.
  • Rental Property Investor
  • Portland, ME
Replied Mar 31 2020, 20:42

@Shaun Weekes

Hi Shaun,

I don’t believe you can receive the grant more than once.

I’m heading to bed now so I can’t really answer anything more in detail.

My suggestion would be to google search SBA EIDL Loan program webinar. There is a lot of good information out there from the SBA and other partners like the US chamber of commerce and senate committees etc.

Also, daily the SBA in New Hampshire hosts a call at 9am and 2pm EST for free and you can ask questions at the end. I’m sure other states do this to. I’d search the state district site to find these. It’s where I get most my up to date info.

Best of luck!

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Shaun Weekes
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Shaun Weekes
  • Loan Officer / Processor / Life & Health Agent
  • Rancho Cucamonga, CA
Replied Mar 31 2020, 20:45
Originally posted by @David Hulit:

@Shaun Weekes

Hi Shaun,

I don’t believe you can receive the grant more than once.

I’m heading to bed now so I can’t really answer anything more in detail.

My suggestion would be to google search SBA EIDL Loan program webinar. There is a lot of good information out there from the SBA and other partners like the US chamber of commerce and senate committees etc.

Also, daily the SBA in New Hampshire hosts a call at 9am and 2pm EST for free and you can ask questions at the end. I’m sure other states do this to. I’d search the state district site to find these. It’s where I get most my up to date info.

Best of luck!

 Understood and thank you.  

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Replied Mar 31 2020, 21:02

I'm interested in seeing how this all turns out. I filled out the SBA loan form but am very skeptical due to the sheer numbers of people involved.