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The 2021 Stimulus Bill & Real Estate Investors: What You Should Know

By: Dave Meyer March 12, 2021

On Wednesday, March 10, the House of Representatives passed the $1.9 trillion America Rescue Plan, and President Biden signed the bill into law on Thursday, March 11. The massive bill provides support in several categories ranging from rent and housing to education and public health.

Any large injection of money into the economy will directly impact the economic recovery. To help real estate investors understand the implications of this stimulus bill, we’re breaking down the key provisions—and analyzing the key takeaways every real estate investor should know.

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Key provisions in the America Rescue Plan

Direct assistance to qualifying Americans

The headline of the stimulus package is a third direct payment to qualifying Americans. There are new restrictions on who qualifies for the package, such as a strict income cap. As a result, eligibility is a bit confusing. CNET built a helpful calculator where you can see what amount you can expect to receive.

The bill also extends the $300-per-week unemployment benefits through September 6th and expands the child tax credit to $3,600 for children five or younger and $3,000 for those between six and 17 years old.

Rental and housing assistance

The stimulus bill allots more than $40 billion to various rental and housing assistance programs, including:

  • $21.55 billion in rental assistance

  • $5 billion in emergency housing vouchers

  • $5 billion in vouchers to help those experiencing homelessness

  • $4.5 billion to assist low-income families with heating and utilities

  • $750 million for tribal housing

  • $100 million for rural housing

  • $100 million for housing counseling.

When combined with the stimulus passed in December, this level of support approaches the cumulative back-rent owed by renters nationwide, according to Moody’s Analytics. However, their analysis is backward-looking and doesn’t assess the future needs of struggling renters.

The bill also provisions just under $10 billion to a homeowner’s assistance fund designed to “mitigate financial hardships associated with the coronavirus pandemic.” This provision includes assistance for:

  • Mortgage payments

  • Utility payments

  • Insurance costs

  • Homeowner fees.

The eligibility will not likely cover any sort of investment properties except for house hacks. The bill specifically states that owner-occupied dwellings with up to four units are eligible for assistance. So if you’re a house-hacker needing financial assistance due to pandemic-induced hardships, you might quality for assistance.

Notably, the eviction and foreclosure moratoriums are not included in the America Rescue Plan.

Business assistance

The bill provides an additional $7.25 billion in funds to the Paycheck Protection Program (PPP). The new Restaurant Revitalization Fund offers nearly $29 billion in assistance to food and beverage businesses, which have been hit particularly hard during the pandemic.

Other assistance

Other allocations outlined in the massive spending bill include:

  • $160 billion for a national vaccine program

  • More than $350 billion to state and local governments to help compensate for lost tax revenue due to the pandemic

  • $130 billion to educational institutions to prioritize getting schools reopened.

What this means for real estate investors

The massive spending bill will have large implications for the national economy for years to come—and many of those implications are yet to be understood. There are, however, three key takeaways real estate investors should keep in mind.

Renter assistance

The combination of direct payments and rental assistance should help the estimated 10 million renters who are behind on payments get current on their back rent. In turn, property owners who have lost income due to rent shortfalls should see some relief.

The big question is how quickly the assistance can be distributed. Reports show that large delays might be slowing down relief.

Keeping the housing market hot

The housing market is unlikely to cool off in the short term. This package is meant to stimulate economic activity, and will most likely do just that. Combined with mortgage rates at near-historic lows, this fresh injection of money will likely help the housing market remain strong.

There are two things to watch:

  1. Low inventory. This is a major factor in the rapid rise of home prices over the last few years. In 2020, housing inventory declined nearly 40%! This decline is likely caused by the simple fact that people do not want to sell their homes and move during a pandemic. If coronavirus cases continue to decline with the vaccine rollout, inventory may increase in time for the busy summer selling season. A rapid increase in inventory could cool off the market substantially.

  2. Bond yield recovery. Bond yields have recovered from their January lows. These have a large impact on mortgage rates—when yields rise, so do mortgage rates. Mortgage rates have risen modestly over the last several weeks. If this continues, it could put downward pressure on prices in the housing market. This isn’t necessarily a bad thing! The housing market is red-hot, and a relative cooling might return the market to more sustainable levels.


In the last year, we’ve become accustomed to trillion-dollar stimulus bills. However, spending increases of this size are rare. Large increases in the monetary supply makes inflation more likely. It’s likely that the increased probability of inflation has caused the recent bond yield growth—but that shouldn’t necessarily be a cause for concern. Inflation is natural. The federal government actually targets 2% annual inflation. There is not yet any sign that inflation beyond that 2% target is on the horizon. But even if greater inflation arrives, real estate is generally seen as an excellent hedge against inflation.

Only time will tell the long-term implications of such a massive spending bill. In the short-term, the bill will likely provide relief to Americans suffering economic pressure—and further fuel a more sustainable economic recovery not reliant on government stimulus.

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