House Passes Bill to Expand Loan Forgiveness Provisions of PPP Loans


By an overwhelming vote of 417-1, the House on May 28 approved legislation that would liberalize rules under the Paycheck Protection Program (PPP) to give business owners more time to have the loans forgiven by the U.S. government.

Under the PPP loan program, which passed Congress earlier this spring as part of the CARES Act, small businesses with fewer than 500 employees can take out loans equal to 2.5 times their average monthly payroll from 2019 with the total capped at $10 million. For many businesses that meet key conditions on the use of these funds, the loans may be forgiven.

The bill approved by the House, called the Paycheck Protection Program Flexibility Act, would make it easier for small businesses to utilize funds under the PPP and still qualify for loan forgiveness. Specifically, the House bill would:

  • Increase the timeline for businesses to spend their loan money on payroll in order for it to be forgiven from the current eight-week deadline to 24 weeks;
  • Extend the June 30 rehiring deadline for laid-off employees to Dec. 31;
  • Reduce the requirement that 75% of loan money must be spent on payroll in order for the loan to be forgiven to 60%; and
  • Provide more leeway on loan forgiveness for employers if they show they were unable to rehire employees or reopen to business in a way that complies with safety standards.

The Senate is working on its own version. Sen. Marco Rubio (R-Fla.), who chairs the Senate Committee on Small Business and Entrepreneurship, is seeking to extend the eight-week rehiring deadline to 16 weeks instead of the 24 weeks in the House bill. Rubio tweeted that the House bill is “good,” but expressed concerns that some provisions of the legislation could lead to “unintended consequences.”

NAHB continues to urge Congress to ensure the PPP guidelines align with congressional intent to allow more workers in the residential construction sector to access the loan program. Specifically, NAHB is urging Congress to provide a waiver from eligibility restrictions in the existing Small Business Administration 7(a) loan program to allow single-family and multifamily home builders, land developers, multifamily property owners and 501(c)(6) organizations access to the PPP.

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