CARES Act Economic Stabilization — COVID Relief for Large Businesses and Housing

When Congress passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) in March 2020, its headline provision — the $349 billion Paycheck Protection Program — overshadowed the equally significant $500 billion emergency stabilization fund that Title IV of the Act created for large businesses, airlines, and state and local governments. Codified at 15 U.S.C. §§ 9041–9058, the Economic Stabilization provisions gave the Treasury Secretary sweeping authority to make direct loans, loan guarantees, and equity investments to businesses "severely distressed" by COVID-19, with particular focus on the airline industry, which saw demand collapse by 95% within weeks of the pandemic's start. The same title also imposed executive compensation limits on any business receiving government aid, created two new oversight bodies (the Special Inspector General for Pandemic Recovery and the Congressional Oversight Commission), and enacted sweeping housing relief — a 120-day eviction moratorium, mortgage forbearance rights for federally backed loans, and what became a landmark $25 billion emergency rental assistance program. Together, these provisions represented the most significant federal intervention in private business and housing markets since the 2008 financial crisis.

Current Law (2026)

Legal Authority

• 15 U.S.C. § 9041 — Definitions: "air carrier" as defined in 49 U.S.C. § 40102; "coronavirus" as SARS-CoV-2; establishes the definitions applicable throughout the economic stabilization provisions
• 15 U.S.C. § 9042 — Emergency relief and taxpayer protections: the Treasury Secretary may make loans, loan guarantees, and other equity investments to eligible businesses, states, and municipalities; establishes the $500 billion Economic Stabilization Fund; requires that loans be at market rates and that the government receive equity, warrants, or senior debt instruments as compensation; directs the Fed to use its §13(3) emergency authority in conjunction with Treasury support (see Federal Reserve Monetary Policy for how that authority fits the broader Fed toolkit)
• 15 U.S.C. § 9043 — Executive compensation limitations: a condition of any CARES Act loan or guarantee is that the recipient must cap the compensation of any officer or employee earning more than $425,000 annually at 2019 levels for the duration of the loan period plus one year; bars golden parachute payments exceeding twice the employee's 2019 compensation; separately bars stock buybacks during the restricted period
• 15 U.S.C. § 9044 — Air service continuation: the Secretary of Transportation may require airlines receiving CARES Act payroll support to maintain service to communities they served before March 1, 2020; this provision was used to require airlines to maintain service to small and rural airports they would otherwise have abandoned during the pandemic
• 15 U.S.C. § 9046 — Aviation excise tax suspension: federal excise taxes on air transportation (ticket taxes, segment fees, international departure taxes) were suspended for the period March 28 – December 31, 2020, reducing the cost of air travel during the pandemic's initial phase
• 15 U.S.C. § 9053 — Special Inspector General for Pandemic Recovery (SIGPRO): creates a presidentially appointed, Senate-confirmed Special IG within the Treasury Department with authority to audit, investigate, and report on all CARES Act emergency spending; must submit quarterly reports to Congress; has subpoena power; funded with $25 million (see the Inspector General Act for the standing oversight framework SIGPRO was modeled on)
• 15 U.S.C. § 9054 — Conflicts of interest: no business in which the President, Vice President, any member of the President's Cabinet, any member of Congress, or their spouses, children, or sons/daughters-in-law hold a controlling interest may receive assistance under §9042; this provision specifically addressed public concern about Presidential business interests. See Presidential Powers and Executive Office for the broader framework of presidential authority
• 15 U.S.C. § 9055 — Congressional Oversight Commission: creates a five-member bipartisan commission — the Speaker appoints two members, the Senate Majority Leader one, the House Minority Leader one, and the Senate Minority Leader one — to oversee how the Treasury and Federal Reserve use the emergency lending authorities; the commission must report to Congress every 30 days
• 15 U.S.C. § 9056 — Foreclosure moratorium and forbearance: borrowers with federally backed mortgage loans (FHA, VA, USDA, Fannie Mae, Freddie Mac) who face COVID-related financial hardship may request forbearance for up to 180 days, renewable for another 180 days; during the forbearance period, servicers may not initiate or proceed with foreclosure
• 15 U.S.C. § 9057 — Multifamily forbearance: borrowers with federally backed multifamily mortgage loans may request 30-day forbearance (renewable up to 90 days total); during forbearance, landlords may not evict tenants, charge late fees, or impose other penalties
• 15 U.S.C. § 9058 — Eviction moratorium: for 120 days from March 27, 2020, landlords of covered dwellings (federally assisted housing, housing receiving federal financing) could not file eviction actions against tenants for nonpayment of rent
• 15 U.S.C. § 9058a — Emergency rental assistance: $25 billion appropriated for direct rental assistance to households affected by COVID-19, distributed through state and local grantees; prioritized households below 80% of area median income with a member unemployed or experiencing hardship; covered rent arrears, current rent, and utility costs

The Airline Stabilization Program

Airlines were the most visible recipients of CARES Act stabilization money — and also the most politically controversial. The $25 billion in Payroll Support Program grants went directly to passenger airlines as grants (not loans) on the condition that airlines maintain employment levels, not furlough workers, not cut pay, and continue service. Airlines received a second round of grants under the Consolidated Appropriations Act (December 2020) and a third round under the American Rescue Plan (March 2021), for a total of approximately $54 billion across the three programs.

In exchange for the grants, the government received warrants (options to purchase airline stock) at prices set at the time of the grants. Treasury ultimately sold these warrants for proceeds of approximately $1 billion — recouping a fraction of the grants but providing a measure of taxpayer participation in the eventual airline recovery.

The service continuation requirement under §9044 was used to protect dozens of small communities that would have lost air service entirely. Airlines were required to maintain "minimum service" — at least one daily flight — to every domestic point they served in March 2020, until March 2022.

The Housing Relief Framework

The CARES Act's housing provisions established several distinct protections that operated through different mechanisms:

Federally backed mortgage forbearance under §9056 was the most sweeping: any homeowner with a Fannie Mae, Freddie Mac, FHA, VA, or USDA mortgage could request forbearance simply by calling their servicer and claiming COVID-related hardship. No documentation was required. Servicers were prohibited from denying the request. The forbearance period could last up to 12 months (two 180-day periods). During forbearance, no payments were due, no fees could be charged, and foreclosure was barred.

The eviction moratorium under §9058 applied only to federally assisted housing — see Federal Eviction Protections for the longer-term framework. The CDC later issued a separate eviction moratorium purporting to cover all rental housing in the United States under its disease-control authority — a far broader reach that the Supreme Court struck down in Alabama Association of Realtors v. HHS (2021), holding that the CDC had exceeded its statutory authority.

Emergency rental assistance under §9058a — expanded significantly by the American Rescue Plan to a total of $46 billion — became the largest federal rental assistance program in U.S. history. States and localities distributed the money to landlords and tenants to cover pandemic-era rent arrears. Implementation was uneven; some states distributed money quickly and efficiently, while others were so slow that the Biden administration threatened to reallocate unused funds.

Oversight Architecture

Congress created two oversight bodies specifically for the CARES Act emergency spending:

The Special Inspector General for Pandemic Recovery (SIGPRO) operates within Treasury and has independent authority to audit, investigate, and report on all CARES Act and subsequent COVID relief spending. SIGPRO has issued quarterly reports and referred several investigations to the Department of Justice. As of 2026, SIGPRO continues to oversee pandemic loan forgiveness and program closeout.

The Congressional Oversight Commission issued monthly reports through 2021 on Treasury and Federal Reserve emergency lending, ultimately concluding that the facilities deployed capital selectively and that the conflicts-of-interest provision in §9054 was effective at excluding the most obviously conflicted businesses.

How It Affects You

State Variations

The federal CARES Act forbearance and eviction moratorium provisions applied uniformly to federally backed mortgages nationwide. Many states enacted their own eviction moratoria that extended beyond the federal protections. California, New York, New Jersey, Minnesota, and several other states maintained state-level eviction protections well into 2022 and beyond.

Pending Legislation

The CARES Act economic stabilization programs have largely wound down as of 2026. SIGPRO continues to investigate fraud and waste in COVID-era spending. No new major COVID relief legislation is pending. Several pandemic relief programs established by the CARES Act and its successor legislation remain in closeout or oversight phases.

Recent Developments

• COVID fraud prosecution wave ongoing — SBA OIG and DOJ coordinating at scale: Federal prosecutors across the country have charged hundreds of individuals and entities with CARES Act fraud — primarily PPP loan fraud and EIDL grant fraud — and prosecutions continue through 2025-2026. The SBA Inspector General's COVID-19 Fraud Enforcement Task Force has referred thousands of cases to DOJ; the total estimated fraud in COVID-era federal programs has been placed at $200–$400 billion across PPP, EIDL, unemployment insurance, and other relief programs — one of the largest fraud events in U.S. history. Statutes of limitations for some COVID fraud (5–10 years depending on the charge) mean prosecutions will continue well into the late 2020s.
• Treasury's Main Street Lending Program closed with minimal losses: The Main Street Lending Program — a $600 billion lending facility authorized under CARES Act § 4003 and operated through the Federal Reserve's emergency 13(3) authority — closed in January 2021 having made approximately $17.5 billion in loans. Most Main Street loans were to mid-sized businesses that did not qualify for PPP. As of 2024, loss rates on Main Street loans were significantly lower than projected during the crisis; Treasury and the Fed recovered the vast majority of the funds. This outcome contrasted with initial projections of substantial credit losses, reflecting both the speed of the economic recovery and the secured nature of the loans.
• Airlines used CARES Act payroll support grants and loans — clawback disputes: Airlines received approximately $50 billion in CARES Act payroll support — a mix of grants (not requiring repayment) and low-interest loans — contingent on maintaining employment and limiting executive compensation. Several airlines that received payroll support subsequently furloughed workers (after the initial prohibition period expired), generating controversy. The Treasury Department's warrants — which gave the government equity stakes in airlines that received CARES Act support — have been exercised or expired; Treasury received approximately $1.2 billion in warrant proceeds from airlines, partially offsetting grant costs.
• CARES Act eviction moratorium and forbearance — long-term housing market effects: The CARES Act's 120-day eviction moratorium and mortgage forbearance provisions (which allowed borrowers to pause payments without penalty) had lasting effects on housing markets through 2023-2024. An estimated 8 million homeowners entered forbearance at some point during the pandemic; the vast majority exited through loan modifications rather than foreclosure, keeping foreclosure rates at historic lows. Courts struck down CDC's extended eviction moratorium in Alabama Ass'n of Realtors v. HHS (2021), but the CARES Act's original moratorium had already largely wound down by then. The combination of forbearance exits, low mortgage rates, and limited housing supply contributed to the post-pandemic housing price surge.