Like most real estate investment firms, Kushner Companies stands to be badly stung by the economic fallout of coronavirus, though the provisions in the recovery bill are generous to the holders of federal mortgages on low- and moderate-income apartment buildings, and expected to be widely used by them.

“This will be a national issue and virtually everybody will be affected. Not just low-income or moderate-income, even at the high end of the market … So yes, Kushner’s properties are going to have a problem,” Narasimhan said.

In addition to large investors, the recovery bill also provided relief for individual homeowners whose mortgages are backed by federal lending giants Fannie Mae and Freddie Mac. There is no similar blanket relief for renters, who are also the most likely people to lose their jobs during the crisis. But real estate companies that take advantage of the option to temporarily stop paying their mortgages must also agree to certain protections for renters in their buildings, including agreeing to not evict them during that time. Building owners can go into forbearance for up to 90 days and catch up on the missed payments later, though that time-period could be extended if the economic crisis deepens.

The rules can help stabilize the market and ensure building owners don’t face foreclosure if renters stop paying, said Luise Barrack, managing partner at the New York real estate law firm Rosenberg and Estis P.C.

“What this is trying to accomplish is to backstop” the real estate industry, Barrack said.

Like most real estate investment firms, Kushner Companies stands to be badly stung by the economic fallout of coronavirus. | Drew Angerer/Getty Images

But the option to freeze mortgage payments highlights how members of the Trump family who have not divested from their businesses will be financially entangled in the government’s trillion-dollar economic recovery efforts. Those entanglements persist despite an eleventh-hour push last week from Democrats in Congress to place a restriction in the bill barring Trump family members from receiving aid.

The restriction applies only to a $500 billion loan program that will be administered by the federal government, and not to the mortgage programs that could be utilized by the Kushner family.

There are several other provisions of the bill that could still provide valuable aid to members of the Trump family in the months ahead, including a $350 billion loan program for small businesses for which Trump hotels and hotels operated by the Kushner family could potentially be eligible, and a tax provision that allows real estate owners to use their losses to offset gains in other investments such as the stock market, as reported by The New York Times.

It’s also not clear whether Kushner Companies would be disqualified from the $500 billion in recovery loans, despite Jared’s part ownership in the firm, real estate and ethics experts told POLITICO. The provision barring companies with family members in the upper rings of government from recovery loans applies only when those members hold an ownership stake of at least 20 percent. Kushner’s percentage ownership in his family’s company is unknown, but in real estate, where companies require large amounts of capital, it’s common to have outside investors and for individuals to own less than a 20 percent stake.

“The ban for the Trump family only applies to one part of that bill,” said Jennifer Ahearn, policy director at the watchdog group Citizens for Responsibility and Ethics in Washington. “And there are questions about how Kushner's interests are structured in his businesses. We don’t have visibility into his interests.”

When he took his role in the White House, Kushner sold and divested from a number of investments, including his ownership of individual stocks and his stake in 666 Fifth Avenue, his company’s premier property. He also resigned from his role as CEO his company and pledged to recuse himself from government business that would directly affect his remaining assets.

But he kept a stake in more than 150 real estate-related investments, financial disclosures covering 2018 show, including many apartment buildings. Kushner’s financial disclosures for 2019, when Kushner Companies took out the $800 million loan, have not yet been released by the White House. Overall, Kushner had a net worth of $324 million at the end of 2016, with the vast majority of his wealth in real estate holdings, according to documents obtained by The New York Times.

A view of the Kushner Companies' flagship property 666 Fifth Avenue in New York City. | Drew Angerer/Getty Images

The company’s housing portfolio includes some upscale one-bedroom apartments in New York City’s East Village that rent for more than $3,000 a month, its website shows, but the bulk of its apartment units are middle-of-the-market rentals in Ohio, Pennsylvania, Maryland and other states with many rents starting at less than $900 a unit.

In recent years, Kushner Companies has landed several major deals for rental units, the largest of which was completed in 2019 when the firm bought more than 6,000 apartment units at 16 different sites in Maryland and Virginia for $1.1 billion, using a $800 million loan backed by federal mortgage giant Freddie Mac.

The $800 million loan concerned Sens. Elizabeth Warren (D-Mass.) and and Tom Carper (D-Del.), who wrote a letter to the federal mortgage company Freddie Mac asking for more information.

"While there is presently no specific indication of any wrongdoing by Freddie in this matter, the fact pattern in this case - of Kushner Companies receiving its largest loan in a decade, Mr. Kushner's refusal to fully and clearly divest from his former company, and the Kushner Companies' recent history of engaging in transactions that appear to raise conflicts of interest for Mr. Kushner — raise significant questions about the circumstances under which Freddie approved and Kushner Companies received this loan,” the senators wrote.

Kushner Companies has received other federally backed loans in the past. A 2012 purchase of units with other investors in Maryland was completed with the help of $371 million in loans from Freddie Mac, but the company’s total federally backed loan volume isn’t clear, nor is the share of those loans that have been repaid. Kushner Companies did not respond to questions about the company’s total loan volume.

As the Kushner Companies, like the rest of the economy, confront instability in the coming months, being able to freeze payments on federally backed loans could offer valuable flexibility.

Under the law signed by Trump last week, in order to freeze the payments, a company has to show it is experiencing financial trouble due to Covid-19.

Real estate experts expect that bar — financial hardship — won’t be difficult for property owners to meet, especially as unemployment rises and tenants increasingly have difficulty making rent.

“This is hitting everybody,” Barrack said.

