Treasury Department Issues New Emergency Rental Assistance Guidance
New guidance lowers barriers to emergency rental relief.
On Feb. 22, the Department of the Treasury released an updated FAQ to help states and communities quickly distribute more than $25 billion in emergency rental assistance to renters financially impacted by the COVID-19 pandemic. The $25 billion for the Emergency Rental Assistance (ERA) program was provided for late last year by the Consolidated Appropriations Act of 2021.
Under the law, counties with populations above 200,000 residents were eligible to receive direct payments from the Treasury Department if they applied for program funding by the Jan. 12, 2021, deadline. The rent relief is overseen by the Treasury Department but will be administered at the state and local levels.
Under the updated FAQs, the Treasury has eased access for qualifying households. We’ll go over the changes introduced by the updated document that will increase the ability for states and localities to deliver aid quickly enough to help low-income renters avert further economic harm.
To expedite relief, the new Treasury FAQs allow households to self-certify that they meet the financial hardship criteria. In other words, applicants can self-attest to their eligibility for the program.
For income eligibility purposes, program administrators must generally require documentation to support the determination of income, but under limited circumstances administrators may rely on a written attestation from the applicant without further documentation if income isn’t verifiable. The program administrators must document their policies and procedures for determining a household’s eligibility and must have controls in place to ensure compliance with those policies and prevent fraud. Administrators must specify in their policies and procedures the circumstances under which they’ll accept written attestation instead of further documentation, and must have in place reasonable validation or fraud prevention procedures to prevent abuse.
Expanded Definition of ‘Housing Costs’
The first FAQs provided that other expenses related to housing incurred due, directly or indirectly, to the novel coronavirus disease outbreak, as defined by the secretary, are eligible expenses. But the Treasury Department didn’t define these expenses, deferring to program administrators to determine whether the ERA funds would cover specific fees and expenses.
With the updated FAQs, in addition to rent and utility costs for eligible households, housing costs covered by the ERA program include the cost of Internet service provided to the rental unit. The FAQ identifies Internet as a “vital service that allows renters to engage in distance learning, telework, and telemedicine and obtain government services.” Program administrators must adopt policies that outline the circumstances under which they would cover Internet expenses.
In addition to Internet cost, the updated FAQ gives examples of other expenses related to housing such as relocation expenses, rental fees, and reasonable accrued late fees. The legislation allows for up to 10 percent of the funds received by program administrators to be used for housing stability services related to the COVID-19 outbreak intended to keep households stably housed.
Housing stability services include costs such as housing counseling, fair housing counseling, case management related to housing stability, housing-related services for survivors of domestic abuse or human trafficking, attorney’s fees related to eviction proceedings, and specialized services for individuals with disabilities and seniors that support their ability to access or maintain housing.
Shorter Time Frame for Payout
The updated FAQs shorten the time period in which the program administrator must wait before providing assistance directly to a tenant if an owner or utility provider is unresponsive to contact when the administrator tries to make a payment to the owner or utility provider.
The previous FAQs required program administrators to try to contact an owner over a 21-day period. Under the revised FAQs, the administrators may make payments to an applicant if the owner or utility provider doesn’t respond to a written request sent through the mail within 14 days or doesn’t respond to three attempts at contact via phone, text, or email within 10 calendar days.
Eligibility for Federally Assisted Households
The updated FAQs clarify that federally subsidized households experiencing financial hardship are eligible to receive the emergency relief for the tenant portion of the rent and not for the portion already receiving other forms of rental assistance.
The updated FAQs state:
An eligible household that occupies a federally subsidized residential or mixed-use property may receive ERA assistance, provided that ERA funds are not applied to costs that have been or will be reimbursed under any other federal assistance. If an eligible household receives a monthly federal subsidy (e.g., a Housing Choice Voucher, Public Housing, or Project-Based Rental Assistance) and the tenant rent is adjusted according to changes in income, the renter household may receive ERA assistance for the tenant-owed portion of rent or utilities that is not subsidized.
To avoid duplication of federal funds, ERA program administrators must confirm that the funds aren’t being provided for the same costs as other federal rental assistance. According to the FAQ, a self-attestation from the applicants regarding nonduplication with other government assistance can meet this confirmation requirement.
Next COVID-19 Relief Bill Includes Additional Renters Assistance Funds
On March 6, the Senate passed its version of the American Rescue Plan Act of 2021, a $1.9 trillion coronavirus relief bill. The plan is being taken up by the House before heading to President Biden’s desk for his signature. The legislation is based on the parameters set forth in President Biden’s coronavirus relief proposal. The bill’s various provisions were compiled into one legislative package by the nine House authorizing committees.
The following housing provisions are based on the Senate-passed version of the bill:
- Appropriates $27.4 billion in emergency rental assistance including:
- $21.55 billion for emergency rental assistance via Coronavirus Relief Fund;
- $5 billion for emergency housing vouchers;
- $750 million for tribal housing needs;
- $100 million for rural housing.
- Appropriates $305 million to Puerto Rico, the U.S. Virgin Islands, the Northern Mariana Islands, and American Samoa for emergency rental assistance.
- Appropriates $5 billion to assist people who are homeless with immediate and long-term assistance (emergency housing vouchers).
- Provides $9.96 billion for a Homeowner Assistance Fund.
- The first 40 percent of funding for the emergency rental assistance program will be provided within 60 days of enactment.
- Appropriates $750 million for the Native American Housing Block Grants, Native Hawaiian Housing Block Grant, and Indian Community Block Grant programs.
- Not more than 15 percent of funds paid to state and local governments can be used for administrative costs.
- Appropriates $39 million to assist rural homeowners through the USDA’s Section 502 and Section 504 direct loan programs.