Treasury Issues New Emergency Rental Assistance Guidance

Treasury Issues New Emergency Rental Assistance Guidance

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 affected 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. 

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 affected 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 Department has eased access for qualifying households. We'll go over the changes that will increase the ability for states and localities to deliver aid quickly enough to help low-income renters avert further economic harm.

Less Paperwork

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 to, directly or indirectly, the novel coronavirus disease outbreak, as defined by the Treasury secretary are eligible expenses. However, 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 includes 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 shortened 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 seeks to make a payment to the owner or utility provider.

The previous FAQs required program administrators to attempt contact with 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. Households in LIHTC units were included in the Treasury’s initial eligibility guidance and continue to remain eligible with the Feb. 22 update.

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 will need to 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.

Upcoming COVID Relief Bill Includes More Renter Assistance Funds

The Budget Committee of the House of Representatives recently voted to move forward with its $1.9 trillion coronavirus relief package. The package 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 portion of the bill written by the House Financial Services Committee, led by Chairwoman Maxine Waters (D-CA), shows the following allocations to housing programs:

  • $19.05 billion to the existing Emergency Rental Assistance program at the Department of the Treasury to supplement the $25 billion authorized in December;
  • $9.961 billion for a Homeowner Assistance Fund at the Department of the Treasury providing resources to states, territories, and tribes so they can help homeowners by providing mortgage assistance and funding to cover property taxes, property insurance, utilities, and other housing-related costs;
  • $5 billion for emergency Housing Choice Vouchers;
  • $5 billion distributed through the HOME program formula to help the homeless; funding would be used for purposes such as financing supportive services, affordable housing, and the acquisition of non-congregate shelter (such as hotels);
  • $750 million for the Indian Housing Block Grant and Indian Community Development Block Grant programs;
  • $100 million to support unassisted households in USDA-subsidized properties pay their rent;
  • $100 million for housing counseling services administered by NeighborWorks to help renters and homeowners; and
  • $39 million so that USDA may continue providing Section 502 and 504 home loans.

After the bill passes the House, it’s expected to move quickly through the Senate. House and Senate leaders aim to have a final bill sent to President Biden by March 14, the deadline to extend key unemployment programs.