Treasury Issues New Guidance for Emergency Rental Assistance Funds

The Treasury Department has released an update to its FAQs regarding the $25 billion Emergency Rental Assistance Program announced on January 5, the latest in a string of guidance to state and local grantees tasked with disseminating rental assistance funds. 

The program, which was designed to help households unable to pay rent and utilities due to the COVID-19 pandemic, will also benefit from an additional $21.5 billion from the American Rescue Plan Act signed into law by President Joe Biden.

Among other things, the FAQs detail who is eligible to receive assistance and what documentation is required to provide eligibility and prove financial hardship related to COVID-19. It also provides guidance on determining whether households are at risk of homelessness or housing instability, and defines household income for purposes of the ERA program. It also clarifies that tenants of federally subsidized housing can receive ERA assistance as long as those funds aren’t applied to costs that would otherwise be reimbursed by other federal assistance, and notes that grantees should give preference to households with incomes that are less than 50% of area median income, and to households with one or more people who have been unemployed for at least 90 days.

The program may prove to be a lifeline for landlords, particularly small owners who are particularly suffering from slumping rent collections. In its most recent Rent Payment Tracker, the National Multifamily Housing Council found 80.4% of apartment renters made full or partial rent payments by March 6, numbers that are far (4.1 percentage points) below those posted in March 2020. 

Declining rents total nearly $70 billion, according to some estimates, and that means landlords are confronting payment shortfalls even as they struggle to meet their own obligations. That issue has only been partially addressed by recent multifamily forbearance extensions. And while two courts have found that the CDC’s eviction moratorium is unlawful, no preliminary injunctions were issued in either matter.