Overview of Emergency Rental Assistance Program

Coronavirus

Overview of Emergency Rental Assistance Program

Established under the Consolidated Appropriations Act of 2021, the Emergency Rental Assistance (ERA) Program provides $25 billion directly to States, the District of Columbia, U.S. Territories, local governments (population over 200,000), and Indian tribes to assist households that are unable to pay rent and utilities due to the COVID-19 pandemic through new or existing rental assistance programs. Following the enactment of the American Rescue Plan, the ERA received an additional $21.5 billion in funding. The first round of funding is referenced as ERA 1 and the second round of funding is referenced as ERA 2.

The program is administered by the U.S. Department of Treasury.

On August 25, 2021, the Treasury issued updated FAQs, click here to review the document.

ERA1 and ERA2 allocation and payment information can be viewed here.

For additional questions or more information, please contact the FLC Staff.

ERA 1 (Consolidated Appropriations Act of 2021)

Grantee	Funding Allocation
States (including the District of Columbia): Funding proportionally based on 2019 Census data; minimum distribution $200 million Local governments (200,000+ population), May access 45% of their state's allocation	$23.785 billion
Commonwealth of Puerto Rico U.S. Virgin Islands Guam Commonwealth of Northern Mariana Islands American Samoa	$400 million
Indian tribes Native Hawaiians	$800 million
Treasury Administration Expenses	$15 million

ERA 2 (American Rescue Plan)

Grantee	Funding Allocation
States (including the District of Columbia) Local governments (200,000+ population), May access 45% of their state's allocation	$18.7 billion
Commonwealth of Puerto Rico U.S. Virgin Islands Guam Commonwealth of Northern Mariana Islands American Samoa	$305 million
Indian tribes Native Hawaiians	N/A
Treasury Administration Expenses	$30 million
Treasury Office of Inspector General (OIG)	$3 million
High-need Grantees (eligible grantees with a high need for assistance, with the number of very low-income renter households paying more than 50% of income on rent or living in substandard or overcrowded conditions, rental market costs, and change in employment since February 2020 used as the factors for allocating funds).	$2.5 billion

The term eligible household refers to a household of one or more individuals who are obligated to pay rent on a residential dwelling and with respect to which the eligible grantee involved determines—

(A) That one or more individuals within the household has:

Qualified for unemployment benefits or,
Reduction in household income, incurred significant costs, or experienced other financial hardship due, directly or indirectly, to the COVID-19 outbreak.

(B) One or more individuals within the household can demonstrate a risk of experiencing homelessness or housing instability; and

(C) the household is a low-income family (as such term is defined in section 3(b) of the United States Housing Act of 1937 (42 U.S.C. 1437a(b)).

Grantees must prioritize applications of eligible households satisfying the following conditions:

Income of household must not exceed 50% of the AMI for the household.
One or more individual(s) within the household are unemployed at the time of application for assistance and have not been employed for the 90 day period preceding such date.

Grantees should establish a preference system for assistance that prioritizes assistance to households with incomes less than 50% area median income and to households with one or more members that have been unemployed for at least 90 days. Grantees should document the preference system they plan to use and should inform all applicants about available preferences.

Funds may only be used to provide financial assistance and housing stability services to eligible households. Not less than 90% of funds received by an eligible grantee must be used to provide financial assistance to eligible households, including payment of:

Rent
Rental arrears
Utilities and home energy costs
Utilities and home energy costs arrears
Other expenses related to housing incurred directly or indirectly to COVID-19

In accordance with the statutory limitation on administrative costs, the total of all administrative costs incurred by the grantee and all subrecipients, whether direct or indirect costs, may not exceed 10% of the total amount of the award provided to the grantee from Treasury. The revised award term no longer requires grantees to deduct administrative costs charged to the award from the amount available for housing stability services. Rather, any direct and indirect administrative costs must be allocated by the grantee to either the provision of financial assistance or the provision of housing stability services.

The Inspector General of the Department of Treasury is tasked with monitoring and oversight of the recipient, disbursement, and use of funds.

If it is determined that a grantee used funds for ineligible expenses, the amount of the funds used in violation of the program will be booked as a debt for that grantee who shall have the responsibility of paying it to the federal government.
Further, beginning on September 30, 2021, the Secretary shall recapture excess funds, as determined by the Secretary, not obligated by a grantee for the purposes described under subsection (c) of the law and the Secretary shall reallocate and repay such amounts to eligible grantees who, at the time of such reallocation, have obligated at least 65 percent of the amount originally allocated and paid to such grantee under subsection (b)(1), only for the allowable used described under subsection (c).

*There is no requirement that Treasury recapture funding from grantees that do not obligate 65% of their funds by September 30
*Treasury has not put out definitions for "obligated" or "excess" under ERA or provided guidance yet on the process they will use to make those determinations

Treasury has engaged grantees to identify program strategies that promise to speed up program implementation, deliver program benefits more efficiently, enhance program integrity, and improve tenant and landlord access to programs. In particular, Treasury is regularly updating information on specific promising practices.

Click HERE to see the Treasury compilation that includes jurisdiction examples that include, but are not limited to: Culturally and Linguistically Competent Outreach, Intentional Landlord Engagement and Data-Driven Program Strategies.

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