Emergency rental assistance included in most recent COVID relief package

Key Takeaways

The Consolidated Appropriations Act of 2021 (P.L. 116-260), the most recently enacted COVID-19 relief bill, establishes a $25 billion emergency rental assistance program. Of the funding provided, $23.8 billion is for direct emergency rental assistance payments to states and local governments with 200,000 residents or more. The funding will be allocated to each state based on their share of the U.S. population, similar to how funds were allocated by the Coronavirus Relief Fund, and each state will receive at least $200 million. Notably, eligible local governments may apply for a direct allocation from Treasury Department. The deadline for this application is January 12, 2021. The inclusion of emergency rental assistance in the legislation is helpful for counties, who have been working diligently to support their residents struggling with housing costs and instability arising from the COVID-19 pandemic.

To apply for a direct allocation, local governments must submit a financial information form as well as a certification form to the Treasury Department by January 12, 2021, guaranteeing that they will only spend the emergency rental assistance payments on eligible activities. The Treasury Department must obligate the funding within 30 days of enactment, and the Department intends to release a breakdown of payment amounts to grantees in the coming days.

To view NACo’s chart on estimated funding allocations for eligible counties with populations above 200,000 for the emergency rental assistance, please click here (these figures are an estimation and subject to change with more information from Treasury).

Emergency rental assistance is available to eligible renter households in which at least one individual:

• Qualifies for unemployment or has experienced a reduction in household income, incurred significant costs or experienced a financial hardship due to COVID-19;
• Demonstrates a risk of experiencing homeless or housing instability; and
• Has a household income at or below 80 percent of the area median income (AMI).

Household income is defined as the household’s total income during calendar year 2020 or monthly income at the time of application. Additionally, state and local government grantees must prioritize households with an individual who has been unemployed for 90 days before applying for rental assistance and households with below 50 percent AMI.

Eligible households, or landlords applying on behalf of an eligible household, may apply for rental assistance payments through existing or newly created rental assistance programs established by the grantee. Rental assistance payments to households are limited to 12 months, but grantees can extend the payments for an additional 3 months if they determine it to be necessary and funding is available.

Grantees must spend at least 90 percent of their funding on direct financial assistance, including rent, rental arrears, utility and home energy costs and/or arrears, and other housing costs stemming from the pandemic. The remaining 10 percent can be used for housing stability services. The Treasury Department will recoup funds not spent by grantees beginning September 30, 2021 and reallocate those funds to entities that have spent at least 65 percent of their primary allocation. 

NACo will monitor the Treasury Department’s allocation process and keep members informed of any future guidance or regulations regarding the use of emergency rental assistance funding.