U.S. Treasury Department releases allocations and guidance for second round of Emergency Rental Assistance

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Key Takeaways

On May 7, the Biden administration announced the allocation of the additional $21.6 billion provided under the American Rescue Plan Act (ARPA) for Emergency Rental Assistance (ERA2), including $2.5 billion in targeted assistance to the highest-need areas. View the allocations to states and eligible units of local government, including counties with populations over 200,000, here. Alongside the allocations, the U.S. Treasury Department released updated Frequently Asked Questions (FAQs) for the federal Emergency Rental Assistance (ERA) program. This new guidance provides enhanced flexibilities for local government grantees as they work to deliver assistance to renters and keep residents stably housed. View the new FAQ guidance here.

The new guidance includes several policies and clarifications that local government grantees should be aware of. These include:

  • Direct assistance to renters: ERA2 funds provided under ARPA must be offered directly to renters when landlords do not accept payment. Further, while rental assistance programs under ERA1 (established under the Consolidated Appropriations Act of 2021) required an offer of assistance to landlords before reaching out to renters, the new Treasury guidance specifies ERA2 funds can be used to provide assistance to renters first and immediately.
  • Income verification flexibility: Under ERA1 and ERA2, program administrators will now be able to verify the income eligibility of renters using any reasonable fact-specific proxy, such as the average income in the neighborhood in which renters live.
  • Eviction prohibition: Grantees are required to prohibit landlords that receive ERA funds from evicting a tenant for nonpayment of rent during the period covered by assistance. Additionally, grantees are encouraged to prohibit landlords that receive ERA funds for rental arrears from evicting the tenant for nonpayment of rent for some period of time. Further, the guidance encourages grantees to require landlords that receive ERA funds not to evict tenants for nonpayment of rent for 30 to 90 days longer than the period covered by the rental assistance.
  • Administrative costs: Under ERA1, not more than 10 percent of the amount paid to a grantee may be used for administrative costs attributable to providing financial assistance and housing stability services to eligible households. Under ERA2, however, up to 15 percent of the amount paid to a grantee may be used for administrative costs attributable to providing financial assistance, housing stability services and other affordable rental housing and eviction prevention activities.
  • 18-month household assistance cap: The total amount of financial assistance a household can receive under both ERA1 and ERA2 cannot exceed 18 months.

NACo will continue to monitor ERA Program guidance and advocate for county priorities throughout the implementation process. We will also be publishing additional resources on the program and for more information please be sure to see our Emergency Rental Assistance Resource Hub.

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