HUD Issues Guidance on COVID-19 and HOME Projects

On May 1, 2020, the Department of Housing & Urban Development (HUD) issued updated guidance relative to application of the CARES Act to projects with HOME funding. Section 4024 of the CARES Act imposes a temporary moratorium on evictions. The temporary eviction moratorium applies to covered dwelling units assisted by the HOME program. Primary components of the guidance include:

  • The CARES Act eviction moratorium applies to HOME-assisted projects as well as dwelling units occupied by recipients of HOME tenant-based rental assistance (TBRA).
  • Rental projects that received HOME assistance that are currently within the period of affordability (POA) specified in the HOME written agreement – including those projects with a POA longer than that required by the HOME regulation – are covered.
  • Rental projects that have a HOME loan within its term of repayment and secured on the property as a first or subordinate lien, regardless of whether the project is in its POA, are covered.
  • Homeownership projects containing rental units that received HOME assistance that are currently within the POA are covered, as are homeownership projects with rental units that have a HOME loan within the terms of repayment and secured by a first or subordinate lien.
  • All residential rental units in or on properties (i.e., multifamily and multi-unit single family) that have a HOME loan secured on the property – regardless of whether the project is in its POA – are covered.
    • E.g., a 100 unit apartment community has ten HOME-Assisted Units; all 100 units must comply with the CARES Act requirements.
  • For a period of 120-days, beginning on March 27, 2020 and continuing through July 24, 2020, an owner cannot:
    • Make, or cause to be made, any filing with the court of jurisdiction to initiate an eviction (e.g., an unlawful detainer, complaint) for nonpayment of rent or other fees or charges; or
    • Charge fees, penalties or other charges to the tenant related to the nonpayment of rent.
  • If an owner did not provide the tenant with an eviction notice, including but not limited to a notice to vacate, quit, or terminate tenancy, for nonpayment of rent or other fees or charges prior to March 27, 2020, the owner may not issue such notice until after the 120-day period.
  • Fees, penalties, or charges relating to nonpayment of rent may not be charged during the 120-day period.
  • Monthly rent, fees, and other charges (except fees and charges relating to the nonpayment of rent during the 120-day moratorium) may accrue during the 120-day period and be charged to the tenant after the CARES Act 120-day moratorium ends on July 24, 2020. In other words, the residents will still own rent for this period of time
  • The CARES Act moratorium does not apply to evictions based on violations of permitted lease terms other than nonpayment of rent or other fees, penalties, and charges.

Owners and managers of properties with HOME assistance should ensure compliance with these requirements going forward and make sure that all site staff of HOME-assisted properties are also familiar with the requirements.