Administration Announces More Funding for ERAP

On May 7, 2021, the Biden Administration announced the allocation of an additional $21.6 billion under the American Rescue Plan for Emergency Rental Assistance – including $2.5 billion targeted to the highest need areas. The original funding for the program is referred to as ERA1. This new funding is ERA2.  In concert with the additional funding, the Administration is implementing additional, stronger guidance regarding how the funds are distributed. Concurrent with the announcement by the Administration, the Treasury Department updated the ERAP FAQs.  The new guidance adds the following requirements to the ERAP program:

  1. Requires – for the first time – programs to offer assistance directly to renters if landlords choose not to participate.
  2. Cuts in half the wait for assistance offered to renters when landlords do not participate. Currently, where assistance is first offered to landlords, programs must wait 14 days when reaching out by mail or ten days when reaching out by phone, text, or email before offering relief directly to a tenant. Those wait times will now be cut in half, to seven days and five days respectively.
  3. Allows – for the first time – offers of assistance directly to renters first. Rental assistance under the initial ERAP had to be offered to landlords first. The new funds can now be used to provide assistance to renters first and immediately.
  4. Increases the number of eligible uses for the money. In addition to using the funds to keep renters in their homes, the new funding may be used to cover such costs as moving expenses, security deposits, future rent, utilities, and the cost of a transitional stay in a hotel or motel when a family has been displaced.
  5. Protects renters from eviction while payments are being made on their behalf. Effective immediately, programs that use ERAP funds must prohibit the eviction of renters for nonpayment in months for which they receive emergency rental assistance.
  6. Grantees are prohibited from establishing documentation requirements that would reduce participation.
  7. Allows programs to verify the eligibility of low-income renters based on readily available information or “proxies.” Programs will now be able to verify the income eligibility of renters using any reasonable fact-specific proxy, such as the average income in the geographic area in which the renters live. Grantees must require all applications for assistance to include an attestation from the applicant that all information included is correct and complete. If a written attestation of income – without further documentation (or a fact-specific proxy) – is relied on, the grantee must reassess household income for such household every three months.
  8. Prohibits programs from denying assistance to eligible residents solely because they live in Federally-Assisted housing.
  9. Requires that programs document prioritization of assistance to renters most in need. Programs are required to prioritize assistance to low-income households and those with members who have been unemployed for more than 90 days. Priority must go to households with income below 50% of the AMGI.
  10. Time Limit on Assistance. Under ERA1, an eligible household may receive up to 12 months of assistance (with an additional three months if necessary to ensure housing stability). Under ERA2, assistance may be up to 18 months.
  11. Administrative Expenses. Under ERA1, not more than 10% of the amount paid to a grantee may be used for administrative expenses. Under ERA2, not more than 15% of the amount paid to a grantee may be used for such expenses.