Rental Assistance in COVID-19 Relief Packages

NAHB worked with lawmakers to include a robust rental relief component in two economic stimulus bills that will allow landlords to request rental assistance on behalf of their tenants. The Emergency Rental Assistance Program (ERAP), for which NAHB strongly advocated, provides nearly $50 billion for rental assistance, utility payments, arrearages and certain other eligible uses.

Key details:

• Funds will be available for 12 months of rent, utilities and arrears with a possible three-month extension.
• Applications will be for a three-month period, and if at the time of application, the tenant only lists their current month’s income they must resubmit the application every three months with updated income information for any additional assistance.

Flexibility for States and Localities

Administered through the Treasury Department, funding will go directly to states or large local governments. Treasury is providing state and local government grantees with considerable flexibility to design their own ERAP programs, subject to federal requirements for tenants’ eligibility, permissible uses of funds and documentation requirements.

Protections for Property Owners

In a big win for NAHB, there are guardrails for funding that would require payment to go directly to the property or utility company, and landlords may request rental assistance on behalf of their tenants. If the landlord wants to request assistance on behalf of their tenant they must:

• Obtain a signature from the tenant on the application (can be electronic);
• Share documentation of the application with the tenant; and
• Ensure any funds obtained from the application are used towards rent or arrears.

If the property owner refuses direct funding assistance, the payment will then go directly to the household.

Eligible Households

An eligible household is defined as one of the following:

• One or more individuals within the household has qualified for unemployment or has experienced a significant reduction in household income, incurred significant costs, or experienced other financial hardship due to COVID-19.
• One or more individuals within the household can demonstrate risk of experiencing homelessness or housing instability, which may include:
  • Past due utility, rent, or eviction notice
  • Unsafe or unhealthy living conditions, or
  • Any other evidence determined by the grantee (state or locality)
• Household with an Area Median Income (AMI) of 80% or below.

The funding is geared to households that are 50% of AMI or lower and capped at 80% AMI. There is also a preference given if one or more individuals in a household has been unemployed for at least 90 days at the time of the application. However, only current income is considered to better target those who have had significant financial impacts from COVID-19.

Distribution of ERAP Funds

The U.S. Treasury Department is responsible for distributing ERAP funds to state and eligible local governments. Please see the Treasury Department Emergency Rental Assistance Program webpage for more information about the program, FAQs, a list of state and local governments that received ERAP and additional resources. 

Email boardtopics@nahb.org with any questions regarding ERAP.