Affordable Housing

By Stan Gimont, senior advisor for community recovery, Hagerty Consulting and Mark O'Mara, director of recovery, Hagerty Consulting

The Consolidated Appropriations Act enacted at the end of December 2021, included $25 billion for an emergency rental assistance program (ERAP) to help forestall renter evictions and housing instability associated with the COVID-19 pandemic.  In January, the Treasury Department allocated ERAP funds to eligible states and local governments. These funds are directly allocated to states, U.S. territories, local governments with more than 200,000 residents, the Department of Hawaiian Homelands, and Indian tribes.

Using the Coronavirus Relief Fund allocation formula from last year’s CARES Act, nearly 45% of state allocations will be distributed directly to local governments. Jurisdictions across the country are now engaged in efforts to stand up rental assistance programs that can provide households with up to 15 months of assistance to address rental and utility arrears, as well as future rent and utility costs.  Some jurisdictions are building upon existing rental assistance programs that were implemented with either CARES Act funding or other public financial resources; however, even for jurisdictions that had this head start, the ERAP launch has been complicated by ongoing policy shifts and evolving compliance requirements, some of which may be as a result of the administration transition.

On February 22, President Biden’s Treasury Department issued a new set of Frequently Asked Questions (FAQs) that revised and expanded upon the FAQs previously issued by the Trump Administration on January 19.  For anyone responsible for managing ERAP funds, it is important to familiarize yourself with the fundamentals of Treasury’s new guidance.

Guidance for Direct and Indirect Allocations

If your jurisdiction received a direct allocation from Treasury, here are several important things to keep in mind:

  • Grantees are required to obligate at least 65 percent of their funds by September 30, 2021, or face possible recapture of unobligated funds.  That deadline is now less than seven months away.  Expeditious, yet compliant, program administration and fund distribution will be extremely important going forward.
  • An effective outreach strategy should be developed to target both landlords and households and encourage/assist with requisite applications.  Preferably, ERAP payments should be made directly to landlords so it is important they understand their ability to apply on behalf of their tenants.
  • Establish an intake mechanism that will withstand the short-term demands placed on it.  Potential interest in ERAP could overwhelm internet and phone systems–as has happened with the COVID vaccine sign-up experience in many jurisdictions.  Be prepared to meet that demand prior to launch.
  • Understand how ERAP funds can be accessed by landlords and tenants in your community. Work with the state ERAP administrator to coordinate throughout the allocation process.
  • Develop and document a detailed set of policies and procedures through which to operate your program, then use them.  While Treasury appears to be making policy decisions to expedite use of the funds, always exercise caution and follow guidance closely to ensure compliance, as well as guard against potential de-obligations of federal funding in the future.

Conversely, if your jurisdiction did not receive direct ERAP funding, make sure you fully understand how to effectively direct local landlords and renters into your respective state’s ERAP process.  A locally developed outreach strategy that accesses the experience and knowledge of local governmental agencies and nonprofit organizations will be useful alongside a broader, less targeted statewide effort.

Program Eligibility and Implementation

Up to 10 percent of ERAP funds may be used for grantee administrative costs.  This may include costs for case management, housing stability services, consultant/vendor support, system of record, and call centers.  Local governments with direct allocations should be able to use up to 10 percent of their allocation for program management; however, all local governments should also ask state officials whether any additional administrative funds may be made available to promote local implementation. 

By statute, ERAP is limited to households:

  1. At or below 80 percent of area median income (AMI).
  2. In which at least one household member qualified for unemployment benefits, experienced income reduction, incurred significant costs or other financial hardship due to COVID-19.
  3. In which at least one person in the household can demonstrate a risk of homelessness or housing instability.

Treasury has provided limited details related to the eligibility criteria above; therefore, grantees have a degree of latitude in defining items such as financial hardship or risk of housing instability. To that end, eligibility should be explicitly defined, and adhered to, in any set of policies and procedures used to implement a state or local program to ensure both equitable treatment, as well as to provide for quality control and assurance during future federal audits or other administrative reviews.

Additionally, the revised Treasury guidance expanded the number of situations in which attestations by landlords or renters may be used to satisfy ERAP requirements on verification of income, arrearages, and other data points.  Grantees will have to determine to what degree they are willing to rely on attestations as the basis for making ERAP assistance decisions.  A broad reliance on attestations could speed distribution of ERAP assistance but also could open the door to fraudulent activity detrimental to the overall effort.  Again, a thorough set of policies and procedures will be key to demonstrating that due care was taken in the implementation of the program. 

Once eligibility is established, grantees are required to prioritize processing of households at or below 50 percent of AMI and those with at least one person who was unemployed for at least 90 days leading up to the date of application. 

Next Steps

In response to the ongoing COVID-19 crisis, new federal programs and policy changes continue to be announced almost daily; however, planning for and organizing your community’s cost recovery now will help prevent the need to untangle information after the fact, increase your chances of federal reimbursement, and prepare you for any future audits you may face.

While ERAP implementation requirements can be difficult to navigate, this program has the potential to directly assist your community’s ongoing response to and recovery from COVID-19 by helping to keep families in their homes during this challenging time. The benefits of this program are vast; however, adherence to strict eligibility, documentation, and compliance requirements is necessary. Moreover, extensive community outreach, engagement, and experienced implementation will be critical to success.

For more information on ICMA resources related to COVID-19, visit


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