On December 27, 2020 the Consolidated Appropriations Act, 2021 (the “Act”), was signed into law. While the Act has many provisions, one measure of relief created was the Emergency Rental Assistance Program (“ERA1”). ERA1 was created to assist households that are struggling with rent and utility payments or other expenses as further defined in the Treasury’s FAQ’s. On March 11, 2021, the American Rescue Plan Act of 2021 (“ARPA”) was signed into law and expanded upon ERA1 to create additional funding under the Emergency Rental Assistance Program referred to as ERA2.
The chart below summarizes some of the important information and differences between the ERA1 and ERA2 programs contained in the Treasury’s FAQ’s:
| Programs | ERA1 | ERA2 |
|---|---|---|
|
General: |
||
| Total Appropriations |
$25 Billion |
$21.55 Billion |
| Period of Performance |
September 30, 2022 |
September 30, 2025 |
| Allowable for Administrative Costs |
10% |
15% |
| Total Months of Assistance Allowed | Initial twelve (12) months and an additional three (3) months if eligible | Eighteen (18) months (including period in which recipient received ERA1 funding) |
| Duplicative Funding | Not allowed | Allowed, but the Treasury encourages minimization of duplicative funding to maximize the use of the funding |
| Application Process: | ||
| Grantee Versus Landlord | Landlord or grantee after required outreach to landlord is made | Landlord or grantee |
| Outreach to Landlord/Utility Company Required |
Yes |
No |
|
Eligibility: |
||
| Eligibility Criteria |
a. One or more individuals within the household has qualified for unemployment benefits or experienced a reduction in household income, incurred significant costs, or experienced other financial harship due, directly or indirectly, to the COVID-19 outbreak; b. One or more individuals within the household can demonstrate a risk of experiencing homelessness or housing instability; and c. The household has a household income at or below 80% of area median income |
a. One or more individuals within the household has qualified for unemployment benefits or experienced a reduction in household income, incurred significant costs, or experienced other financial hardship during or due, directly or indirectly, to the coronavirus pandemic; b. One or more individuals within the household can demonstrate a risk of experiencing homelessness or housing instability; and c. The household is a low-income family (as such term is defined in section 3(b) of the United States Housing Act of 1937 (42 U.S.C. 1437 a(b)) |
|
Unemployment or experienced a reduction in income or hardship due to COVID-19 or the coronavirus pandemic |
If relying on unemployment for this eligibility determination, grantee may take a written attestation from the applicant or obtain other relevant documentation regarding their qualifcation for unemployment. If relying on reduction of income or hardship, the grantee must obtain a written attestation signed by the applicant. |
If relying on unemployment or hardship for this eligbility determination, grantee may take a written attestation from the applicant or obtain other relveant documentation regarding their qualification for unemployment.
|
|
At risk for homelessness or housing instability |
From the Treasury FAQ #3: The statutes establishing ERA1 and ERA2 both require that one or more individuals within the household can demonstrate a risk of experiencing homelessness or housing instability, which may include:
Grantees may establish additional criteria for determining whether a household satisfies this requirement, and should adopt policies and procedures addressing how they will determine the presence of unsafe or unhealthy living conditions and what evidence of risk to accept in order to support their determination that a household satifies this requirement. |
|
|
Household Income Determination |
Grantees must have a reasonable basis for determining income in both ERA1 and ERA2. This would include generally a written attestation signed by the applicant and other documentation such as a W-2, pay stubs, bank statements or an attestation signed by their employer. If no documentation is available, the grantee may accept just a written attestation signed by the applicant; however, in this case, the applicant must be reassessed every three (3) months. |
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Eligible Expenses |
||
|
Rent and Utilies |
Rent (including rent in arrears) and utility bills including:
Other expenses include rental security deposits and rental fees, reasonable accrued late fees and relocation expenses. |
|
|
Other Expenses |
Must be related to housing and "incurred due, directly or indirectly, to the novel coronavirus (COVID-19) outbreak." |
Must be related to housing but does not require that they be incurred due to the COVID-19 outbreak. |
|
Hotel Expenses |
From the Treasury FAQ #26: The cost of a hotel or motel room occupied by an eligible household may be covered using ERA assistance within the category of certain "other expenses related to housing" (as described in FAQ 7) provided that:
The cost of the hotel or motel stay would not include expenses incidental to the charge for the room. |
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For a full list of all questions and answers, please visit the Treasury’s FAQ’s.
Other considerations:
- Ensure you have clear process and controls related to each program documented in writing.
- The ERA1 is considered more restrictive for certain eligibility determination factors. If determined eligible under ERA1, a household will most likely be considered eligible under the ERA2 program.
- Ensure that you are segregating what funding you are using under ERA1 rules versus ERA2 rules.
- Catalog of Federal Domestic Assistance (“CFDA”) for both programs is 21.023.
- Grantees must document how they plan to prioritize households at or below 50% area median income and those with members that have been unemployed for at least 90 days. The grantee must post publicly how they are accomplishing this by July 15, 2021.
- If a grantee receives Low Income Housing Energy Assistance Program (“LIHEAP”) funding, the grantee may want to coordinate the use of ERA1 and ERA2 funding with this program to maximize the use of these funds. While LIHEAP funds can only be used for certain periods of time and for utilities, the ERA1 and ERA2 funding has other uses like rent that LIHEAP funds cannot be used for.
Reach out to the Cherry Bekaert Government Services Group for questions or further information on this program.
