Covid-19 has not only brought distress in the form of a pandemic, but the lockdown that followed has caused many small businesses to shut down. Even large corporations have either downsized or temporarily sent their employees on forced, unpaid leave.
It is no surprise that under such circumstances, many families are struggling to meet ends. One of the major concerns is having to evacuate their residence along with children and other dependents because of their inability to pay rent. Because of such a situation, the US government has launched an Emergency Rental Assistance Program. It is a fund worth 25 billion dollars that has been set up by the government to provide relief to those who do not have enough means to pay for their house rent and utilities, owing to the pandemic.
These funds are made available by the federal government to the:
- Territories of the United States
- Indian tribes
- Governing bodies of areas that have 200,000 residents or more
- Department of Hawaiian Home Lands
The authorities in each of these areas either merge the received amount with the already existing housing relief programs in their jurisdictions or set up new rental assistance programs specific to those who have suffered at the hands of Covid-19.
However, to receive these funds, the above-mentioned grantees are required by the federal government to sign an acceptance of terms specific to this award. They are also liable to provide complete payment details. If both these documents have been submitted by 12th January 2021, (11:59) Eastern Time Zone, only then will the applying body be considered for receiving an amount under the Emergency Rental Assistance Program. In case any of the local entities have chosen not to participate in this Program via providing the necessary information, Treasury will be reallocating the funds to regions who have signed up for availing this award.
The local bodies are bound to use at least 90% of these funds for direct modes of residential assistance such as rent payment, home energy costs, and household expenses. The rest of the amount may be used to help those who need assistance with case management or other means of residential stability.
The allocated funds will expire on 30th September 2022.
Who is eligible to receive these benefits?
A family living in a rented house with at least one of its members meeting the below-mentioned criteria will be eligible for receiving aid via the Emergency Rental Assistance Program:
- The said family member is unemployed or the family has been subject to a significant decrease in household income due to the economic effects of the pandemic.
- The family is at risk of homelessness.
- The household income of the family is less than 80% of the median income in their area.
A prerequisite to availing of these benefits is that the concerned household must not be simultaneously availing of any other rental assistance from the federal government.
Households with members who have been out of work for 90 days or more before applying or families whose household income is less than 50% of median area income will be considered on a priority basis.
There are two ways to determine the household income:
- Calculating the total amount a household will collectively earn during the year
- Calculating the household’s monthly earnings during the period they apply for rental assistance.
If the second method is used, the household income will need to be reassessed after every three months to check if the beneficiary still falls under the eligibility criteria.
What aid is granted under this program?
Households that qualify to receive this benefit are liable to receive rental assistance for a whole year. If the state/governing authority feels that the beneficiary needs extra time to achieve stability, they might extend the period by three months, given that sufficient funds are available to be disbursed.
The program prioritizes payment of arrears as they could lead to eviction and ultimately homelessness of a family. If funds are left after making pending payments, then only future rent payments are supported. Also, once the burden of arrears has been partially or fully removed from a household, future assistance may be limited to the next three months only. However, if households have not exceeded the maximum allowed limit on this rental assistance, they may reapply to receive aid after the three months, given that their circumstances are unchanged.
How to apply?
The application can be submitted directly by the eligible households, or by their landlord on their behalf. However, applications must be made through proper channels defined by local governments. Ideally, the payment will directly be made to those the beneficiary owes; such as landlords, utility service providers, etc. However, if those individuals do not want to be part of the process, the respective households can receive the allocated funds.
The Treasury Department is required to issue quarterly reports explaining where funds have been used. The Emergency Rental Assistance Program is directly supervised by The Treasury Office of Inspector General who might retrieve the funds from local bodies upon non-compliance with the pre-defined rules and restrictions.