Emergency Rental Assistance through the Coronavirus Relief Fund (R46688, Version 3, Updated March 31, 2021)

Summary

Version 3 of R46688 (updated March 31, 2021) adds the second round of Emergency Rental Assistance: $21.55 billion in Section 3201 of the American Rescue Plan Act (P.L. 117-2), including a $2.5 billion set-aside for "high need" grantees, on top of the $25 billion in P.L. 116-260. The report says ERA is funded through the Coronavirus Relief Fund and, unlike that fund, may be used only for financial assistance and housing stability services for renters. States and localities must use at least 90% of first-round funds for financial assistance, and renters are eligible if they are low-income, experiencing financial hardship and at risk of homelessness or housing insecurity. It says the amount that can be spent on administrative expenses and housing stability services was increased for the second round.

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Emergency Rental Assistance through the
Coronavirus Relief Fund

Updated March 31, 2021

Congressional Research Service
https://crsreports.congress.gov
R46688
SUMMARY

R46688
Emergency Rental Assistance through the
March 31, 2021
Coronavirus Relief Fund
Grant A. Driessen
In response to concerns about the economic effects of the Coronavirus Disease 2019 (COVID- Specialist in Public Finance
19) pandemic on renters and their landlords, Congress created a $25 billion Emergency Rental
Assistance (ERA) program in the Consolidated Appropriations Act, 2021 (Division N of P.L.
Maggie McCarty
116-260). A second round of ERA funding—$21.55 billion—was included in Section 3201 of the Specialist in Housing Policy
American Rescue Plan Act (P.L. 117-2).

The ERA program is funded through the Coronavirus Relief Fund (CRF) that was established by Libby Perl
the Coronavirus Aid, Relief, and Economic Security Act (CARES Act, P.L. 116-136) and Specialist in Housing Policy
implemented by the Department of the Treasury. Like the CRF, the ERA directs resources to
states and localities via a per capita formula allocation, although the ERA uses a somewhat
different formula that treats the District of Columbia as a state and includes a lower threshold for For a copy of the full report,
please call 7-5700 or visit
localities to qualify for direct allocations (among other differences). The second round of ERA
www.crs.gov.
funding includes a set-aside of $2.5 billion for “high need” grantees. Unlike the CRF, which can
be used for a broad set of purposes including rental assistance, the ERA may only be used for financial assistance and
housing stability services for renters.

P.L. 116-260 established various parameters for how the first round of ERA funding can be used. Among other requirements,
states and localities must use at least 90% of their funds for financial assistance, which is defined to include rental assistance
and utility assistance (including payment of arrearages). The remaining 10% may be used for housing stability services (cas e
management and other supports to help families retain their housing) and administrative expenses. Renters are eligible for
assistance if they are low-income, experiencing financial hardship, and at risk of homelessness or housing insecurity.
Grantees are directed to prioritize very low-income renters for assistance. The law also established expenditure deadlines and
imposed various reporting requirements on the Treasury Secretary.

These parameters were changed somewhat for the second round of ERA funding under P.L. 117-2. Specifically, the amount
that can be spent on administrative expenses and housing stability services was increased, and grantees may be able to use
funds that remain unobligated as of October 1, 2022, for additional affordable housing and eviction prevention activities. P.L.
117-2 also extended the availability of first round ERA funding from December 31, 2021, to September 30, 2022.

Within the statutory requirements—and any additional guidance established by Treasury—states and localities have
flexibility in designing their rental assistance programs. Many had used CARES Act and other funding to establish earlier
rental assistance programs; if those programs are consistent with ERA requirements, th ey may be available to facilitate
relatively rapid distribution of ERA funds.

The ability of states and localities to structure their programs differently will mean that the experience of similarly situated
renters seeking assistance will likely vary geographically. Similarly, there may be geographic variability in the degree to
which existing resources—both ERA and earlier funds—are adequate to meet demand for rental assistance. Estimates from
January 2021 suggest that as much as $57 billion in rental and utility debt may be outstanding nationally.

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Emergency Rental Assistance through the Coronavirus Relief Fund

Contents
Introduction ................................................................................................................... 1
Background: Rental Assistance During the COVID-19 Pandemic ........................................... 1
State and Local Allocations .............................................................................................. 2
P.L. 116-260 ........................................................................................................ 2
P.L. 117-2............................................................................................................ 3
ERA Program Parameters ................................................................................................. 6
Eligible Use of Funds ................................................................................................. 6
Financial Assistance ............................................................................................. 7
Administrative Costs and Housing Stability Services ................................................. 8
Individual Eligibility and Prioritization ......................................................................... 8
Eligibility............................................................................................................ 8
Prioritization ....................................................................................................... 9
Documentation .................................................................................................... 9
Funding Availability and Reallocation........................................................................... 9
Reporting Requirements ............................................................................................. 9
Outstanding Questions ..................................................................................................... 9
How will local programs be structured? ...................................................................... 10
Will rental assistance be adequate to prevent loss of housing?......................................... 10
Will state and local governments use other federal funding for rental assistance? ............... 11

Tables
Table 1. Emergency Rental Assistance Allocations in P.L. 116-260 and P.L. 117-2 .................... 4

Contacts
Author Information ....................................................................................................... 11

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Introduction
The Consolidated Appropriations Act, 2021 (P.L. 116-260) included an appropriation of $25
billion to help low-income households make rent and utility payments through an Emergency
Rental Assistance (ERA) program. 1 The ERA is funded through the Coronavirus Relief Fund
(CRF), a program created as part of the Coronavirus Aid, Relief, and Economic Security
(CARES) Act (P.L. 116-136), and administered by the Department of the Treasury, to assist state,
local, territorial, and tribal governments. 2 While the CARES Act CRF appropriation could be
used for multiple purposes, the ERA appropriation in P.L. 116-260 is directed only to rent and
utility assistance and housing stability services. A second appropriation—of $21.550 billion—for
ERA was included in Section 3201 of the American Rescue Plan Act (P.L. 117-2).
This report briefly describes the need for rental assistance during the Coronavirus Disease 2019
(COVID-19) pandemic, provides information about the allocation of ERA funds, describes the
parameters of the ERA program, and discusses outstanding questions about the program and
renter needs.

Background: Rental Assistance During the COVID-
19 Pandemic
Even before the onset of the COVID-19 pandemic, low-income renters struggled with housing
affordability. In 2020, the Joint Center on Housing Studies reported that nearly half (48%) of all
renters were cost burdened (i.e., paying more than 30% of their income in rent), with higher
numbers for lower-income (80%), Black (55%), and Hispanic (53%) renters.3 The pandemic may
have made renter housing arrangements even more precarious. Renters have been more likely to
lose employment income than homeowners.4 This is particularly the case for Black and Hispanic
renters, who are also estimated to face the greatest threat of eviction during the pandemic . 5
Millions of renters report being behind on their rent and lacking confidence in their ability to pay
next month’s rent. 6
Efforts to assist renters include eviction moratoriums at the state and federal levels. A national
eviction moratorium issued by the Centers for Disease Control and Prevention took effect on

1 See Division N, T itle V, Section 501 of P.L. 116-260.

2 For more information about CRF in the CARES Act, see CRS Report R46298, General State and Local Fiscal

Assistance and COVID-19: Background and Available Data.
3
Joint Center for Housing Studies, America’s Rental Housing 2020, January 2020, pp. 26-29,
https://www.jchs.harvard.edu/sites/default/files/reports/files/Harvard_JCHS_Americas_Rental_Housing_2020.pdf.
4 Alexander Hermann and Sharon Cornelissen, Using the Census Bureau’s Household Pulse Survey to Assess the

Economic Impacts of COVID-19 on America’s Households, Harvard Joint Center for Housing Studies, July 2, 2020,
https://www.jchs.harvard.edu/blog/using-the-census-bureaus-household-pulse-survey-to-assess-the-economic-impacts-
of-covid-19-on-americas-households/.
5
Whitney Airgood-Obrycki, “ T he Impact of COVID-19 on Renters and Rental Markets,” Harvard Joint Center for
Housing Studies virtual event, September 4, 2020, https://www.jchs.harvard.edu/calendar/impact-covid-19-renters-and-
rental-markets. See also, Sophia Wedeen, Black and Hispanic Renters Face Greatest Threat of Eviction in Pandemic,
Harvard Joint Center for Housing Studies, January 11, 2021, https://www.jchs.harvard.edu/blog/black-and-hispanic-
renters-face-greatest-threat-eviction-pandemic.
6 See Census Bureau Pulse survey data, available at https://www.census.gov/programs-surveys/household-pulse-

survey/data.html#phase3.

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September 4, 2020, and has been extended several times, most recently through June 30, 2021.7
While the moratoriums prevent eviction for nonpayment of rent, they do not prevent arrearages
from accumulating, which could result in eviction when moratoriums lift. Renter inability to
maintain payments also affects landlords. This may particularly result in hardship for smaller
landlords, who are estimated to have lower incomes and make up larger shares of Black and
Hispanic landlords. 8
At the outset of the COVID-19 pandemic, states and localities relied on federal funds
appropriated as part of the CARES Act, including funds distributed through CRF, to operate
rental assistance programs. 9 Households may have drawn on CARES Act stimulus checks,
expanded unemployment benefits, and borrowing to cover rent. However, some of these sources
of funds became depleted as the pandemic continued. 10 Estimates suggest that total rental arrears
were $57 billion as of the end of January 2021. 11
Organizations representing both tenants and landlords have advocated for additional federal funds
to help tenants pay their rent. 12 Legislation was introduced in the 116th Congress that would have
provided as much as $100 billion to help tenants pay rent. 13 Ultimately, Congress appropriated
nearly $47 billion for emergency rent and utility assistance through ERA.

State and Local Allocations
P.L. 116-260
P.L. 116-260 provided a total of $25.000 billion in ERA support to governments in states,
territories, and tribal areas. Payments are distributed across these jurisdictions as follows:
 $23.785 billion is allocated for governments in the 50 states and the District of
Columbia (DC) based on their populations (as projected by the U.S. Census
Bureau for July 2020), 14 with no state receiving less than $0.200 billion;

7
For more information, see CRS Insight IN11516, Federal Eviction Moratoriums in Response to the COVID-19
Pandemic.
8
Small landlords in the analysis are those owning 2-4 unit properties; Jung Hyun Choi and Caitlin Young, Owners and
Renters of 6.2 Million Units in Small Buildings Are Particularly Vulnerable during the Pandemic , T he Urban Institute,
August 10, 2020, https://www.urban.org/urban-wire/owners-and-renters-62-million-units-small-buildings-are-
particularly-vulnerable-during-pandemic.
9 See examples from the National Conference of State Legislatures, which tracks the ways in which states are using

their CRF allocations: https://www.ncsl.org/research/fiscal-policy/state-actions-on-coronavirus-relief-funds.aspx.
10 Jim Parrott and Mark M. Zandi, Averting an Eviction Crisis, Urban Institute, January 25, 2021,

https://www.urban.org/sites/default/files/publication/103532/averting-an-eviction-crisis.pdf (hereinafter, Averting an
Eviction Crisis).
11 Ibid.

12 See, for example, National Housing Conference, “31 ho using organizations tell administration and Congress to

immediately return to negotiations,” press release, August 21, 2020, https://nhc.org/press-release/31-housing-
organizations-tell-administration-and-congress-to-immediately-return-to-negotiations/.
13
See the Heroes Act (H.R. 6800) and the Emergency Rental Assistance and Rental Market Stabilization Act (H.R.
6820, S. 3685).
14
U.S. Census Bureau, “Vintage 2020 Population Estimates for the United States and States,” December 2020,
https://www.census.gov/programs-surveys/popest/technical-documentation/research/evaluation-estimates.html.
Allocations are determined by total state populations, including nonrenters; for recent estimates of state renter
populations, see U.S. Census Bureau, “American Community Survey 2015 -2019 5-Year Data Release,” December
2020, https://www.census.gov/newsroom/press-kits/2020/acs-5-year.html.

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 $0.800 billion is set aside for governments in tribal areas, with individual
government allocations distributed in proportion to relative payments made under
the Native American Housing Block Program in FY2020;15
 $0.400 billion is allocated to the territories of Puerto Rico, the U.S. Virgin
Islands, Guam, the Northern Mariana Islands, and American Samoa, with $0.325
billion provided to Puerto Rico and $0.075 billion distributed to the remaining
territories based on their relative population share; and
 $0.015 billion is set aside to cover federal administrative costs related to program
implementation.
ERA payments are generally provided to state (or territorial) governments, though state
governments may transfer any funds received to local governments so long as funds are used for
eligible purposes. Local governments serving a population of at least 200,000 (as measured by the
U.S. Census Bureau in 2019), 16 may elect to receive assistance directly from Treasury. Any
payments made directly to localities reduce the allocation made to the state government (keeping
the total amount provided across each state constant), and are the product of (1) the state or
territorial allocation amount, (2) the percentage of the state or territorial population attributable to
the local government, and (3) 45%.
In many cases, populations are served by more than one local government that is eligible for
direct assistance from the CRF (e.g., a city with a population of 300,000 located in a county with
200,000 other people and thus having a county population of 500,000). Treasury clarified that in
such cases, all overlapping governments are eligible for assistance. 17 However, direct assistance
payments to larger localities is calculated using only their unique population, or will be reduced
by any amounts also attributable to smaller localities receiving assistance (i.e., in the above
example, the county government would only use a population of 200,000 for its direct payment
calculation).

P.L. 117-2
P.L. 117-2 provided a total of $21.550 billion in ERA support to governments in states and
territories. Unlike P.L. 116-260, P.L. 117-2 did not include a separate allocation of funds for tribal
governments. Payments are distributed across these jurisdictions as follows:
 $18.712 billion is allocated for governments in the 50 states and the District of
Columbia (DC) based on their populations (as projected by the U.S. Census
Bureau for July 2020), 18 with no state receiving less than $0.152 billion;
 $0.305 billion is allocated to the territories of Puerto Rico, the U.S. Virgin
Islands, Guam, the Northern Mariana Islands, and American Samoa, with $0.240

15 For more on the Native American Housing Block Grant program, see CRS Report R43307, The Native American

Housing Assistance and Self-Determination Act of 1996 (NAHASDA): Background and Funding, by Katie Jones.
16
U.S. Census Bureau, “Subcounty Resident Population Estimates: April 1, 2010 to July 1, 2019,” May 2020,
https://www.census.gov/data/tables/time-series/demo/popest/2010s-total-cities-and-towns.html.
17 U.S. T reasury, “Emergency Rental Assistance Program: Data and Methodology for State, Local Government, and

T erritory Allocations,” January 2021, https://home.treasury.gov/system/files/136/Emergency-Rental-Assistance-Data-
and-Methodology-1-11-21.pdf.
18 U.S. Census Bureau, “Vintage 2020 Population Estimates for the United States and States,” December 2020,
https://www.census.gov/programs-surveys/popest/technical-documentation/research/evaluation-estimates.html.
Allocations are determined by total state populations, including nonrenters; for recent estimates of state renter
populations, see U.S. Census Bureau, “American Community Survey 2015 -2019 5-Year Data Release,” December
2020, https://www.census.gov/newsroom/press-kits/2020/acs-5-year.html.

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billion provided to Puerto Rico and $0.065 billion distributed to the remaining
territories based on their relative population share;
 $2.500 billion is set aside for high-need grantees, to be distributed by the
Treasury Secretary using statistics on high-need housing, rental market costs, and
unemployment; and
 $0.033 billion is set aside to cover federal administrative costs related to program
implementation.
Direct local allocation identifications, calculations, and division of payments across overlapping
governments in P.L. 117-2 are consistent with the methodology from P.L. 116-260.
Table 1 shows ERA allocations and estimates broken out by state and territory, and government
level. Allocations from P.L. 116-260 have been confirmed by Treasury, while amounts provided
in P.L. 117-2 represent CRS projections based on the distribution in P.L. 116-260. 19

Table 1. Emergency Rental Assistance Allocations in P.L. 116-260 and P.L. 117-2
(All allocations in millions of dollars)
P.L. 116-260 (Actual) P.L. 117-2 (Projected)

Direct Direct
State or State Govt. Local Govt. Total State Govt. Local Govt. Total
Territory Allocation Allocation Allocation Allocation Allocation Allocation

Alabama 263 63 326 208 50 258
Alaska 165 35 200 125 27 152
American Samoa 10 0 10 9 0 9
Arizona 299 194 492 236 153 389
Arkansas 174 27 201 137 22 159
California 1,498 1,113 2,611 1185 881 2066
Colorado 248 137 385 196 109 305
Connecticut 236 0 236 187 0 187
Delaware 200 0 200 152 0 152
District of
200 0 200 152 0 152
Columbia
Florida 872 570 1,441 689 451 1140
Georgia 552 158 710 437 125 562
Guam 33 0 33 29 0 29
Hawaii 125 75 200 95 57 152
Idaho 176 24 200 134 18 152
Illinois 566 268 835 448 212 660
Indiana 372 76 448 294 60 354
Iowa 195 15 210 154 12 166

19 U.S. T reasury, “Emergency Rental Assistance Program: Payments to States and Eligible Units of Local

Government,” February 2021, https://home.treasury.gov/system/files/136/Emergency-Rental-Assistance-Payments-to-
States-and-Eligible-Units-of-Local-Government.pdf.

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P.L. 116-260 (Actual) P.L. 117-2 (Projected)

Direct Direct
State or State Govt. Local Govt. Total State Govt. Local Govt. Total
Territory Allocation Allocation Allocation Allocation Allocation Allocation

Kansas 169 31 200 129 23 153
Kentucky 264 33 297 209 26 235
Louisiana 249 59 308 197 47 244
Maine 200 0 200 152 0 152
Maryland 258 143 402 204 114 318
Massachusetts 421 36 457 333 29 362
Michigan 623 38 661 493 30 523
Minnesota 289 86 375 229 68 297
Mississippi 187 13 200 145 10 156
Missouri 324 84 408 256 67 323
Montana 200 0 200 152 0 152
Nebraska 159 41 200 121 31 152
Nevada 125 83 208 99 66 165
New Hampshire 179 21 200 136 16 152
New Jersey 354 235 589 280 186 466
New Mexico 161 39 200 123 29 152
New York 801 481 1,282 634 381 1015
North Carolina 547 156 703 432 124 556
North Dakota 200 0 200 152 0 152
Northern Mariana
10 0 10 9 0 9
Islands
Ohio 565 210 775 447 167 614
Oklahoma 210 54 264 166 43 209
Oregon 204 77 281 162 61 223
Pennsylvania 570 278 848 451 220 671
Puerto Rico 325 0 325 240 0 240
Rhode Island 200 0 200 152 0 152
South Carolina 272 74 346 215 59 274
South Dakota 200 0 200 152 0 152
Tennessee 383 73 457 303 58 361
Texas 1,308 639 1,947 1035 506 1541
U.S. Virgin Islands 21 0 21 18 0 18
Utah 150 65 216 119 52 171
Vermont 200 0 200 152 0 152
Virginia 525 45 570 415 36 451

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P.L. 116-260 (Actual) P.L. 117-2 (Projected)

Direct Direct
State or State Govt. Local Govt. Total State Govt. Local Govt. Total
Territory Allocation Allocation Allocation Allocation Allocation Allocation

Washington 322 188 510 255 149 404
West Virginia 200 0 200 152 0 152
Wisconsin 322 65 387 255 51 306
Wyoming 200 0 200 152 0 152
All Tribal
800 0 800 0 0 0
Governments
Amounts Not
Projected – High- 0 0 0 n/a n/a 2,500
Need Grantees
Totals 18,305 6,680 24,985 14,195 4,822 21,517

Source: P.L. 116-260 payments taken from U.S. Treasury, “Emergency Rental Assistance Program,” February
2021, https://home.treasury.gov/policy-issues/cares/emerg ency-rental-assistance-program. P.L. 117-2 projections
represent CRS estimates.
Notes: Recipients may choose to transfer funds to governments within their jurisdiction, but are not obligated
to do so. For each state or territory, the sum of the direct local government allocation and the state government
allocation may not equal the total allocation due to rounding.

ERA Program Parameters
When P.L. 116-260 created the ERA program under the CRF, it established parameters for how
the funds can and should be spent. These parameters are relatively broad, but are more
prescriptive than what was included in the original CARES Act CRF. Treasury has issued
Frequently Asked Questions (FAQs) and other guidance documents regarding how certain aspects
of the law are to be applied. 20 For the second round of ERA funding, P.L. 117-2 made some
changes that are applicable to the first round of funding (i.e., expenditure deadlines); and others
that are applicable only to the second round (i.e., income eligibility and caps on administrative
and housing stability services funding). As of the date of this report, Treasury has not issued new
or revised guidance for the second round of ERA funding.
As noted, ERA funds are provided from Treasury to states and localities, which can use the funds
to design their own rental assistance programs within the requirements of the law and Treasury
guidance. Some states and localities may be able to use the new funds to supplement existing
rental assistance programs created with CARES Act or other funds, to the extent their existing
programs align with the emergency rental assistance statutory requirements (which are outlined
below).

Eligible Use of Funds
P.L. 116-260 directed that 90% of ERA funds be spent on direct financial assistance and that up to
10% could be spent on administrative expenses and housing stability services.

20 T reasury guidance can be found at https://home.treasury.gov/policy-issues/cares/emergency-rental-assistance-

program.

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For the second round of ERA funding, P.L. 117-2 directed that no more than 15% be spent on
administrative expenses and 10% be spent on housing stability services, leaving at least 75% to
be spent on direct financial assistance.

Financial Assistance
P.L. 116-260 defined financial assistance as assistance to tenants for
 rent and rental arrears,
 utilities and home energy costs and arrears, and
 other expenses related to housing incurred due, directly or indirectly, to the
COVID-19 outbreak, as defined by the Treasury Secretary.
The definition of financial assistance under P.L. 117-2 is nearly identical, except when it comes to
other expenses related to housing. The P.L. 117-2 definition does not require that the expenses be
related to the COVID-19 outbreak.
Treasury issued an FAQ document in January 2021 clarifying that telecommunications services
are not considered utilities under this program. 21 However, Treasury later revised the FAQs to
define “other expenses” eligible for assistance to include internet service, if it allows renters to
engage in distance learning, telework, and telemedicine and obtain government services. 22
Additional “other expenses” identified in the FAQ include relocation expenses and rental fees (if
a household has been displaced due to COVID-19), and accrued late fees.

Length of Assistance
Under P.L. 116-260, assistance can be provided for no more than 12 months, with the possibility
of one 3-month extension. Payments made for prospective rent are subject to additional
limitations; they can only be provided in 3-month increments and only if rental arrearages are
addressed.
Under the terms of P.L. 117-2, recipients can receive no more than 18 months of assistance under
both rounds of ERA combined.

Payments
P.L. 116-260 directed that payments be made directly to landlords or utility providers, but it
allows payments to be made directly to tenants if landlords or utility providers are unwilling to
accept such payments.
Landlords are permitted to aid their tenants in applying, or they may apply directly. Landlords
who apply directly must meet certain conditions (including obtaining tenant signatures , notifying
tenants of the application, and ensuring any funds received are applied to tenants’ rental
obligations).
P.L. 117-2 made these provisions applicable to the second round of ERA funding.

21 See the FAQ at https://home.treasury.gov/system/files/136/ERA-Frequently-Asked-Questions_Pub-1-19-21.pdf.

22 T reasury has revised FAQs in February and March of 2021. See the February FAQs at https://home.treasury.gov/

system/files/136/ERA-Frequently-Asked-Questions_Pub-2-22-21.pdf; and March FAQs at https://home.treasury.gov/
system/files/136/ERA-Frequently-Asked-Questions_Pub-3-16-21.pdf.

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Administrative Costs and Housing Stability Services
Under P.L. 116-260, the remaining 10% of grant funds can be used for grantee administrative
costs and housing stability services.
P.L. 116-260 defined “housing stability services” as case management and other services related
to COVID-19, to be defined by the Secretary, that are intended to keep tenants stably housed. (As
of the date of this report, Treasury has not further defined the term.)
P.L. 116-260 restricted administrative expenses to those tied to providing financial assistance and
housing stability services, including for data collection and reporting requirements.
P.L. 117-2 established a cap of up to 15% of total grant funding for administrative expenses and
up to 10% for housing stability services. The law defined “housing stability services” as case
management and other services intended to keep households stably housed, without reference to
COVID-19. It defined “administrative expenses” as those included under P.L. 116-260, as well as
costs associated with other affordable rental housing and eviction prevention activities.

Individual Eligibility and Prioritization
P.L. 116-260 established a three-part eligibility test based on income level, income loss or other
financial hardship, and risk of homelessness or housing instability. It also established a set of
income targeting requirements to guide states and localities in prioritizing assistance. P.L. 117-2
largely adopted the same requirements, but with some changes.

Eligibility
Under P.L. 116-260 , to be eligible for direct financial assistance or housing stability services,
households must be renters and
 low-income, defined (consistent with federal housing law) as having income at or
below 80% of local area median income as established by the Department of
Housing and Urban Development (HUD);
 experiencing financial hardship, as evidenced by receipt of unemployment
benefits or a written attestation of other pandemic-related financial hardship
(income loss or increased expenses); and
 have at least one member at risk of homelessness or housing instability, as
evidenced by past due rent or utility notices (including eviction notices), unsafe
living conditions, or other evidence as established by the grantee.
The eligibility definition in P.L. 117-2 does not include the detail as to how an individual can
demonstrate a risk of homelessness or housing insecurity that was included in P.L. 116-260.
Neither law addresses noncitizen eligibility for assistance under the ERA program. 23

23 Some questions have arisen as to whether noncitizen eligibility restrictions under the Personal Responsibility and
Work Responsibility Act of 1996 (PRWORA; T itle IV of P.L. 104-193, as amended) apply to assistance under the
ERA program. T o date, T reasury has not issued guidance on the applicability of PRWORA noncitizen restrictions to
these funds. For more information about PRWORA’s restrictions, see CRS Report R46510, PRWORA’s Restrictions on
Noncitizen Eligibility for Federal Public Benefits: Legal Issues.

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Prioritization
P.L. 116-260 directs grantees to prioritize the following individuals for direct financial assistance
and housing stability services:
 very low-income tenants defined (consistent with federal housing law) as having
income at or below 50% of local area median income as established by HUD;
and
 applicants who are unemployed and have been unemployed for the prior 90 days.
The law permits states and localities to further establish their own prioritization policies.
P.L. 117-2 made these provisions applicable to the second round of ERA funding.

Documentation
P.L. 116-260 specified that grantees may determine an applicant’s income eligibility based on
annual income or current monthly income (subject to three-month recertification).
P.L. 117-2 does not include provisions related to income determination.

Funding Availability and Reallocation
P.L. 116-260 made first round ERA funds available to grantees through December 31, 2021; the
deadline was subsequently extended to September 30, 2022, by P.L. 117-2. However, beginning
September 30, 2021, the Treasury Secretary is directed to recapture any excess unobligated funds
(as determined by the Secretary) and to reallocate them to grantees that have obligated at least
65% of their funds for eligible purposes. Grantees receiving reallocated funds may request up to a
90-day extension of availability deadline.
Funding provided through P.L. 117-2 is available until September 30, 2025. Beginning March 31,
2022, the Treasury Secretary is directed to reallocate unobligated funds to grantees that have
obligated 50% or more of their total allocated funds. These reallocated funds can only be used for
financial assistance. Grantees that have obligated at least 75% of their funds for eligible purposes
as of October 1, 2022, may obligate remaining funds for other affordable rental housing and
eviction prevention purposes for very low-income families.

Reporting Requirements
The Treasury Secretary, in consultation with the Secretary of Housing and Urban Development, is
required under P.L. 116-260 to provide quarterly reports on a number of specified program
indicators, including the number of households served by the program, their income profiles, the
acceptance rate of applicants, and the types and amounts of assistance. Grantees must establish
data privacy guidelines for collecting information.
P.L. 117-2 did not contain reporting requirements.

Outstanding Questions
Several aspects of the ERA program will not be known until grantees receive funds and
implement programs at the state and local levels. This section discusses possible questions about
the implementation of the ERA program, adequacy of funds, and potential implications if state
and local governments were to receive additional funds.

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How will local programs be structured?
There is likely to be a great deal of variation across states and localities in terms of how local
ERA programs are structured.
As noted earlier, ERA funds are allocated to states and localities. States and localities are then
charged with distributing assistance to eligible renters based on a limited set of program
parameters. Within those parameters, states and localities have authority to determine, for
example,
 who will administer assistance (i.e., a government entity vs. a nonprofit or
community partner);
 how to prioritize among the eligible uses of the funds (e.g., arrears vs.
prospective payments; utilities vs. rent);
 how to ration limited benefits (e.g., lotteries for assistance vs. first-come first-
served or referral-based processes);
 whether and how to further prioritize applicants (e.g., adopting deeper income
targeting than is required by law);
 how much documentation to require of applicants and for recertification periods;
 the amount and duration of benefits provided;
 whether to place conditions on the recipients of assistance (e.g., requiring
landlords to accept partial payment to reduce debt obligations); and
 whether and what to provide in terms of housing stability services.
One factor that may influence state and local decisions is the extent to which any existing
emergency rental assistance programs they administer may already meet, or may be easily
adjusted to meet, the requirements for ERA funding. To the extent states and localities can fund
existing programs with their ERA dollars instead of having to establish new programs, the
assistance could potentially be distributed more quickly.
The ability of state and local governments to structure their programs differently will mean that
the experience of similarly situated renters seeking emergency rental assistance will likely vary
geographically. How and whether individual renters are made aware of the availability of ERA
funds in their communities; their individual eligibility and likelihood of being assisted; and how
to access available assistance are currently uncertain. (As of the date of this report, there is no
central federal repository for information on federally funded emergency rental assistance
programs. 24 )

Will rental assistance be adequate to prevent loss of housing?
Both the amount and geographic distribution of ERA funds c ould determine the extent to which
renters may be protected from eviction. Additional federal assistance, which could take various
forms, could also affect the need for, and adequacy of, ERA funds.
Because there is no definitive estimate of renters in arrears and the amounts they owe, it is
unknown whether all renters who are behind will be able to receive assistance with available

24 One national organization, the National Low Income Housing Coalition, has created a repository of local rental

assistance programs, funded with a mix of state or local funds and federal funds from various programs. It can be
accessed at https://nlihc.org/rental-assistance.

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funding. Estimates of the need for rental assistance vary and may depend on the data source and
methodology (which are not examined in this report). 25 Research released in January 2021
predicted that the first round of ERA rental assistance would be insufficient to meet the needs of
all delinquent renters. 26 Since that time, P.L. 117-2 funded another $21.550 billion in rental
assistance as well as additional direct aid to individuals via stimulus payments and refundable
child tax credits. Whether this additional aid will be sufficient to address outstanding arrearages
and avoid widespread housing disruption when eviction moratoriums end is yet to be seen.

Will state and local governments use other federal funding for
rental assistance?
How state and local governments choose to distribute ERA funds across programs and other
governments may depend on the availability of other federal assistance during the COVID-19
pandemic for rental assistance. Separate from the ERA funding, the federal government provided
a total of $512 billion in general assistance to state and local governments through the CARES
Act ($150 billion) and P.L. 117-2 ($350 billion). General assistance through the CARES Act was
used by government recipients to fund a number of housing initiatives, 27 and eligible uses of P.L.
117-2 general assistance include programs “to respond to the public health emergency … or its
negative economic impacts, including assistance to households.”28

Author Information

Grant A. Driessen Libby Perl
Specialist in Public Finance Specialist in Housing Policy

Maggie McCarty
Specialist in Housing Policy

25 Various estimates made in 2020 predicted arrears of $7 billion, $25 -$34 billion, and $70 billion by the end of the

year. See Davin Reed and Eileen Divringi, Household Rental Debt During COVID-19, Federal Reserve Bank of
Philadelphia, October 2020, https://www.philadelphiafed.org/-/media/frbp/assets/community-development/reports/
household-rental-debt-during-covid-19.pdf; Stout, Risius Ross LLC, Analysis of Current and Expected Rental Shortfall
and Potential Eviction Filings in the U.S., National Council of State Housing Finance Agencies, September 25, 2020,
https://www.ncsha.org/wp-content/uploads/Analysis-of-Current-and-Expected-Rental-Shortfall-and-Potential-
Evictions-in-the-US_Stout_FINAL.pdf; and John Lonski, Weekly Market Outlook: Markets Avoid Great Recession’s
Calamities, Moody’s Analytics, August 13, 2020, p. 9, https://www.moodysanalytics.com/-/media/article/2020/weekly-
market-outlook-markets-avoid-great-recessions-calamities.pdf.
26
Averting an Eviction Crisis.
27 Pandemic Oversight, “Coronavirus Relief Fund,” accessed March 23, 2021, available at

https://www.pandemicoversight.gov/track-the-money/funding-charts-graphs/coronavirus-relief-fund.
28 42 U.S.C. 801, Section 602(c)(1)(A), which provides eligible uses for the Coronavirus State Fiscal Recovery Fund.

Identical language is included in statute for the Coronavirus Local Fiscal Recovery Fund.

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