Federal Rental Assistance Funds are Now Directly Available for Iowa Landlords

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As discussed previously (December 2020, February and March 2021), per Section 501 of Congress’s Coronavirus Response and Relief Supplemental Appropriations Act 2021, $25 billion in rental assistance funds are being distributed to states and larger cities and counties as part of the Emergency Rental Assistance Program (ERAP).

Iowa’s application process for tenants for its ERAP funds went live on Monday, March 29, and now, landlords may also apply directly for these funds. Details are below.

Landlords Can Now Apply Directly

Iowa’s new rental assistance program allows landlords to apply for funding on behalf of tenants who have suffered financial hardship due to COVID-19. The initiative, called the Iowa Rent and Utility Assistance Program, provides assistance in the form of direct payments to landlords.

Eligible households may receive assistance for up to 12 months of past-due rent and utilities, dating back to March 13, 2020, and up to three months of future rental payments.

To be eligible, a household must satisfy the following criteria:

  • Be current renters earning no more than 80% of their county’s area median income;
  • One or more individuals in the household must have either qualified for unemployment benefits or have experienced a documented financial hardship as a result of the COVID-19 in the form of a reduction of household income or incurred significant costs due directly or indirectly to COVID-19; and
  • Can demonstrate a risk of experiencing homelessness or housing instability which may include a past due utility or rent notice or an eviction notice.

An eligibility questionnaire is included in the application process. Area median income limits for all Iowa counties are available here.

The program allows either a landlord or tenant to apply. In either case, the funds will be disbursed directly to the landlord. In exchange for accepting rental assistance funds, the landlord must agree to:

  1. not evict any member of the household for nonpayment of rent for any of the months for which assistance is received, and
  2. waive all late fees against the household.

When a landlord applies on behalf of a tenant, the landlord must obtain various documentation from the tenant, including proof of:

  1. identification
  2. income
  3. financial hardship, and
  4. housing instability.

Information regarding required documentation is available here.

The program is open to renters of various property types, including apartments, single-family homes, manufactured homes, and manufactured home lots.

The Iowa Finance Authority, which administers the program, has published a user guide for landlords, providing step-by-step instructions for the application process.

Iowa Exceptions - Polk County and City of Des Moines

Please note that Polk county and the city of Des Moines are administering the program locally, through IMPACT. Thus, residents of Polk county and the city of Des Moines are ineligible to apply for the Iowa Rent and Utility Assistance Program and instead should apply for rental assistance through the local IMPACT program. More information on this program can be found at IMPACT Community Action Partnership. At this point in time, only tenants may apply with IMPACT, and, as of the writing of this post, all tenant appointments are shown as full, per IMPACT’s website.

Reminders to Landlords Regarding ERAP Funds

Landlords should be aware that as part of the receipt of ERAP funds, they may have to agree to certain requirements, depending upon the specific program, such as agreeing they will not evict the tenant for non-payment during a certain length of time and/or will waive late fees and penalties. Landlords should ensure they understand any conditions of receipt of ERAP funds; such conditions may vary from state to state and city to city.

Landlords with questions should contact an experienced landlord/tenant attorney to discuss their specific situation.

Resources:

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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