In the latest COVID-19 relief act, Congress extended the Centers for Disease Control and Prevention (CDC) imposed eviction moratorium through January 31, 2021, and established a $25 billion fund to assist those who have missed rent or utility payments due to the pandemic. The grants for rental assistance will be given out proportionally to states and local governments with populations over 200,000. Locally, we expect the program to be operated by Hamilton County, or if the county declines, by the state.
Grant money may be used to pay current and past due rent, utilities, home energy costs, and other housing expenses incurred due to COVID-19. The assistance will generally cover up to 12 months of approved costs and expenses, but in some cases, it may extend to 15 months. Tenants may obtain up to three months of rent assistance for upcoming rent obligations. Assuming funds continue to be available, a tenant may be able to obtain additional rent payments after the three month period expires upon completion of a new application.
The governmental unit administering the grant program will make payments directly to the landlord or utility and provide notice to the tenant of any such payments. The government will directly pay a tenant if the landlord or utility company refuses to accept payment from the government on the tenant’s behalf.
The Act prioritizes assistance for households that have income totaling less than half the area median household income or where an individual within the household has been unemployed for over 90 days. However, any household can seek rental assistance under the Act if one or more individuals in the household have qualified for unemployment benefits, experienced a reduction in household income, had other financial hardship due to COVID-19, or can demonstrate a risk of homelessness or housing instability. Any assistance received will not be treated as income and is not to be considered when evaluating eligibility for other state or federal assistance.
The Act allows landlords and owners to assist renters in seeking grant money and allows the landlords to apply for assistance on behalf of a renter in their dwellings. If a landlord submits an application, the landlord must obtain the tenant’s signature (either wet or electronic), provide the tenant a copy of the application, and use any payments received to satisfy the tenant’s rental obligations. The Office of the Inspector General (OIG) will oversee and monitor the program to combat fraud.
Separate from the federal program, the City of Chattanooga is likely to make additional funds available through nonprofits to tenants in need of assistance. Landlords should encourage their qualifying tenants to consider all avenues available to obtain the help they need.
The federally funded program seeks to start in less than 30 days from enactment, so landlords would be wise to identify and communicate with their eligible tenants to encourage participation. Should a tenant be behind in rent and refuse to seek assistance with the program, landlords should consider seeking the assistance on their behalf as it is reasonable to assume that the Biden Administration will continue the eviction moratorium beyond January. Landlords should view this as an opportunity to obtain rent that would likely be very difficult to collect otherwise.