Denis Doulgeropoulos
Your Financial Professional & Insurance Agent
Emergency Rental Assistance Program: Crisis Averted for Struggling Renters and Landlords
The Emergency Rental Assistance Program was introduced to address the growing financial crisis facing renters and landlords across the United States. By one estimate, U.S. landlords were owed about $57 billion in unpaid back rent at the beginning of 2021. Meanwhile, the average household that fell behind owed roughly four months of rent, or $5,600. As a result, more than 10 million U.S. families faced the possibility of eviction, highlighting the urgent need for Emergency Rental Assistance Program funding.¹
Financial Strain on Landlords
Many landlords have faced serious financial strain alongside tenants who lost income during the pandemic. In particular, landlords who rely on rent for retirement income have felt the impact most sharply. Although large corporations often own multi-family apartment complexes, small investors own about 90% of single-family rental properties. As a result, many now face mortgage default, bankruptcy, or forced property sales.²
Federal Housing Assistance Relief
Fortunately, the federal stimulus bill passed in March 2021 expanded housing support significantly. Specifically, Congress added nearly $22 billion in housing assistance to the $25 billion previously approved.³ In many cases, local agencies send payments directly to landlords on behalf of eligible renters. Therefore, landlords may recover unpaid rent without pursuing eviction.
Program Parameters
Under the Emergency Rental Assistance Program (ERAP), the U.S. Treasury provides grants to states, cities, and counties with populations over 200,000. These funds cover past-due rent and utility bills accrued after March 13, 2020. However, eligibility limits assistance to households earning less than 80% of the area’s median income, as defined by the Department of Housing and Urban Development.
Tenant Eligibility Requirements
To qualify, applicants must document household income and demonstrate financial hardship caused by COVID-19. For example, tenants may show job loss, reduced income, or unemployment benefits. Additionally, applicants must submit unpaid bills or eviction notices that prove housing instability.
What Can Landlords Do?
Typically, landlords and tenants apply for assistance together. However, program rules vary by location. In some states, landlords must forgive a portion of past-due rent in exchange for larger assistance payments.
If you are a landlord, consider contacting tenants who have fallen behind on rent. Encouragingly, many tenants qualify for programs they may not know about. Meanwhile, check state and local housing agency websites for eligibility rules and application details. Keep in mind, higher-income households may not qualify, and programs in high-demand areas may exhaust funds quickly.
Alternatives to Eviction
Evictions often cost time and money. Therefore, working out a payment plan may offer a better solution. If tenants show good-faith efforts to catch up, a structured repayment agreement can help keep them housed while restoring rental income.