U.S. Department of the Treasury

Partnerships with Broader Eviction Diversion Programs

Many grantees have found that partnerships with their local court systems and legal services organizations are critical tools for preventing housing insecurity and helping landlords recover from rental arrearages. While court systems and eviction procedures vary across states and localities, these grantees have engaged with local courts, legal aid organizations, and other stakeholders to reach households with the greatest need for assistance—those facing imminent eviction. These partnerships have often included streamlined procedures that reduce the eligibility documentation required from households in these situations. 

Efforts by ERA grantees are sometimes complementary to broader eviction diversion programs.  These efforts play an important function in cases where the landlord had already started eviction proceedings.  In addition to expediting ERA applications, they often prevent evictions by utilizing the support of legal service professionals and mediators in interventions at the early stages of the court process.  ERA grantees have also found court data helpful for informing targeted outreach efforts to landlords and/or high-need geographic areas.

Focus on mediation

The State of Massachusetts

The State of Massachusetts has developed a two-tiered eviction process that has integrated the ERA program into eviction proceedings. In the first tier, landlords and tenants work with a mediator who can direct them to ERA resources to cover qualified rental arrears. This state-funded program also engages legal aid services, as well as housing reinstatement services, for those cases where tenants ultimately experience eviction.

Focus on data sharing with local courts

The city of Memphis and Shelby County, TN

The city of Memphis and Shelby County’s joint program includes a data sharing relationship with the local court system. This partnership affords ERA program administrators real-time information about neighborhoods with increased eviction activity, allowing more targeted outreach towards tenants and landlords.  Using this data, the ERA program administrators have been able to foster effective relationships with larger apartment complexes and engage directly with tenants on the premises. Memphis and Shelby County have also contracted with a local nonprofit organization with experience providing legal services to tenants facing evictions, helping them to reach settlement and avoid evictions. Further efforts to expand tenants’ access to legal services have included enlisting faculty and student volunteers from the local law school.  The Memphis and Shelby County ERA program expedites ERA applications that come through these channels, allowing many households to use ERA funds to remain stably housed rather than enduring the hardship of a court-approved eviction.

View the full case study from U.S. Digital Response that details their work with Memphis and Shelby County: "Keeping Families in Their Homes by Scaling Workflows"

The city of Philadelphia, PA

The city of Philadelphia’s ERA program is also integrated directly into the city’s eviction court system. The court requires defendants to apply for the city’s ERA program before allowing the eviction to proceed. Further, all landlords who enroll in the city’s ERA program are automatically enrolled in the eviction diversion system, alerting them to the resources offered by the city to help avoid tenant evictions, such as nonprofit mediation services.

Focus on a multi-faceted approach

The city of Louisville, KY

Louisville, KY is utilizing a multi-pronged approach to eviction diversion that includes legal representation for tenants, community based outreach, and collaboration with local courts. The city has allocated $400,000 of their ERA funding to enact a right to counsel program for tenants with children who are facing eviction. Their Office of Resilience and Community Services has partnered with the Office of Women, Office of Housing, Neighborhood Place, and the Coalition for the Homeless to target and reach out to Louisville residents at risk of eviction. The collaboration with the Office of Women was born out of the recognition that female led households, especially those headed by African-Americans, are disproportionately targeted for eviction. Outreach includes knocking on doors, sending texts, and making phone calls to encourage these tenants not to miss their court dates. Staff also attend eviction court on a daily basis and can coordinate with the judges to stay eviction for tenants who could benefit from emergency rental assistance. To aid tenants who “self-evict”, by moving when they receive an eviction notice, the city has put in place a rapid-rehousing program that provides a rental deposit and the first month’s rent to help people relocate.

Eviction diversion maturity levels

The following maturity model can help grantees shape a strategy and have actionable steps to address eviction diversion. A maturity model is a tool that helps organize strategy, practices, and process into a framework that can act as a blueprint for building up stronger capabilities. This model is intended to aid ERA grantees and stakeholders in determining their program’s current development stage and identify improvements that will facilitate increasingly robust, comprehensive, and effective approaches to ensuring housing stability within their jurisdictions.

Disclaimer: The practices referenced in this model may contemplate the leveraging of ERA funding with other federal, state, and local resources. The model’s reference to an example practice should not be construed as confirming such practice’s eligibility for any particular type or category of federal funding. Grantees should consult the governing federal program authorities for additional guidance before expending funds for such purposes to confirm eligibility.

• Eviction Diversion Maturity Model

  The maturity model is also provided in a PDF to take away and use your with team to discuss strategies and approaches

  View the maturity model PDF

Guidance

What are eligible “other affordable rental housing and eviction prevention purposes” under the statute establishing ERA2?

The statute establishing ERA2 provides that a grantee may use any of its ERA2 funds that are unobligated on October 1, 2022, for “affordable rental housing and eviction prevention purposes, as defined by the Secretary, serving very low-income families (as such term is defined in section 3(b) of the United States Housing Act of 1937 (42 U.S.C. 1437a(b))).”¹ However, in accordance with the ERA2 statute, prior to obligating any funds for such purposes, the grantee must have obligated at least 75 percent of the total ERA2 funds allocated to it for financial assistance to eligible households, eligible costs for housing stability services, and eligible administrative costs. These requirements are described below.²

Eligible Uses of ERA2 Funds

Eligible Affordable Rental Housing Purposes. Eligible “affordable rental housing purposes” are expenses³ for:

• the construction, rehabilitation, or preservation of affordable rental housing projects serving very low-income families; and
• the operation of affordable rental housing projects serving very low-income families that were constructed, rehabilitated, or preserved using ERA2 funds.⁴

For purposes of the definition above, affordable rental housing projects serve very low-income families only if:

• the household income of occupants of units funded by ERA2 funds is limited to the maximum income applicable to very low-income families, as such term is defined in section 3(b) of the United States Housing Act of 1937 (42 U.S.C. 1437a(b)); and
• such income limitation is imposed through a covenant, land use restriction agreement (LURA), or other enforceable legal requirement for a period of at least 20 years.

In addition, to be considered an affordable rental housing purpose serving very low-income families, an affordable rental housing project funded, in whole or in part, with ERA2 funds must conform to and meet the program regulations and other requirements of one or more of the types of assistance listed below. In other words, uses of ERA2 funds for an affordable rental housing purpose must be aligned with at least one of the following programs and must meet the requirements of that program along with the other conditions specifically set forth in this FAQ:⁵

• Low-Income Housing Tax Credit (Treasury);
• HOME Investment Partnerships Program (U.S. Department of Housing and Urban Development (HUD));
• HOME-ARP Program (HUD);
• Housing Trust Fund Program (HUD);
• Public Housing Capital Fund (HUD);
• Indian Housing Block Grant Program (HUD);
• Section 202 Supportive Housing for the Elderly (HUD);
• Section 811 Supportive Housing for Persons with Disabilities (HUD);
• Farm Labor Housing Direct Loans and Grants (U.S. Department of Agriculture (USDA));
• Multifamily Preservation and Revitalization Program (USDA).

Eligible Eviction Prevention Purposes. Eligible “eviction prevention purposes” are defined in the same manner as housing stability services under FAQ 23; however, services provided with funds made available for eviction prevention purposes must serve very low-income families.

Cost Allocation. Grantees may use ERA2 funds as part of the financing for a mixed-income housing project if the total financing made up of ERA2 award funds does not exceed the total development costs attributable to affordable rental housing units serving very low-income families.⁶ For example, if 25 percent of a project’s units will be reserved for very low-income families and 20 percent of the total costs of all housing units in the project are attributable to such reserved units, then ERA2 funds may be used to pay for up to 20 percent of the total development costs.

Form of Provision of Funds and Time of Obligation.  Grantees that use ERA2 funds for an eligible affordable rental housing purpose may provide such funds in the form of loans (including no-interest loans and deferred-payment loans), interest subsidies, grants, or other financial arrangements.  ERA2 funds may not be used to establish, provide financial support to, or invest in revolving loan funds or other structured funds.

Under the ERA2 statute, grantees may obligate funds only until September 30, 2025, and all obligations must be liquidated by the closeout date of the award in accordance with the Uniform Guidance, i.e., no later than 120 calendar days after September 30, 2025. ⁷ ERA2 funds are considered to be obligated upon the grantee’s approval ⁸of the loan, interest subsidy, grant, or other financial arrangement, and such obligations are considered to be liquidated for the purpose of award closeout upon the grantee’s disbursement of the ERA2 funds.  Any proceeds or income a grantee receives after September 30, 2025, from loans, interest subsidies, or other similar financial arrangements made with ERA2 funds must be used for affordable rental housing purposes or eviction prevention purposes in accordance with this FAQ.

Obligation of 75 Percent of Allocated Funds

Treasury will calculate the 75 percent obligation threshold as (i) the total amount of ERA2 funds the grantee has obligated ⁹for financial assistance to eligible households, eligible costs for housing stability services, and eligible administrative costs, divided by (ii) the grantee’s total ERA2 allocation, including any amounts reallocated to and excluding any amounts recaptured from the grantee.  For example, if a grantee voluntarily reallocated 50 percent of its total initial ERA2 allocation, and did not experience any other reallocation, it must obligate 75 percent of its post-reallocation amount (or 37.5 percent of its initial ERA2 allocation) to use its remaining ERA2 funds for eligible affordable rental housing and eviction prevention purposes.  If a grantee reaches the 75 percent threshold after October 1, 2022, it may begin using ERA2 funds for eligible affordable rental housing and eviction prevention purposes once it reaches the threshold.

Administrative Costs Attributable to Affordable Rental Housing and Eviction Prevention Purposes

The statute establishing ERA2 permits each grantee to use up to 15 percent of the total amount of ERA2 funds paid to it for eligible administrative costs.  Consistent with FAQ 29, any direct and indirect administrative costs must be allocated by the grantee to the provision of financial assistance, housing stability services, or other affordable rental housing and eviction prevention purposes.  Thus, a grantee’s administrative costs with respect to affordable rental housing and eviction prevention purposes may be paid with ERA2 funds only in an amount up to 15 percent of the grantee’s expenditures for these purposes.

^{1 As of the date of this FAQ, the definition of “very low-income families” in 42 U.S.C. 1437a(b) is “low-income families whose incomes do not exceed 50 per centum of the median family income for the area, as determined by the Secretary [of Housing and Urban Development] with adjustments for smaller and larger families, except that the Secretary may establish income ceilings higher or lower than 50 per centum of the median for the area on the basis of the Secretary’s findings that such variations are necessary because of unusually high or low family incomes.”  All references to “very low-income families” in this FAQ incorporate this definition.  The Department of Housing and Urban Development annually updates its calculations relevant to the definition of “very low-income families” at https://www.huduser.gov/portal/datasets/il.html.}

^{2 Treasury’s reporting guidance will address the specific reporting and certification requirements associated with the uses of ERA2 funds described in this FAQ.}

^{3 ERA2 award funds used for affordable rental housing and eviction prevention purposes will be subject to the applicable requirements set forth in the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), 2 CFR Part 200. Specifically, ERA2 grantees are required to comply with the applicable procurement standards set forth in 2 CFR §§ 200.317 through 200.327 when procuring goods and services for these eligible purposes, and the allowability of expenses related to affordable rental housing and eviction prevention purposes will be subject to the Cost Principles set forth in 2 CFR Part 200, Subpart E.}

^{4 Expenses for transitional housing (i.e., any dwelling that is intended to provide temporary housing to formerly homeless persons for a period up to 24 months) or emergency shelters are not considered “affordable rental housing projects” and therefore are not eligible “affordable rental housing purposes.”}

^{5 For purposes of determining whether any expenses constitute affordable rental housing purposes under ERA2, in the event of a direct conflict between ERA2 requirements and requirements of a listed program to which a grantee will conform its affordable rental housing project, ERA2 requirements will prevail with respect to any portion of the project funded by ERA2 funds.  A direct conflict between program requirements occurs only when it is impossible to comply with the requirements of ERA2 and of the other program.  In contrast, if two sets of income or affordability-period requirements apply to the same units, there is no direct conflict; grantees must satisfy both by applying the more stringent requirements.}

^{6 The specific units within a mixed-income housing project subject to the applicable income limitation may vary over time depending on operational needs, provided the units subject to the income limitation at any point do not materially differ from units funded by ERA2 funds.}

^{7 See 2 CFR § 200.344.}

^{8 Such approval occurs at the time of the execution of a written agreement or other legal instrument providing for the disbursement of ERA2 funds.}

^{9 To determine whether a grantee has obligated ERA2 funds, Treasury will rely on the criteria set forth in section II.A of the ERA1 Reallocation Guidance originally published on October 4, 2021 and updated on March 30, 2022, available at https://home.treasury.gov/system/files/136/Updated-ERA1-Reallocation-Guidance%203-30-%202022.pdf.}