Treasury Releases ERA Reallocation Guidance

The Treasury Department published new guidance about the process for taking back emergency rental assistance (ERA) funds from communities that are slow to use them and giving the money to communities that are more quickly distributing the aid to renters in need.

As of the end of August, grantees had only distributed roughly $8 billion of the $46 billion in ERA made available by the Consolidated Appropriations Act of 2021 (ERA1) and the American Rescue Plan (ERA2). The reallocation process, which is statutorily required, “is designed to maximize the amount of assistance delivered and the number of households served with the funds Congress has appropriated to mitigate the effects of the COVID-19 pandemic on renters and landlords,” wrote Treasury Deputy Secretary Adewale Adeyemo in a new letter to ERA grantees.

Grantees are at risk of losing funding if they hadn't obligated at least 65% of their ERAl funding by the end of September. Grantees can also voluntarily give up their funds. For example, states can send money to their cities or counties to maximize the program's impact.

In his letter to grantees, Adeyemo stressed the support Treasury has provided and the success many grantees have had as a result.

“From the beginning of this program, Treasury has provided technical assistance to grantees, released new guidance to reduce barriers to access, published best practices, and spoken with hundreds of program administrators to support their efforts to expedite assistance to tenants. Many grantees have embraced Treasury's recommendations and were able to quickly disburse funds; others that initially struggled to build the necessary program infrastructure are now seeing increased progress after adopting Treasury's recommendations to speed up assistance. Still, some grantees have not demonstrated sufficient progress or intent to make changes in their programs to get resources into the hands of eligible tenants and landlords.”

The department will reassess and reallocate ERA funding every two months.

Read a two-page summary of how reallocation works.

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