Guidance on Direct-to-Tenant Emergency Rental Assistance

The CDC eviction moratorium is set to expire at the end of June. Emergency rental assistance (ERA) program administrators must move quickly to assist tenants whose landlords are resistant to receiving rental assistance, so that tenants are not put at risk of eviction and homelessness. Though some program administrators have expressed apprehension about implementing direct-to-tenant payments of assistance, recent guidance from the U.S. Department of Treasury explicitly allows and encourages direct-to-tenant payments. A Treasury memo outlines guidance around direct-to-tenant assistance, program trends, and key considerations. Renters should not lose out on critical assistance due to the unwillingness of landlords or utility companies to participate.

According to federal guidance, ERA1 programs should provide direct-to-tenant payments when landlords or utility companies refuse to participate or do not respond to program requests. The guidance requires that program administrators conduct reasonable outreach efforts to obtain landlord and utility company cooperation. Outreach can consist of a single request for participation by mail or three request attempts by phone, text, or email. When requests are made over the phone, text, or email, program administrators can move forward with payments directly to the tenant after five days of outreach. When the request is made by mail, programs can make a payment to tenants after seven days. Payments can be made immediately if the landlord or utility company confirms their non-participation in writing. These wait times are half of what was required in previous guidance, where program administrators had to wait 10 days and 14 days if contacting by phone, text, and email or by mail, respectively.

NLIHC tracks ERA program implementation, including how many programs offer direct-to-tenant payments. While this captures the number of programs that allow direct-to-tenant payments in public facing documents, additional programs may allow direct payments but fail to inform potential applicants. In late April, only 15% of programs clearly allowed for direct-to-tenant assistance. In late May, 23% of programs did. As of June 16, 26% of programs do. This represents 107 programs, including 24 state programs, 60 local programs, 22 tribal programs, and 1 territory. Despite these improvements, nearly three-quarters of programs do not explicitly acknowledge the allowance of direct-to-tenant payments in their public-facing documents.

Providing assistance directly to tenants is a relatively straightforward process, but program administrators will have to determine several key features, such as how staff will conduct landlord outreach, how outreach will be tracked, and whether tenants will be required to provide additional documentation – such as proof of payment to the landlord or a signed affidavit that states the funds will be used for rent or utilities – to receive funding directly. NLIHC maintains examples of direct-to-tenant affidavits on the ERA Resource Hub. These serve as customizable samples for other programs.

Administrators should consider how to overcome potential challenges with direct-to-tenant payments. Unbanked tenants, for example, may have to pay expensive fees to cash assistance checks before paying the landlord. Administrators should therefore include alternative means of providing assistance, such as creating partnerships with check cashing facilities or local credit unions to reduce transaction fees. Direct-to-tenant assistance also makes it unfeasible for the program to require a landlord to agree to certain renter protections, such as not evicting the tenant or increasing the rent in future months.

Direct-to-tenant payments can ensure renters who have fallen behind on rent during COVID-19 can receive assistance regardless of their landlord’s willingness to participate. Forthcoming research from NLIHC will detail how programs implement direct-to-tenant assistance.

A list of programs allowing direct-to-tenant assistance can be found on NLIHC’s ERA Dashboard.