Indiana Housing and Community Development Agency Ordered to Resume its Emergency Rental Assistance Program, IERA2

By Tori Bourret, NLIHC Manager of State and Local Innovation Outreach and Sasha Legagneur, NLIHC State and Local Innovation Intern   

Indiana housing advocates are fighting to preserve a win in a recent court case, Cadence Blanchard vs. Indiana Housing and Community Development Authority, which mandates Indiana resume the second iteration of its emergency rental assistance program, Indiana Emergency Rental Assistance (IERA2), after the state abruptly closed the program in March 2025. The state agency has appealed the court's decision, and the Indiana Court of Appeals has ordered the trial court's ruling to remain in effect pending review of the case by the appeals court.   

During the height of the pandemic, Congress appropriated $46.5 billion in federal emergency rental assistance (ERA) through the “Consolidated Appropriations Act” (ERA1) and the “American Rescue Plan Act” (ERA2) to support renters facing housing precarity and economic uncertainty. Emergency rental assistance was distributed to over 700 state and local agencies who implemented more than 500 programs. Both ERA1 and ERA2 guidance allow programs to implement various flexibility, enabling the quick distribution of funds, providing housing stability services, and covering rental arrears and future rent payments in three-month increments. The programs differed in the length of the assistance supplied and the eligibility requirements. The deadline to use ERA1 funds was September 30, 2022, and the deadline to use ERA2 funds is September 30, 2025.   

Indiana received approximately $558 million in ERA1 and ERA2 funding administered by the Indiana Housing and Community Development Authority (IHCDA). Many state and local partners, including Prosperity Indiana, worked with IHCDA to ensure ERA1 and ERA2 went to renters with the lowest incomes and those most at risk of eviction. IHCDA implemented some of the partners’ recommendations, such as working with community groups to provide housing stability services but also chose to add a unique requirement in IERA2 mandating family development counseling as a pre-requisite to receiving a second round of emergency rental assistance. Before approval, second-round applicants had to be graded “self-sustaining” or “thriving” in at least one of the twelve counseling topics.  

The state hindered further access to emergency rental assistance when Alex Hickner, Chief of Staff at Indiana’s Office of Business Affairs, asked Matt Rayburn, Deputy Executive Director & Chief Real Estate Development Officer of IHCDA, to shutter the program immediately on March 17, 2025, per the request of Mike Speedy, Indiana’s Secretary of Business Affairs. No reason for the closure was cited. On March 27, 2025, IHCDA made a public announcement about the program’s closure, with no opportunity for public comment. The sudden closure of the program meant many renters were at imminent risk of eviction and mental and physical stress, including Cadence Blanchard, Muriel Amlett, and Lisa Carpenter. On April 21, 2025, they filed a motion for a preliminary injunction to stop IHCDA from terminating IERA2 to remove the counseling requirements preventing renters from receiving assistance and to resume distribution of emergency rental assistance to plaintiffs and class action members. 

Attorney Ian R. Bensberg from Cohen Malad, LLP and Attorney Fran Quigley from the Housing, Health, and Human Rights Clinic at Indiana University McKinney School of Law represented the plaintiffs in the case. The plaintiffs claimed that the closure went against Indiana’s Open Door Law and Indiana’s “Administrative Orders and Procedures Act” (AOPA) and violated Article 1, Section 23 of Indiana’s Constitution.  

At the hearing, Judge Richard M. Blaiklock heard from Cadence, Muriel, and Lisa, who detailed their housing situation at the time of the program’s closure. When the women received notice of the closure, Cadence had received one payment from the IERA2 program and was on a waitlist to receive family development counseling, Muriel was waiting to hear back from IHCDA about her initial application, and Lisa was awaiting the status of her third IERA2 payment. Cadence and Muriel also had evictions filed against them, the former in February and the latter in April of 2025.

In addition to testimony from the plaintiffs, the judge heard from several witnesses, including operator of the IERA2 program Rayanna Binder, IHCDA Director of Program Integrity, and NLIHC Manager of State and Local Innovation Outreach, Tori Bourret. Program administrators testified to the fact that IHCDA would have run out of funds for counseling services by April.   

Because counseling services were a requirement for IERA2 and Treasury guidance permits only 10% of ERA2 funding to be used for housing services outside of direct assistance; applicants would have been unable to receive aid under Indiana’s guidelines. Binder also claimed that it would be nearly impossible to resume the program now that so much work has been done towards its closure. In her testimony, Tori said that counseling is not a standard requirement, and programs that still have funding available will operate until the September 30, 2025 deadline. ERA2 programs have until September 30 to obligate funds and can make payments up to 120 days after the deadline.  

Judge Blaiklock described the counseling claim as a matter of statutory ambiguity and said that the court was not convinced of its illegality at the time. In the court’s opinion, applicants seeking a second round of assistance are required to undergo counseling. Whether IHCDA would be able to resume the program and disburse funds was another point of contention. IHCDA claimed that it could process applications through March 28, 2025, and disburse assistance through June, which totals about 10 weeks of program operation. The court reasoned that if the program were to resume in June, it would take a month to get everything back in order, and ten weeks later would be mid-September, meaning there would still be time to pay claims.  

As of May 31, 2025, Marion Superior Court 11 ruled that IHCDA must reopen the IERA2 program. They must process applications sent as of March 21, 2025, and should continue processing for as long as funding allows. The court also ruled that IHCDA cannot send any IERA2 funds (currently $20,889,222.08) to the federal government until the program reaches the ERA2 deadline of September 30, 2025. It was decided that the housing counseling requirement was not an irrational measure. Since the IHCDA appealed the decision, the court order is on hold at least until early July. 

“Cadence, Muriel, and Lisa did an amazing job of telling their stories to the judge, putting a human face on what could otherwise have been an abstract law and budget-focused hearing,” Quigley said. “They have given a chance for themselves and thousands of others to get much-needed rental assistance instead of those funds just being sent back to the federal government unspent. Tori’s guidance about the program rules and NLIHC’s tracking of program performance provided a huge benefit to the judge and the attorneys.” 

In Indiana, 27% of renters are extremely low income (ELI), and 74% of ELI renters are severely cost-burdened. The resumption of IERA 2 will surely help struggling citizens remain stably housed.  

For more information on this case, please reach out to Tori Bourret at [email protected].