The U.S. Department of the Treasury published on January 6 a final rule on the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program established under the “American Rescue Plan Act” and an overview of the final rule. The final rule presumes that an expanded set of households and communities are “impacted” and “disproportionately impacted” by the pandemic, allowing SLFRF recipients to assist a broad set of individuals and households without requiring additional analysis. Further, the final rule expands the list of eligible uses of SLFRF funds, including allowing affordable housing development, permanent supportive housing, and other efforts to improve access to stable, affordable housing for individuals who are homeless to be made available for “impacted” (not just “disproportionately impacted”) households and communities.
NLIHC previously weighed in on Treasury’s Interim Final Rule governing the implementation of SLFRF program through a comment submitted on June 17 (see Memo, 6/21/21) and a letter on September 17 (see Memo, 9/20/21). NLIHC urged Treasury to issue clear guidance on how communities can use SLFRF funds to meet the housing needs of the lowest-income renters most severely impacted by the affordable housing crisis and the COVID-19 pandemic.
The final rule takes effect on April 1, 2022, but recipients can choose to take advantage of its flexibilities and simplifications now. Recipients may consult the “Statement Regarding Compliance with the Coronavirus State and Local Fiscal Recovery Funds Interim Final Rule and Final Rule” for more information on compliance with the interim final rule and the final rule.
Overview of Major Changes
- Expands households and communities presumed to be “impacted” and “disproportionately impacted”: Treasury’s final rule establishes an eligibility standard to make it easier for recipients to assist low- and moderate-income populations without needing to identify and document a specific negative economic impact. Populations falling under the definition of low income are presumed to have been disproportionately impacted by the pandemic, while those falling under the definition of moderate income are presumed to have been impacted by the pandemic. See Treasury’s tool for determining low- and moderate-income households. Further, the final rule allows recipients to identify impacted and disproportionately impacted beneficiaries based on their eligibility for other programs.
- Addresses concerns about Qualified Census Tracts (QCTs): Treasury’s interim final rule presumed housing investments were an eligible use of funds when provided in QCTs, to individuals living in QCTs, by tribal governments, and to other disproportionately impacted populations, households, or geographic areas. NLIHC urged Treasury to allow housing investments in any community – not just QCTs – as long as the homes are affordable to households with the lowest incomes. Treasury’s final rule recognizes that QCTs do not reflect all underserved populations. While the final rule maintains that households residing in QCTs are presumed to be disproportionately impacted, it allows grantees to presume that low-income households are disproportionately impacted, providing greater flexibility to serve households and communities in need of assistance.
- Expands housing programs for impacted communities: Several uses included in the interim final rule for disproportionately impacted communities have been moved from “disproportionately impacted” to “impacted households” in the final rule. These include programs or services that address housing insecurity, lack of affordable housing, or homelessness. Permanent supportive housing or other programs to increase access to housing among individuals who are homeless, and the development of affordable housing are now available to impacted communities, not only those that were disproportionately impacted. Housing vouchers and assistance relocating to neighborhoods with higher levels of economic opportunity remain in the category of uses for “disproportionately impacted” households.
- Provides further information on eligible affordable housing projects: In addition to programs and services, the final rule clarifies that recipients can use SLFRF funds for capital expenditures that support an eligible COVID-19 public health or economic response, including building certain affordable housing. Treasury presumes that any projects that would be eligible for funding under the national Housing Trust Fund (HTF) or the Home Investment Partnerships Program (HOME) are eligible uses of SLFRF funds. These programs, however, use different income limits than the definition adopted by Treasury. Alignment with these programs is intended to provide recipients “comfort and clarity” as they design and implement a variety of affordable housing activities, including production, rehabilitation, and preservation of affordable rental homes, and in some case, affordable homeownership units.
To learn more about the SLFRF program and the final rule, see NLIHC’s fact sheet: https://bit.ly/3zztxad
Read Treasury’s final rule at: https://bit.ly/3HGIJoQ
Read Treasury’s overview of the final rule at: https://bit.ly/3F5THSU