Affordable Housing Funds, Eviction Moratorium in 3rd Stimulus Package

Legislation | March 26, 2020 | by Linda Couch

Housing provisions in the third stimulus package include resources for HUD-assisted housing to pay for COVID-19-related costs as well as a 120-day moratorium on all evictions from federally-assisted housing, including in all HUD, USDA Rural Housing, and Low Income Housing Tax Credit programs.

Housing provisions in the third stimulus package include resources for HUD-assisted housing to pay for COVID-19-related costs as well as a 120-day moratorium on all evictions from federally-assisted housing, including in all HUD, USDA Rural Housing, and Low Income Housing Tax Credit programs.

Funds for HUD Housing

The package includes $50 million for Section 202 Housing for the Elderly to make up for reduced resident rent payments as a result of the coronavirus, maintain housing stability, and to help communities pay for costs associated with the coronavirus.

The funds are to be used to prevent, prepare for, and respond to the coronavirus. This includes funds to “maintain normal operations” and take “other necessary actions” and for “assistance to owners or sponsors” of the Section 202 program. The bill allows up to $10 million of the Section 202 account’s $50 million to be used for Service Coordinators and the continuation of existing congregate service grants. The Section 202 funds will remain available until September 30, 2023.

Additionally, the bill provides $1 billion for Project-Based Rental Assistance to prevent, prepare for, and respond to the coronavirus, including to provide additional funds to “maintain normal operations and take other necessary actions.” The bill’s PBRA funds will remain available until they are expended.

The bill includes $685 million to help public housing, $1.25 billion for tenant-based rental assistance (Housing Choice Vouchers), $4 million for homeless assistance, and $15 million for the Section 811 Housing for Persons with Disabilities program, among resources for other HUD housing programs. The bill also includes $5 billion for Community Development Block Grants, very flexible dollars that go to state and local governments. State and local governments can use these funds for a long list of things, including services for senior citizens, people currently experiencing homelessness, and public health services.

The bill’s language authorizes the HUD Secretary to waive or specify alternative requirements for any statute or regulation that the Secretary administers for these programs, except for those related to fair housing, nondiscrimination, labor standards, and the environment. HUD is working on a list of potential waivers.

Distribution of Funds

It is not yet clear how these funds will be distributed. In its March 25 call with stakeholders, HUD’s Office of Multifamily Housing said that HUD will put out guidance soon on how these funds will be accessed. For now, HUD officials said while noting they will not have any solid plan until the bill is enacted, it looks like HUD-assisted owners may be able to access these funds via the normal voucher process.

Moratorium on Eviction from Federally-Assisted Housing

The bill also includes a sweeping, 120-day moratorium on all evictions from HUD-, RHS-, and LIHTC-assisted communities and FHA-insured multifamily properties. The billalso stipulates that no late fees, charges, or penalties can be imposed on residents for nonpayment of rent or other fees. The bill also codifies policies put in practice by the Federal Housing Finance Agency and HUD’s Federal Housing Administration to protect their programs’ single family homeowners from foreclosure and evictions, as well as foreclosure and eviction suspensions for certain multifamily buildings with Fannie Mae and Freddie Mac-backed mortgages.

No Funding for Non-HUD Housing Programs

The bill provides no resources to assisted USDA Rural Housing Service multifamily programs address COVID-19 related costs or for RHS communities to withstand reductions resident incomes because of the coronavirus. Nor does the bill provide any such assistance directly to residents of Low Income Housing Tax Credits whose rents will remain the same even if their incomes decrease or evaporate because of quickly rising unemployment. LeadingAge is already working with House and Senate offices on a fourth COVID relief bill to address these and other large shortcomings in this bill.

Background on HUD rents, generally

About two-thirds of Section 202 communities get their rental assistance subsidy from the PBRA program, about one-third from the Section 202 account’s Project-Rental Assistance Contracts. In addition to rental assistance subsidy from HUD’s programs, senior affordable housing programs receive rent payments from residents each month. Generally, HUD-assisted residents pay about 30% of their adjusted income for rent. As residents’ incomes fluctuate, their rent also fluctuates; this ensures residents have stable, affordable housing. As the coronavirus altogether eliminates many peoples’ jobs or reduces their working hours significantly, the amount assisted housing owners will receive as rent payments from residents will decrease. The bill’s resources will allow HUD to increase the portion of overall rent subsidy that comes from HUD and help ensure owners are able to provide quality, affordable housing.