Team Members

July 16, 2021

In response to the COVID-19 pandemic and in furtherance of the goal of keeping families in their homes during this unprecedented time, the Emergency Rental Assistance program was designed to help individuals who are unable to make rental or utilities payments. The United States Treasury has paid out a total of $46.55 billion under two programs (ERA1 and ERA2) to states, territories, and local governments to be utilized for this purpose. Not only are these payments available for rent and utilities, but these payments can also be utilized for emergency rental assistance resources, security deposits and application fees, working with the courts in order to facilitate eviction diversion programs, paying past due rental payments, and helping currently homeless individuals gain access to housing.

Individuals may qualify for these payments by providing documentation of the following information: (1) they are obligated to pay rent on a residential dwelling; (2) one or more individuals within the home has qualified for unemployment benefits, experienced a reduction in income, incurred significant costs or financial hardship as a result of the COVID-19 pandemic, or demonstrate a risk of homelessness; and (3) either, depending on the program, the household income is less than or equal to 80% of the median income for the area or the household qualified as a low-income family under 42 U.S.C. § 1437a(b). Individuals may apply for assistance through their applicable state program. For instance, residents of Tennessee (other than Knox, Davidson, Rutherford, and Shelby County residents) must apply through the Tennessee Housing Development Agency, while residents of the counties listed above must apply through their individual county’s program. Residents of Knox County must apply through Knox Housing Assistance.

Pursuant to guidance issued by the I.R.S. on May 18, 2021, payments received by tenants as part of the Emergency Rental Assistance program will not be included in gross income. These payments are not included regardless of whether used for rent, utilities, or home energy expenses, or whether such payments were made directly to the tenant or to the landlord or utility provider. However, payment received on behalf of a tenant are still includable in the gross income of the landlord or utilities provider.

Co-authored by Attorney Bradley C. Sagraves and Attorney Kaitlyn A. Sell