COVID-19 Federal Emergency Rental Assistance Program

Grantees must make reasonable efforts to obtain the cooperation of landlords and utility providers to accept payments.

Grantees are not required to obtain the cooperation of the landlord or utility provider before providing direct assistance to the tenant.

Grantees must prohibit landlords receiving ERA funds from evicting tenants during the period covered by assistance.

Grantees are encouraged to prohibit landlords receiving funds for rental arrears from evicting the tenant for nonpayment of rent for some period.

Up to 10 percent of the total amount paid to a grantee may be used for administrative costs related to providing financial assistance and housing stability services. Funds can be used for direct or indirect costs.

Up to 15 percent of the amount paid to a grantee may be used for administrative costs related to providing financial assistance, housing stability services and other affordable rental housing and eviction prevention activities.

Eligible households living in federally assisted housing may receive ERA assistance, as long as ERA1 funds are not applied to costs that have been or will be covered by other federal assistance.

Grantees are prohibited from refusing assistance to households solely on the basis that they live in federally assisted housing.

January 31, 2026

Definition of Obligated Funds

The Consolidated Appropriations Act of 2021 requires Treasury to identify any “excess” funds that have not yet been obligated by a grantee from their initial ERA1 allocation and to reallocate those funds to grantees that have obligated at least 65 percent. Obligated funds, as defined by Treasury in the new guidance, include those that:

• Have been spent to provide financial assistance or housing stability services
• Have been earmarked to pay for assistance promised in a commitment letter to a landlord in order to persuade them to enter into a rental agreement, as detailed in Treasury’s ERA FAQ #35
• Are needed to fulfill a contractual obligation in which assistance has been approved but not yet paid to a landlord or utility provider

Notably, as grantees may spend up to 10 percent of their ERA1 allocation on administrative costs, that percentage will automatically be considered as obligated by Treasury.

Grantees are required to submit an Obligated Funds Certification, detailing the amount of ERA1 funds obligated through September 30, 2021. Those grantees that have obligated less than 65 percent of their allocation by that date, or that do not submit a certification, will be required to submit a Program Improvement Plan to Treasury by November 15, 2021.

Identification of Excess Funds

In addition to the amount of funds obligated, Treasury will also assess grantees’ expenditure ratio every two months, beginning September 30, 2021. Treasury will determine a grantee’s expenditure ratio using the following calculation:

• The grantee’s total expenditure of ERA1 funds, as listed on interim and monthly reports to Treasury, divided by 90 percent of the grantee’s total ERA1 allocation.

If funds are recouped, the grantee’s total ERA1 allocation will be adjusted.

Treasury will conduct its ‘First Assessment’ of a grantee’s expenditure ratio using reporting data through September 30, 2021. Grantees’ whose expenditure ratio for the First Assessment is below 30 percent will be thought of as having excess funds. After the First Assessment, the minimum expenditure ratio will increase by 5 percent each month.

The amount of a grantees’ excess funds will be considered as the difference between:

• The amount of expenditures necessary for the grantee to achieve the minimum expenditure ratio; and
• The grantee’s total reported expenditures.

Treasury’s final assessment of grantees’ expenditure ratios will be based on data reported through March 31, 2022. Any remaining unobligated ERA1 funds identified by that date will be treated as excess funds.

Mitigating Factors for Excess Funds

There are three circumstances under which Treasury may reduce or not make a determination of excess funds, including if:

• There are exigent circumstances, such as a natural disaster;
• A grantee submits a certification stating that it has obligated at least 65 percent of its allocation, or that its expenditure ratio is at least 30 percent by November 15; or
• If Treasury approves a grantee’s Program Improvement Plan.

As stated above, grantees that have obligated less than 65 percent of their allocation by September 30, 2021, must submit a Program Improvement Plan to Treasury by November 15. If Treasury approves the plan, any reduction in the grantee’s excess funds determination may not exceed the amount of total assistance expenditures necessary for the expenditure ratio to equal 15 percent.

Returning Excess Funds to Treasury

If funds are deemed to be in excess following the First Assessment and each subsequent assessment, Treasury will notify a grantee in writing, providing instructions for the funds’ return. Grantees must return such funds within 10 days of receiving the notice.

Reallocation of Excess Funds

Grantees that have obligated at least 65 percent of their initial ERA1 allocation may begin to request access to recaptured funds beginning on October 15, 2021, using this form. To request reallocated funds during teh second round or reallocation, grantees must submit a separate form, available here, to Treasury's portal by January 21, 2022.

Treasury will assess each request based on the grantee’s ability to meet and exceed the minimum expenditure ratio as well as the grantee’s jurisdictional need for additional ERA funds.

• Dividing the grantee’s approved reallocation request by the aggregate amount of requested reallocated funds approved by Treasury; and
• Multiplying this percentage by the total amount of funds available for distribution.

Treasury will also endeavor to reallocate recaptured funds from one grantee to another within the same state.

Further, while grantees must obligate all ERA1 funds from their initial allocation by September 30, 2022, those grantees who receive a reallocation may request an extension through December 29, 2022.

Treasury will distribute reallocated funds based on the following priorities:

1. First, Treasury will prioritize requests for reallocated funds from grantees serving jurisdictions in the same state where the excess funds were initially allocated.
2. After these funds have been distributed, Treasury will then prioritize requests for reallocated funds from grantees that have spent nearly all of their ERA1 and ERA2 allocations. These grantees will be prioritized based on their expenditures. 
3. Remaining funds will be available in a single pool for reallocation nationwide. These funds will be distributed proportionally based on grantees' needs.

Voluntary Reallocation

Grantees can request to transfer some or all of their ERA1 allocation to another grantee that administers an ERA1 program within the same state and has obligated at least 65 percent of its own allocation beginning September 30, 2021. Grantees wishing to transfer their funds must submit a signed letter to Treasury that details the amount of funds they wish to reallocate and recommendations on how the funding could be redistributed to other grantees in the same state.

Administrative Expenses

Grantees may spend up to 10 percent of their initial ERA1 allocation on administrative expenses only if they have obligated at least 30 percent of that initial allocation for the provision of financial assistance and housing stability services by September 30, 2022. If they obligate less than 30 percent of their initial allocation for the provision of financial assistance and housing stability services, Treasury will conclude that the grantee's administrative expenses were not attributable to these activities and, as such, were not permissible uses of ERA1 funds.