New Federal Law Will Provide More Housing Relief
There’s a lot of good news in the COVID Relief package
Congress passed a COVID Relief package as part of the omnibus funding package on December 21 and it was signed into law on December 27, 2020.
The Relief package includes $25 billion in emergency rental assistance that will provide an estimated $375 million to Minnesota from the federal government. The new emergency rental assistance program has several key differences from the previous COVID-19 Housing Assistance Program that Minnesota Housing offered, which requires more time to evaluate. There are significant details and timing-related issues that need to be resolved, and we do not yet know when the funding will be available for renters to access. The high-level summary of the anticipated new program includes:
  • The State of Minnesota will receive at least 55% of the total funding, and cities and counties with populations above 200,000 can receive direct funding for up to 45% of the total. We are waiting for more information about how the distribution will work.

  • Subject to funding availability, the assistance is expected to be available for past-due and prospective rent for three months at a time, for up to 12 months. The assistance is for low-income renter households at or below 80% of area median income (AMI), with a priority for households below 50% AMI and households that have been unemployed 90+ days.

  • Eligible rental assistance expenses, which we expect will use at least 90% of the funding, will likely include rent, utilities, rent and utility arrears, and other direct rental housing related costs. The remaining 10% of the funding will likely be available for administrative costs and case management and other service costs, although much remains to be determined in this area.
     
  • This is a one-year program, with funds expected to be spent by September 30, 2021 and a spending deadline of December 31, 2021.
Click the button below to sign up to receive updates on the anticipated new emergency rental assistance program.
Sign Up for Emergency Rental Assistance Program Updates
Other provisions in the law that we are excited about:
  • The bill includes a provision to fix the floor of valuation of the 4% Low-Income Housing Tax Credit to 4%. We have been advocating for this provision for a number of years. Minnesota’s full Congressional delegation supported this provision when it was proposed in the Affordable Housing Credit Improvement Act. Fixing the floor valuation of the 4% Low-Income Housing Tax Credit will give more certainty to developers of the value of the equity the tax credit will bring to the project and may ultimately create more affordable units as a result.

  • The bill also includes a provision to allow Tribal Entities to access Continuum of Care homeless resources. This is legislation that was introduced by Senator Tina Smith last year after hearing about this need at the Tribal Housing Conference and through various listening sessions on housing across the state last year. We are happy about this expanded access to critical homeless resources for our Tribal partners.

  • The bill also includes a 1-year extension of the CARES Act Coronavirus Relief Fund (CRF) funding deadline through December 31, 2021, which may help with administration of Minnesota Housing’s 2020 housing assistance program. The COVID-19 Housing Assistance Program is anticipated to be fully subscribed and remains closed to new housing assistance applications.

  • The bill extends the federal Centers for Disease Control and Prevention (CDC) eviction moratorium through January 31, 2021; however, at this time the Minnesota moratorium on evictions remains in place and has broader coverage than the federal moratorium. 
While many details need to be resolved in the coming weeks, we are excited that Congress has acted to provide direct rental assistance to help individuals and families pay their rent, as well as assistance to landlords and property owners to pay their bills. Minnesota Housing will share updates as we know more about how funding will be made available.  
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