New COVID-19 Aid Package Includes Rental Assistance

by | Dec 21, 2020 | Rental Property Management Tips

Congress is set to pass the long-awaited second stimulus and COVID-19 relief package. This time, the bill includes $25 billion in funding for rental assistance to help support landlords and tenants.

The new measure comes as an estimated 12 million renters will owe $6,000 or more in back rent and utilities by the end of the year.

According to the National Multifamily Housing Council’s weekly rent tracker, 75% of renters paid by December 6, representing a 7.8% drop from the same day last year, and a 5% drop over November 6 2020.

The new package also includes a direct cash stimulus of $600 per adult and child below a $75,000 income threshold and $300 per week in enhanced unemployment insurance for 11 weeks. Funding is provided for food subsidy programs and childcare, which may allow some tenants to put more money toward rent.

Congress plans to appropriate $319 billion for employers, including an extension of the Paycheck Protection Program (PPP)and Economic Injury Disaster Loans (EIDL). It is hoped that this small business support will put more renters back to work.

Text of the nearly 6,000-page bill was released only Monday afternoon, leaving Congress to vote on the package without reading it by Monday night. Details that are currently available indicate that the rental assistance funding will go to individual states which will dole out the money based on priorities such as household income. At least 90% of the funding must be applied to rent, rent arrears, and utilities or other household expenses.

Eligible tenants will be those with incomes at or below 50% of the area median, where one or more household members has been unemployed for 90 days. The rent supplement will be available for 12 months, until December 31, 2021. Because it can be difficult to inform tenants of their rights to rental assistance, the bill allows for landlords to assist tenants by applying for the funds on their behalf.

In addition to the rental assistance funding, Congress has extended the federal ban on evictions for nonpayment of rent until January 31, 2021.

This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks , and Eviction Reports (U.S. only).

Click Here to Receive Landlord Credit Reports.

Disclaimer: The information provided in this post is not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.

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