Tenants can be in line for $53 million in stimulus aid — but at a state’s expense

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Funds for rent relief are always available. But that’s partly because some states are seeing their aid withdrawn.

Key points

  • The federal government is reallocating rent relief funds to states that need the most help.
  • In doing so, it takes funds away from states that have not spent enough dollars on rent relief.

When the COVID-19 outbreak first broke out, it led to a massive wave of jobless claims. Without healthy savings accounts, many Americans quickly fell behind on essential bills, including housing payments.

Protections were put in place at the start of the pandemic to prevent people from losing their homes. Landlords were allowed to suspend their mortgages, while an eviction ban prevented landlords from evicting tenants for non-payment of rent.

At this point, both protections have largely expired. But fortunately, there are still rent relief funds available for tenants who have not yet updated their housing payments.

In fact, the federal government could soon allocate an additional $53 million in rent relief funds to states that need the most help. But this money is being taken back from a State that has been too slow to grant this aid.

Montana residents could be losers

Montana has, to date, received $352 million in rental assistance funds over two funding rounds. But the state has distributed just under $46 million, an average of $7,300 in assistance per household that has received assistance so far.

Because Montana was slow to disburse this aid, the federal government is now taking back much of it. And it’s not the only state where this is happening. On the contrary, Montana is one of 11 states losing aid due to what is called “excess” funding.

Montana received a $200 million award for rent relief in its first round of funding. But the state was required to allocate 65% of that money by last September to prevent some of those funds from being taken back. Because Montana failed to meet this requirement, it was forced to return $7.6 million in rent relief funds in December and another $45.3 million in February.

Fortunately, the state has until 2025 to spend the $152 million it was awarded in its second round of funding. But the state isn’t happy to lose that $53 million, especially as it resolves its backlog of rent relief claims.

The loss of one state is a gain for the other states.

While it’s unfortunate that Montana is losing rent relief funds, the good news is that those dollars are being reallocated to states in dire need of assistance due to a high percentage of renters. These include New York, New Jersey, California and Illinois.

Still, Montana officials say the state’s rent relief program is helping many residents. In addition, the State plans to launch an awareness campaign to encourage qualified tenants to apply for assistance.

Montana also directed some of its existing assistance to the state health department for Housing Stability Services. And he is actively working with the Montana Legal Services Association to identify tenants at risk of eviction.

Yet the state maintains that rent relief funds will only solve part of its current housing crisis — and the lack of affordable housing is an issue it continues to grapple with. Unfortunately, the rent relief funds Montana has received cannot be used to build affordable housing. But the state Department of Commerce is working on several projects that could help.

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