COVID-19 Federal Assistance e311


Housing & Rental Assistance

May municipalities use ARP funds to promote increased home ownership among low-income residents or increase energy efficiency in homes?

The American Rescue Plan Act (“ARP”) of 2021 was signed into law on March 11, 2021, and includes numerous provisions directly related to increasing homeownership among low-income individuals and families. Provisions within the ARP also increase appropriations for existing programs that address the weatherization and energy efficiency of homes.[1]  

Promoting increased home ownership among low-income residents

Section 9901 of the ARP amended the Social Security Act by creating the Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”), administered by the U.S. Department of the Treasury (“Treasury”). The statute provides municipalities with significant programmatic discretion in determining how to allocate funds for these purposes. Treasury published its Final Rule to provide guidance about recipients’ use of this assistance, and the Final Rule contains two provisions that are particularly relevant to this question. 

31 Code of Federal Regulations (CFR) 35.6(b)(3)(ii)(A)(1) provides that this assistance can be used to: 

Respond…to the negative economic impacts of the public health emergency for purposes including: Assistance to households and individuals, including…emergency housing needsor weatherization…. [2]

In addition, 31 CFR 35.6(b)(3)(ii)(A)(5) authorizes the use of this assistance to:Develop…repair, and operat(e)…affordable housing and services or programs to increase long-term housing security….”[3] Therefore, it is clear that recipients of CSLFRF assistance, including municipalities, have substantial discretion to use this funding to address housing needs and energy efficiency in homes.

In addition to these provisions in the Final Rule, Treasury also elaborates on the issues raised in the question in the Supplementary Information discussion which accompanies the Final Rule. Treasury states:

the final rule presumes that an expanded set of households and communities are “impacted” or “disproportionately impacted” by the pandemic, thereby allowing recipients to provide responses to a broad set of households and entities….the final rule provides a broader set of enumerated eligible uses available for these communities as part of COVID-19 public health and economic response, including making affordable housing, childcare, and early learning services eligible in all impacted communities and making certain community development and neighborhood revitalization activities eligible for disproportionately impacted communities.[4]

Treasury also states in the Supplementary Information discussion:

In response to requests for elaboration on the types of eligible services for eviction prevention, Treasury has provided further guidance that these services includehousing stability services that enable eligible households to maintain or obtain housing, such as housing counseling, fair housing counseling, case management related to housing stability, outreach to households at risk of eviction or promotion of housing support programs.[5]

Treasury also notes in the Supplementary Information discussion that:

eligible services…include: rent, rental arrears, utility costs or arrears…mortgage payment assistance…mortgage principal reduction…. This eligible use category also includes emergency assistance for individuals experiencing homelessness….The final rule also clarifies and expands the ability of recipients to use SLFRF funds to address the general lack of affordable housing and housing challenges underscored by the pandemic.[6]

All of these points underscore the discretion that recipients have in using CSLFRF assistance to address housing needs and energy efficiency initiatives. 

Along with consulting the initial Treasury guidance for determining allowability of specific programmatic ideas under the CSLFRF, municipalities may also consider developing a high-level plan for addressing how they will utilize CSLFRF program funds to address barriers to home ownership and residential energy efficiency. The following is a non-exhaustive list of steps a municipality could take in developing this framework:

  • Conduct a comprehensive capacity assessment and unmet needs analysis; 
  • Form a cross-sector recovery oversight committee; 
  • Engage with the served community to identify key needs; 
  • Assess and catalog available funding to prioritize needs; and 
  • Develop short- and long-term strategies to implement ARP funds. 

In addition to the Final Rule and its Supplementary Information narrative, Treasury has also issued a series of Frequently Asked Questions (“FAQs”) to provide further guidance about the use of CSLFRF assistance. FAQs 2.5, 2.6, 2.11, 2.21, 4.7, and 4.8 all address this question, but perhaps most noteworthy among these FAQs are 2.11. FAQ 2.11 states in pertinent part:

  • Treasury will presume that certain types of services are eligible uses when provided in a Qualified Census Tract (QCT), to families living in QCTs….Eligible services include… Building stronger neighborhoods and communities, including: supportive housing and other services for individuals experiencing homelessness, development of affordable housing, and housing vouchers and assistance relocating to neighborhoods with higher levels of economic opportunity.[7]

In addition, FAQ 4.7 states in pertinent part:

Recipients may use Coronavirus State and Local Fiscal Recovery Funds to provide assistance to households – such as rent, mortgage, or utility assistance – for economic harms experienced or costs incurred by the household prior to March 3, 2021 (e.g., rental arrears from preceding months), provided that the cost of providing assistance to the household was not incurred by the recipient prior to March 3, 2021.[8]

In addition to the CSLFRF authorities discussed above, Subtitle B of Title III of the ARP contains several provisions that relate to the question. The Department of Housing and Urban Development (“HUD”) published a fact sheet that outlines housing-related opportunities contained within those provisions of ARP.[9] One of the most significant of these authorities in responding to this question is the newly created Homeowners Assistance Fund (“HAF”) Program, which is authorized by Section 3206 of ARP. HAF will make funds available to provide mortgage payment assistance and to promote housing stability. 

Increasing energy efficiency in homes

In addition to 31 CFR 35.6(b)(3)(ii)(A)(5), which (as noted above) authorizes the use of CSLFRF assistance to address weatherization needs, ARP includes additional appropriations to implement the Low-Income Home Energy Assistance Program (“LIHEAP”). LIHEAP was originally enacted in 1981 and helps low-income households with their home energy bills.[10]

Last Updated: February 16, 2022

[1] American Rescue Plan Act of 2021, H.R.1319, 117th Cong., available at:

[2] Treas. Reg. 31 CFR 35 at 418 (emphasis added), available at:

[3] Id., at 419 (emphasis added).

[4] Id., at 6-7 (emphasis added).

[5] Id., at 82 (emphasis added).

[6] Id.

[7] Coronavirus State and Local Fiscal Recovery Funds, Frequently Asked Questions (as of January 2022) – FAQ #2.11, (emphasis added), available at:

[8] Id., at FAQ #4.7, (emphasis added).

[9] Department of Housing and Urban Development, Fact Sheet: “Housing Provisions in the American Rescue Plan Act of 2021”, available at:

[10] American Rescue Plan Act of 2021 § 9901, Pub. L. No. 117-2, amending 42 U.S.C. § 801 et seq., at 2911, available at: