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 along with increased appropriations for several existing programs that address the energy efficiency of homes.[1]  

Promoting increased home ownership among low-income residents

The Department of Housing and Urban Development (“HUD”) has released a fact sheet which outlines housing-related opportunities contained within the ARP.[2] The U.S. Department of Treasury (“Treasury”) will administer the newly created Homeowners Assistance Fund (“HAF”) Program. Created in Section 3206 of the ARP, HAF will make funds available to state, territorial and tribal governments for the following allowable purposes: 

“(1) ESTABLISHMENT; QUALIFIED EXPENSES.—There is established in the Department of the Treasury a Homeowner Assistance Fund to mitigate financial hardships associated with the coronavirus pandemic by providing such funds as are appropriated by subsection (a) to eligible entities for the purpose of preventing homeowner mortgage delinquencies, defaults, foreclosures, loss of utilities or home energy services, and displacements of homeowners experiencing financial hardship after January 21, 2020, through qualified expenses related to mortgages and housing, which include— 

(A) mortgage payment assistance; 

(B) financial assistance to allow a homeowner to reinstate a mortgage or to pay other housing related costs related to a period of forbearance, delinquency, or default; 

(C) principal reduction; 

(D) facilitating interest rate reductions; 

(E) payment assistance for— 

(i) utilities, including electric, gas, home energy, and water; 

(ii) internet service, including broadband internet access service, as defined in section 8.1(b) of title 47, Code of Federal Regulations (or any successor regulation); 

(iii) homeowner’s insurance, flood insurance, and mortgage insurance; and 

(iv) homeowner’s association, condominium association fees, or common charges; 

(F) reimbursement of funds expended by a State, local government, or designated entity under subsection (f) during the period beginning on January 21, 2020, and ending on the date that the first funds are disbursed by the eligible entity under the Homeowner Assistance Fund, for the purpose of providing housing or utility payment assistance to homeowners or otherwise providing funds to prevent foreclosure or post-foreclosure eviction of a homeowner or prevent mortgage delinquency or loss of housing or utilities as a response to the coronavirus disease (COVID) pandemic; and 

(G) any other assistance to promote housing stability for homeowners, including preventing mortgage delinquency, default, foreclosure, post-foreclosure eviction of a homeowner, or the loss of utility or home energy services, as determined by the Secretary.”[3]

This list of allowable activities addresses many of the issues and barriers to homeownership among low-income residents. While municipalities are not eligible to directly receive HAF program funding, municipalities may consider coordinating with their state housing agency to inquire about potential partnership opportunities; this type of funding may possibly be leveraged to serve local communities.   

Increasing energy efficiency in homes

The ARP does not include an exhaustive list of programs focused on increasing energy efficiency. However, the ARP does include additional appropriations for the Low-Income Home Energy Assistance Program (“LIHEAP”) and the Low-Income Household Water Assistance Program (“LIHWAP”).[4]  LIHEAP, State Energy Programs, and the U.S. Department of Energy’s Weatherization Assistance are potentially valuable tools to address residential energy efficiency and to make utilities more affordable.

The Coronavirus State and Local Fiscal Recovery Fund (“CSLFRF”), which will also be administered by Treasury, is the primary programmatic tool to address issuers surrounding homeownership and energy efficiency. The CSLFRF provides municipalities with significant programmatic discretion in determining how to allocate funds for these purposes. Section 603(c)(1) outlines the allowable uses of funding, which include revenue replacement and capital investments.[5] Moreover, in contrast to the Coronavirus Relief Fund (“CRF”) which allowed costs incurred between March 1, 2020 and December 30, 2020,[6] the CLFRF establishes a longer covered period, which allows municipalities to obligate CSLFRF funds until December 31, 2024.[7] 

Along with consulting the initial Treasury guidance for determining allowability of specific programmatic ideas under the CLFRF, 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, the recently updated Treasury guidance added flexibilities related to Qualified Census Tracts (“QCT”). Both the Interim Final Rule (“Rule”) and the associated Frequently Asked Questions (“FAQ”) give municipalities flexibility as to how to address the disproportionate impacts of the COVID-19 pandemic. These communities are generally defined by those that exist in qualified census tracts,[8] but can be specifically defined and justified by the local municipality. In particular, FAQ #2.11 identifies eligible services allowable including items like home ownership and energy efficiency:

  • “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;
  • Addressing educational disparities exacerbated by COVID-19, including: early learning services, increasing resources for high-poverty school districts, educational services like tutoring or afterschool programs, and supports for students’ social, emotional, and mental health needs; and
  • Promoting healthy childhood environments, including: child care, home visiting programs for families with young children, and enhanced services for child welfare-involved families and foster youth.”[9]

Finally, the FAQs state that CSLFRF may be used for services for providing housing stability and/or aid eligible households to maintain or obtain housing. These services can include “housing counseling, fair housing counseling, case management related to housing stability, outreach to households at risk of eviction or promotion of housing support programs, housing-related services for survivors of domestic abuse or human trafficking, and specialized services for individuals with disabilities or seniors that supports their ability to access or maintain housing.”[10]

Last Updated: June 30, 2021

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

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

[3] American Rescue Plan Act of 2021, H.R.1319, 117th Cong. § 3206, at 61, available at:  

[4] Id. at § 2911, 2912, at 48, available at:

[5] Id. at § 9901(amending 42 U.S.C § 801 et seq.), at 228, available at:

[6] Coronavirus Aid, Relief, Economic Security Act (CARES Act), Pub. L. No. 116-136, 134 Stat. 281 (2020), at 223, available at:

[7] American Rescue Plan Act of 2021, H.R.1319, 117th Cong. § 9901 (amending 42 U.S.C § 801 et seq.), at 228, available at:

[8] Office of Policy Development and Research, “2020 and 2021 Small DDAs and QCTs,” available at:

[9] Coronavirus State and Local Fiscal Recovery Funds, Frequently Asked Questions (as of June 24, 2021) – FAQ #2.11, at 6, available at:

[10] Id. at 12, FAQ #2.21.