Landlords Turn to Software, Services for ERAP Distribution

State and local governments seek various solutions to manage and administer the multi-billion dollar federal rental assistance program.

Faced with the daunting challenge of reviewing applications, approving requests and dispersing billions of dollars in federal funding aimed at helping residents and landlords catch up on pandemic-related unpaid rent, many states and local governments are turning to software providers, emergency management firms and advisory services companies to help them deal with requirements of the Emergency Rental Assistance Program.

Under the $25 billion ERAP, approved in December as part of the $900 billion Consolidated Appropriations Act 2021, every state gets at least $200 million. The funding can top more than $1 billion or $2 billion for the largest states like New York and California. Within each state’s total allocation, local governments and counties with more than 200,000 residents are also getting rent and utility relief funding, including New York City ($287.3 million), Los Angeles County ($160 million), and the city of Los Angeles ($118.3 million.) Funds are being provided directly to the District of Columbia, U.S. territories, Indian tribes, tribally-designated housing entities of Indian tribes and Department of Hawaiian Homelands.

This first tranche of federal funding does not include the $21.5 billion for ERAP and $5 billion in rental assistance vouchers in the $1.9 trillion American Rescue Plan Act approved earlier this month. Information on allocation of those funds has not been released.

How much states and the District of Columbia are to receive in the Emergency Rental Assistance Program established by the Consolidated Appropriations Act 2021, which was approved and signed into law in December 2020. Source: U.S. Department of the Treasury, Emergency Rental Assistance Program

ERAP will provide up to 12 months of rental and utility assistance for eligible households who owe back rent and utility payments incurred after March 13, 2020, due to the pandemic. Once rental and utility arrears are reduced, future rent and utility payments for up to three months at a time can be considered. If a resident in arrears does not apply, a landlord can but must have the renter’s permission and documentation.

Neighborly Software, which had been providing cloud-based turnkey solutions for housing, economic and community development programs for several years, pivoted quickly last year once the $2.2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act was approved and was handling client requests by early April, said Jason Rusnak, Neighborly president & co-founder.

Rusnak said last year governments were caught off guard and scrambled to find staff to administer the programs. One of the biggest differences between 2020 and 2021, he said, is they realize that’s not sustainable and are looking for technology and professional services. Neighborly has developed relationships with several firms like Tetra Tech, a consulting and engineering firm; Horne LLP, a CPA and business advisory firm; and CliftonLarsonAllen (CLA), a professional services network, as part of its ERAP offerings.

Neighborly learned from its early experiences with the CARES Act, Rusnak said. Keeping the process simple is key, he said, noting that at least 50 percent of the people will be filing their applications with their phones and will need to take pictures of and upload documents.

The firm has 49 ERAP clients and expects to add another 10 to 15 within the next month. Rusnak, who noted they have statewide contracts in California, Texas, Tennessee, Alabama and Colorado at this time, said they can be up and running with a customized portal within five days of getting a contract.

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