Groups that have received federal rental assistance and have not yet used a certain portion of it may soon see the funds revoked by the U.S. Department of the Treasury and redistributed elsewhere, according to new guidance released by the department on Monday.

Despite robust funding, distribution of the Emergency Rental Assistance funds has been a bit disorganized and chaotic, resulting in slow-to-be-released funds. Renter and landlords alike have complained about the delays and red tape involved in obtaining the assistance, many declining them altogether.

While the Treasury is in charge of the program, individual state, county and municipal governments, as well as charitable organizations, were primarily left with the challenge of creating their own systems for distributing the aid on a moment’s notice amidst overwhelming demand.

Under the new guidance, grantees of the program who had not designated to recipients at least 65 percent of their funds received from the program as of Sept. 30 must provide the Treasury with an improvement plan by Nov. 15 explaining how they will distribute more funds. These groups will also need to report back on their plan’s progress within 60 days.

Those groups that have not spent or obligated at least 30 percent of their funds received may have that money taken away to be given to other areas in need.

According to Treasury officials, the new guidance aims to get rental assistance funds into the hands of renters who need it more quickly. Groups might also voluntarily return the funds to the Treasury, if they choose, with the goal of reallocating it within the same state, territory or tribal area.

In mid-September, the Treasury reported that it had disbursed over $5 billion in Emergency Rental Assistance within the first six months of rolling out the American Rescue Plan.

In upcoming months, the Treasury also noted that it would reassess the proportion of funds needed to be distributed by groups every few months and increase the amount every month.

Email Lillian Dickerson

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