U.S. Department of the Treasury

In some situations, applicants may not have a current lease or rental arrears. They may only be seeking assistance for future rent. Often, in order to obtain a rental agreement, the applicant will need proof that they will be able to pay a security deposit and future rent.

FAQs 7, 8, 9, 10, and 35 all address prospective rent. FAQ 8 clarifies:

The statutes establishing ERA1 and ERA2 permit the enrollment of households for only prospective benefits.

And FAQ 7 addresses prospective relocation and security deposits:

For both ERA1 and ERA2, other expenses related to housing include relocation expenses (including prospective relocation expenses), such as rental security deposits, and rental fees, which may include application or screening fees.

Similar to how a bank may provide a pre-approval letter for a loan, a grantee may provide documentation to applicants which states that the applicant is preliminarily qualified or approved for rental assistance based on their application for assistance and specifies the amount of financial assistance the ERA grantee will pay a landlord on behalf of the household if the landlord and household enter into a qualifying lease. This documentation may be used as a commitment letter to induce a landlord to enter into a new rental agreement with an eligible household and can help applicants in a variety of situations.

Advantages to using this practice

Having proof of preliminarily qualified or approval for rental assistance can help several populations who have a high need for rental assistance. Examples of those who may be served by this practice include:

• Eligible households who are currently unhoused
• Eligible individuals transitioning from incarceration or foster care
• Eligible individuals escaping domestic violence and seeking new housing
• Eligible households with an expiring lease
• Eligible households with “month-to-month” agreements

By implementing this practice, the program can reach those who are in need and not in a traditional lease situation. This practice can also create a more equitable program by serving populations who are more likely to be without a current lease and are at risk of experiencing homelessness or housing instability.

Steps to take

1. Prepare a document that can be provided to landlords

   Ideally, the document:

   • Is on the ERA grantee’s official letterhead and shows the tenant's name and the preliminarily qualified or approved amount of financial assistance available.
   • Clarifies that assistance can be used for security deposit, application fees, and current and prospective rent.
   • Has clear contact information for the landlord to reach a designated point of contact at the ERA program office. For example, the state of Vermont not only provides a phone number, but also details the operating hours of the call center.

2. Create an interactive screener

   The screener should include eligibility questions and the ability to if the applicant is eligible.

3. If the applicant is preliminarily qualified for assistance, allow the applicant to download and print the prepared document that shows they are eligible for rent assistance

   • The state of Rhode Island provides a letter addressed to the applicant and instructs them to print the letter to show prospective landlords.
   • The city of Denver provides a letter addressed to the landlord/property owner and confirms that the tenant has applied to the ERA program and is preliminarily qualified or approved to receive assistance.

Considerations

• Reach out to organizations that work with populations who may benefit from this flexibility.
• Conduct research with landlords to gauge acceptability of a commitment letter and make adjustments based on findings.
• Consider the availability of affordable housing stock in the program’s jurisdiction. While this may work well in certain areas, in areas with low availability of affordable housing prospective tenants may be dealing with availability as their primary barrier to stable housing. Northern Circle Indian Housing Authority works proactively with landlords to receive notification of available units as soon as they become vacant.
• Track metrics around this feature.

Examples

The state of Connecticut

The state of Connecticut uses a self-service pre-eligibility survey tool, accessible on the UniteCT website, as a form of documentation that tenants may show a landlord to demonstrate that they are eligible for assistance. This practice may help applicants who are currently unhoused and therefore do not have a current rental agreement. It may also help applicants that face eviction and need more immediate proof of future rental assistance while they wait for their application to be processed.

The state of Colorado

The state of Colorado makes available to their grantees a commitment letter that clearly states how much will be paid out to the landlord. The form has placeholders for the actual dollar amount that will be paid for three months rent, estimated average utilities, security deposit, additional three months rent, and rental application fees. This makes it very clear how much the landlord will be able to receive by accepting the application of a potential tenant that will be receiving assistance with ERA funds.

The city of Denver

The city of Denver provides a Letter of Intent to Provide Rental Assistance. The letter is addressed to the landlord/property owner and confirms that the tenant has applied to the ERA program and is eligible to receive funds to cover the costs of the security deposit, application fees, current and prospective monthly rent, and other reasonable expenses related to housing as described in the rental agreement. It also includes a link and contact information for the landlord to fill out their part of the application or if they have questions.

The state of Rhode Island

The state of Rhode Island provides a letter addressed to the tenant. The letter states that the applicant has successfully submitted their application and that they qualify for assistance with a security deposit and up to three months of prospective rent. It also informs them that they have 90 days from the date on the letter to secure a unit and instructs them to print out the letter to show potential landlords as evidence of their ability to provide a security deposit and first month’s rent. They also include a phone number that prospective landlords can call to learn more about the program.

The state of Vermont

The state of Vermont provides a letter of intent addressed to the tenant. The letter states that the applicant has been preliminary approved for assistance. The letter details that the applicant is approved for a fair market rent amount, set number of bedrooms, and specific county in Vermont. The applicant has 90 days from the date of letter issuance to find a unit. The letter also includes links to eligibility requirements and to an explanation of fair market rents in Vermont, along with a phone number to call for further assistance.

Alternative Example

Northern Circle Indian Housing Authority (NCIHA)

NCIHA is a Tribally Designated Housing Entity that works on behalf of seven Federally Recognized Tribes in Northern California to carry out housing related programs. Rather than provide applicants with a commitment letter, NCIHA works directly and proactively with prospective tenants, private landlords, and property managers to house members who do not have a current lease.

NCIHA connects members who are unhoused with landlords and utilizes ERA funding to help those tenants get a start on their new housing. NCIHA builds trust with landlords by providing additional support beyond rent, such as financial counseling, to prospective tenants, ensuring they will experience increased housing stability. By taking a holistic and human-centered approach to program management, NCIHA has been able to secure new leases for over 100 individuals who were previously unhoused.

What’s next

Make sure landlords are willing to accept the documentation presented

• If an applicant is preliminarily qualified or approved for assistance but the landlord they are working with is not accepting the documentation, how might the program support that applicant? What should the applicant do in this case?
• If a large number of landlords are not accepting the documentation, what might be changed to improve the acceptance rate? Does the documentation need to appear more formal? Does it need to include contact information?

Make sure potential applicants are aware of this feature

• Are the most vulnerable populations aware of this information?
• What kind of outreach is in place? In Denver, CO, the Department of Housing Stability has a reviewer proactively determine the need for a letter, customizes the letter, and delivers it to the applicant.

How it connects to your program’s heath

Part of program integrity is making sure the right people are getting access to ERA assitance. Equity recognizes that different people are in different circumstances, and some of those people will need the ability to prove they can access future rent assistance in order to be stably housed. This practice opens up the opportunity of helping those in that circumstance.