Treasury Department Introduces Triad of Moves to Bolster Affordable Housing  

5 min read

The U.S. Department of the Treasury has introduced new guidance and rule changes intended to bolster the nation’s supply of housing, especially affordable housing. 

Treasury expanded the affordable housing projects eligible for funds from the State and Local Fiscal Recovery Fund (SLFRF) and broadened guidelines for the Emergency Rental Assistance (ERA2) program to help bolster housing stock. 

In March, the Treasury Department updated its guidance for the SLFRF and ERA2 programs—funds authorized under the American Rescue Plan Act (ARPA)—broadening the eligibility of projects that can use the funds and allowing some ERA2 funds to be used for predevelopment and acquisition costs.  

Jennifer Schwartz

“We have been very pleased with the way Treasury has worked with us so we can try to address some of the housing supply challenges with these dollars,” explains Jennifer Schwartz, director of tax and housing advocacy for the National Council of State Housing Agencies (NCSHA). “We have a huge housing crisis, and we need to bring every program and resource we can to address that.” 

Treasury also agreed with the Department of Housing and Urban Development to indefinitely extend the Federal Financing Bank’s (FFB) financing support for a risk-sharing initiative between HUD and state and local housing finance agencies. (See Risk-Sharing Initiative Extended Indefinitely) The move is intended to lower the cost of capital for some low-risk housing developments. 

Types of Properties Eligible for SLFRF Funds Expands 
The new Treasury guidelines expand the range of properties eligible for SLFRF funds, including allowing funding for properties whose residents earn up to 120 percent of the area median income (AMI). Previous SLFRF guidelines restricted the use of funds to projects serving households earning up to 65 percent AMI. The former guidelines also restricted funding to programs that met the requirements of the HOME Investments Partnerships Program (HOME), Housing Credit and Housing Trust Fund programs and others. 

Under the new guidelines, projects presumptively eligible to receive SLFRF funds include Project Based Vouchers, Choice Neighborhoods, Section 108 Loan Guarantees, U.S. Department of Agriculture rural housing programs, projects housing families earning up to 120 percent AMI as long as they remain affordable for at least 20 years, and properties supported by Fannie Mae and Freddie Mac that meet the needs of workers priced out of certain housing markets. 

“Anything that makes it easier to (fund affordable housing) is good,” says Schwartz. “But we are really working against the clock. All dollars need to be obligated by the end of the calendar year…many of the governmental agencies are making the final decisions now.” 

Schwartz says that the major change from the Treasury Department came in the Summer of 2022 when it announced that it would allow the SLFRF funds to be used for low-income housing. 

“That was a game changer,” she says. “It was billions of dollars that we were able to use with housing credit equity to finance properties. It helped a lot of properties that due to cost overruns and delays, were not penciling out…it was a huge step forward.” 

Schwartz says the most recent changes are not as huge as the ones in 2022 but certainly are helpful. She says local governments are making different decisions on how to use the funds, which is “a little challenging from the developers’ perspective.” 

ERA2 Funds Can Now Be Used for Predevelopment Activities 
The Treasury Department also updated its guidance for Emergency Rental Assistance (ERA2) funds for affordable housing production, broadening their use to include the acquisition of real property and redevelopment activities. 

In September 2021, Treasury announced the release of more than $13 billion in ERA funds—dubbed ERA2—following the release of such funds earlier in the pandemic. Some $46 billion has been earmarked for the program. The first round of funds allowed communities to set up eviction prevention programs. The remaining ERA2 funds can be used for predevelopment activities on affordable properties and to aid the acquisition of real properties for affordable housing if they have obligated the first 75 percent of the funds for financial assistance, housing stability services and administrative costs. 

Eligible predevelopment activities include architectural and engineering design, planning, permitting, surveys, appraisals and environmental review. 

“Today’s announcements (of updated guidance) will help increase the supply of housing in communities across the country and strengthen housing security for all Americans,” stated the Treasury Department press release announcing the expansion of the use of the funds. 

Schwartz says the use of the funds for predevelopment activities is “in practice now.” 

She says the deadline for the use of the funds is the end of September 2025.  

Accessing Eligible Funds
Housing advocates say much of the funds have been depleted, so immediate action should be taken. 

To apply for the State and Local Fiscal Recovery Funds (SLFRF), you can follow these steps: 

  1. Visit the official U.S. Department of the Treasury website for the SLFRF program
  1. Review the updated Frequently Asked Questions (FAQs) and other self-service resources available on the site to understand the eligibility criteria and the application process. 
  1. If you represent a local government, check if your entity is considered a non-entitlement unit of local government, as different rules may apply. 
  1. Ensure that you have an account on the Treasury Submission Portal.  
  • If not, you’ll need to create one and may require login through services like or 
  1. Once you have access, you can submit a request for funding through the Treasury Submission Portal.  
  • Jurisdictions must submit a funding request even if they have previously applied for other programs through the portal. 
  1. Keep an eye on the email address provided during the submission for further communications regarding the status of your application. 

    For specific guidance on the submission process or if you encounter any issues, the Treasury Department provides detailed instructions and support resources on its website.  

    For more information visit, AFFORDABLE HOUSING HOW-TO GUIDE ( 

    Source: U.S. Department of the Treasury 

Pamela Martineau is a freelance writer based in Portland, ME. She writes primarily about housing, local government, technology and education.