Treasury Announces New Actions to Increase Housing Supply

The U.S. Department of the Treasury (Treasury) announced new efforts on March 5 to increase housing supply. These actions include updated guidance for the State and Local Fiscal Recovery Funds (SLFRF) program, clarifications to the Emergency Rental Assistance (ERA) program to simplify the process of using remaining funds for affordable housing, and an extension of a risk-sharing initiative between HUD and state and local housing finance agencies to lower the cost of developing and preserving affordable housing. Treasury’s announcement builds on the Biden-Harris administration’s Housing Supply Action Plan, including new actions announced last week (see Memo, 3/4).

Treasury updated SLFRF guidance (FAQ 2.14) to enable state and local governments to use their remaining funds on more eligible housing projects. An affordable housing project will be considered an eligible use of funds if the project will serve households earning up to 120% of area median income – an increase from 65% – or if the project meets the terms of one or more of a dozen housing programs. States and localities can also fund projects supported by Fannie Mae and Freddie Mac that meet the needs of teachers, firefighters, nurses, and other workers.

Treasury updated its FAQs and sent a notice to ERA2 grantees clarifying that grantees that have obligated at least 75% of their ERA2 funds for financial assistance, housing stability services, or administrative costs can use the remaining funds for predevelopment and acquisitions costs for affordable housing serving very low-income families. This is in addition to other eligible uses, like construction, preservation, or rehabilitation of affordable housing. See FAQ 46.

Additionally, Treasury announced an extension of the Federal Financing Bank’s financing support for a risk-sharing initiative between HUD and state and local housing finance agencies to significantly lower the cost of capital for certain low-risk housing developments. Treasury estimates that tens of thousands of affordable homes will be developed or preserved through the initiative over the next decade.

Read Treasury’s press release at:

Learn more about the ERA program and access the updated guidance at:

Learn more about the SLFRF program and access the updated guidance at: