U.S. Department of the Treasury

Summary of Emergency Rental Assistance (ERA2) Reallocation Guidance

March 30, 2022

This document explains the structure of the Treasury Department’s approach to reallocating 

funds for the second Emergency Rental Assistance Program (ERA2) under the Reallocation 

Guidance issued in March 2022. The Guidance’s central goal is to help more people stay in their 

homes and avoid eviction by speeding up the delivery of assistance to tenants and landlords in 

need. 

Treasury will carry out the statutory requirement to reallocate funds to accomplish this goal in 

three ways: 1) make more resources available to high-performing grantees based on need, (2) 

incentivize increased spending on ERA2 eligible uses through adoption of best practices among 

grantees to help them streamline and improve their processes and the dedication of other funds to 

meet the significant need relative to funding available for rental and utility assistance, and (3) 

work to ensure funds do not go unused by programs unwilling or unable to assist struggling 

renters and landlords. 

The Guidance covers the major aspects of how these funds will be reallocated, including the 

following:

• Grantees who have insufficient expenditure ratios—a measure of funds actually 

spent providing assistance to eligible households—will face reallocation. Grantees 

with expenditure ratios below 20% as of March 31, based on the program data they 

submit to Treasury, will be determined to have “excess funds” subject to potential 

reallocation. Specifically, a grantee with an expenditure ratio below 20% will be 

determined to have excess funds equal to the difference between its reported 

expenditures and the amount of expenditure needed to reach the 20% threshold. 

• A Grantee with both inadequate obligations and insufficient expenditures will have 

two ways to mitigate the amount that Treasury would otherwise reallocate as a 

result of this first assessment. 

o The grantee can avoid reallocation if, based on data submitted to Treasury 

reflecting expenditures as of April 30, it has achieved an expenditure ratio is at 

least 20%. Otherwise, excess funds will be calculated based on the difference 

between its reported expenditures as of March 31 and the amount of expenditure 

needed to reach the 20% threshold.

o Further, grantees will avoid reallocation if they have made voluntary 

reallocations of ERA1 funds in at least the amount of 25% of their ERA1

allocation. 
• After the first assessment, Treasury will assess each grantee’s expenditure ratio on 

a quarterly basis. The expenditure ratio threshold used to calculate excess funds will 

rise by 20 percentage points each quarter (for example, the threshold as of June 30 will 

be 40 percent). As of December 31, 2022, any unpaid funds may be designated as excess 

funds and be reallocated, helping to ensure that funding does not go unused and is 

appropriately used in the emergency context. Under the ERA2 statute, funds paid to a 

grantee (based on the grantee having achieved 75% obligation of funds disbursed to 

date) may not be reallocated. 

• Treasury expects to distribute reallocated funds after each quarterly assessment, as 

warranted based on availability and confirmed need. Treasury will soon begin 

collecting requests from grantees for additional funds. These requests will be submitted 

on a standard form provided by Treasury that allows grantees to confirm and describe the 

needs in their communities. A grantee must have spent or obligated at least 50% of its 

own initial allocation to be eligible for reallocated funds. As excess funds become 

available, Treasury will prioritize, when feasible, requests from grantees in the same 

state where the funds were initially allocated. The remainder will be available for 

reallocation nationwide, with priority afforded to grantees already on track to expend 

ERA funds promptly. Treasury also intends to prioritize grantees that have dedicated a 

significant amount of non-ERA funds to rental or utility assistance substantially similar 

to assistance under ERA, including through the use of State and Local Fiscal Relief 

dollars for these purposes.

• A Grantee may also reallocate funds on a voluntary basis. A Grantee may request 

the transfer to other Grantees of up to 60% of its initial ERA2 allocation. The transferee 

Grantees must (i) administer an ERA2 program in the same state or territory as the 

transferor and (ii) have obligated or spent at least 50% of their own initial ERA2 

allocations by the time of transfer. A Grantee may request Treasury’s assistance in 

identifying permissible transferees. A Grantee may request the transfer of up to 60% of 

its initial ERA2 allocation, without designating any specific Grantee as transferee. 

Treasury, in its discretion, will determine and carry out the reallocation of these funds to 

Grantees.

As with Treasury’s ERA1 reallocation guidance, published on October 4, 2021, this guidance is 

intended to reflect Treasury’s commitment to ensure that funds are being used promptly to 

address the significant nationwide need in communities that need assistance, recognizing the full 

scope of need in many cases surpasses the amount allocated for assistance under Treasury’s 

Emergency Rental Assistance Programs.