Michigan has launched a new program to help renters who have fallen behind on payments due to COVID-19.
The Eviction Diversion Program (EDP) is being administered by the Michigan State Housing Development Authority (MSHDA) in collaboration with Michigan Supreme Court and Department of Health and Human Services.
The state’s eviction moratorium ended on Wednesday.
As part of the program, an allocation of $50 million was set aside to help tenants and landlords resolve eviction filings with conditional dismissals. Tenants making up to 100% of area median income are eligible for the rental assistance.
Participating landlords can receive up to 90% of a tenant’s unpaid rent in one lump sum. In exchange, landlords must dismiss all late fees, up to 10% of the amount due, and allow tenants to stay in their homes.
“At a time filled with a lot of uncertainty, the Eviction Diversion Program offers some peace of mind for tenants and landlords,” said Kelly Rose, MSHDA’s chief housing solutions officer. “We understand how important housing is as a foundation for success in many other areas of life. That’s why we’re committed to leveraging the EDP to preserve tenant housing in as many cases as possible across the state.”
Funding for the EDP comes from Senate Bill 690, which appropriated $880 million in federal dollars from the Coronavirus Aid, Relief and Economic Security (CARES) Act. The Senate bills called for $60 million to be set aside to establish a rental assistance program – of which $50 million will be dedicated to rental assistance with the remaining $10 million covering case management, legal, and administrative costs.
For more information on EDP and a list of HARAs by county, visit Michigan.gov/EDP.
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FAQ from MSHDA:
Q1: When will the Eviction Diversion Programs begin?
When the Michigan-wide moratorium on evictions is lifted on July 16, 2020, the Eviction Diversion Programs (EDP) will begin.
Q2: How is the Eviction Diversion Program being funded?
$60 million in Coronavirus Relief Funds (CRF) have been allocated. MSHDA will disperse the funds through grants to local Housing Assessment and Resource Agencies (HARA).
- $50 million for rental assistance
- $4 million for case management for Housing Assessment and Resource Agencies
- $4 million for legal services
- $2 million for administrative costs
Q3: I am a tenant being evicted from my rental. What do I do?
Reach out to your local Housing Assessment and Resource Agency (HARA). A list by county can be found here.
Q4: I am a landlord; how does the Eviction Diversion Program impact me?
By participating in this program, landlords can receive up to 90% of a tenant’s back rent paid in a lump sum. Landlords are required to forgive late fees and up to 10% of the back rent. The conditional dismissal will document the payment terms/dates by all parties.
Q5: Who is eligible for the Eviction Diversion Program?
Rental assistance payments will be structured based on the tenant’s income. Those under 50% area median income (AMI) are eligible for 90% rental arrearage payment up to $3,500 and one-month’s rent (up to $1,200) going forward. Those between 50-80% AMI are eligible for 75% rental arrearage payment up to $3,000. Those between 80-100% AMI are eligible for 65% rental arrearage payments up to $3,000. Those above 100% AMI will not be eligible for financial assistance. Half of the rental assistance will be reserved for household at 50% AMI and below.
Amounts not covered in rental arrearage payment, or the landlord forgiveness amount, are considered the tenant’s responsibility and need to be paid to the landlord prior to CRF disbursement or in a payment plan. Additional requirements include:
- Tenants will be required to show proof of identification and provide 30 days or four weeks of paystubs to document their income.
- Pandemic Unemployment Assistance will be counted for income determination purposes.
- Tenants will only be eligible to participate in the program one time.
- Tenants below 50% AMI will be offered case management services for up to three months in an effort to connect them with other beneficial programs and services.
Q6: How much of back rent will be covered?
Coronavirus Relief Fund (CRF) rental assistance payments will cover up to 90% of the past-due rent for qualifying individuals. Landlords will be required to forgive 10% of the past-due rent and remove any late fees or penalties from the amount due. CRF funds can only be used on rent due beginning March 1, 2020.
Q7: What if all my back rent isn’t covered by the Eviction Diversion Program?
Tenants whose back rent is not completely covered by the Eviction Diversion Program will be entered into manageable payment plans.
Q8: When does the funding end?
Initial funding is expected to be allocated quickly for the program. The expenditure deadline for the Coronavirus Relief Fund (CRF) funds is December 30, 2020.
Q9: Who is running the Eviction Diversion Programs at the state level?
Michigan State Housing Development Authority (MSHDA) is administering the program and has convened an EDP state leadership team comprised of staff from MSHDA, MDHHS, SCAO, Michigan Poverty Law Program, Michigan State Bar Foundation, and the Governor’s Office. Their purpose is to guide the program’s execution, monitor program outcomes, and distribute information within their respective agencies/areas of influence to aid in program effectiveness.