Feds Unlock Covid Aid Funds for Affordable Housing

New initiatives from the Treasury Department will let unspent assistance dollars fund a wider range of housing projects.

1 minute read

March 6, 2024, 7:00 AM PST

By Diana Ionescu @aworkoffiction


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The U.S. Treasury Department announced a new initiative that will let state and local governments use unspent Covid-19 relief funding for a broader range of affordable housing projects, reports David Lawder in Yahoo Finance.

As Lawder notes, “In the biggest of the moves, the Treasury said it would allow state and local governments to use unspent funds from the $350 billion State and Local Fiscal Recovery Fund to support housing projects serving families earning up to 120% of the area's median income, a big jump from 65% previously.”

According to Reuters calculations, this could unlock as much as $40 billion in unspent funds — an urgent proposition considering that “The 2021 American Rescue Plan Act stipulated that all of the state and local fiscal recovery funds must be obligated -- with contracts or other binding spending commitments -- by the end of 2024, and funds must be fully expended by the end of 2026.”

The Treasury is also extending support for a risk-sharing program between the Department of Housing and Urban Development (HUD) and local housing agencies that funds the rehabilitation and development of affordable housing units.

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