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State program helps tenants pay back rent, avoid eviction

The Eviction Diversion program can cover up to 90% of past-due rent. Landlords will be required to forgive up to 10% and remove any late fees.

GRAND RAPIDS CHARTER TOWNSHIP, Mich — Evictions have been on pause for the past few months due to the COVID-19 pandemic. However, starting Thursday, landlords can begin the eviction process with tenants who owe back payment. 

A new program by the Michigan State Housing Development Authority (MSHDA) is trying to help keep residents in their homes by offering funds to help pay off rental debt.

The Eviction Diversion program was created in response to the coronavirus and its financial effects.

"With people losing their jobs and the uncertainty around unemployment benefits, you know people are nervous wondering if they’re going to be able to keep up," Kelly Rose, Chief Housing Solutions Officer with MSHDA said. 

Michigan legislature appropriated $60 million of the state's Coronavirus Relief Funds that were funded for the CARES Act. $50 million out of that $60 million has been dedicated specifically to eviction relief.  

Through the program, qualified tenants can receive aid for up to 90% of past-due rent, which will be given to landlords in lump sum payment.  As part of the program, landlords will be required to then forgive up to 10% of back rent and waive any late fees or penalties. Funds from the program can only be used on rent due beginning March 1, 2020. 

"Most of the landlords have been very positive," Rose said, "They feel like getting that lump sum payment you know within a couple weeks is a good deal for them."

In order to qualify for rental assistance, tenants must be actively working through the eviction process and be below the area median income, which is classified by county. Pandemic unemployment benefits will count towards income.

"In Kent County a family of four - that’s $80,200. So, if their household income is below that number, they’ll qualify," Rose explained.

Rental assistance payments are structured based on a tenant’s income:

  • Tenants under 50% area median income (AMI) are eligible for 90% of their rental debt payment, up to $3,500 and one-month's rent up to $1,200.
  • Tenants between 50%-80% AMI are eligible for 75% of their rental debt payment, up to $3,000.
  • Tenants between 80%-100% AMI are eligible for 65% of their rental debt payment, up to $3,000. 

Half of the rental assistance funds will be reserved for those under the 50% AMI and below.

Tenants whose back rent is not completely covered by the Eviction Diversion Program will be entered into manageable payment plans. 

To apply, individuals can visit Michigan.gov/EDP and connect with their local housing and assessment resource agency. Tenants will fill out an application, answering basic questions about their living situation and income qualifications. Landlords will also have to fill out a brief application before a settlement agreement can be made.

Dedicated funds for the program will expire on December 30, 2020. MSHDA said it is difficult to know if the $50 million will last through the year. However, Rose said other programs like the Emergency Solutions Grant and the Community Development Block Grant are still available to help tenants, should the initial Eviction Diversion Program's funding get depleted.

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Rose said her team is preparing for an influx of calls tomorrow, as the eviction moratorium ends. She told 13 ON YOUR SIDE tenants shouldn't get discouraged or worried if they can't get through to a representative right away, and encouraged those interested in the program to keep calling.

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"People shouldn’t be worried that if they can’t reach their housing assessment and research agency right away that their funding will be gone and their going to miss that opportunity," Rose said.


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