Behind on rent? A new $100 million housing assistance program may help

Minnesotans who are behind in their rent or mortgage will soon have a shot at getting some relief. 

Starting Monday, they can apply for a piece of the $100 million in assistance the Minnesota housing agency is doling out across the state. The money comes from the federal CARES Act and is intended for those struggling financially because of COVID-19.

The cash can help both renters and homeowners who meet income requirements and who are behind in their housing costs — such as rent, mortgage, lot fees for manufactured home parks and utility payments. 

But there will likely be obstacles to getting assistance where it is needed, and officials say they’re hoping landlords will help get the word out.

“To landlords I would say, for tenants who are behind in their rent, work with them to help them apply for this program,” said Jennifer Ho, commissioner of Minnesota Housing. “And for renters who are getting ready to apply, reach out to your landlords and let them know you’re getting ready to apply.”

Hennepin County already has a $15 million pandemic-related rental assistance fund. Unlike the state fund, it does not include assistance for homeowners. 

County housing staff are also trying to enlist landlords to spread the word. 

“When they slip the rent notice under the door, if they are able to put with that a little business card saying, ‘Hey, you can call the county and ask for help’ — that’s our best way to get the message out,” said Julia Welle Ayres, director of Hennepin County’s housing and development finance division. 

But that’s not as easy as it may sound. 

Hennepin County has contracted with ACER — the African Career Education Resource — to help African immigrants in the north and northwest suburbs apply for rental assistance.  

It’s part of organizer Fadumo Mohamed’s job to call people who need help paying the rent. Some tell her they don’t want to apply, and she said some are too proud to take assistance. But she tries to coax them by saying, “These are your tax dollars. This is something you worked hard for before and now it’s coming back.”

If they agree, she helps them fill out the online application. Then she’s back to the phones. She calls the landlord for essential tax and financial information to finish the application. Sometimes she has to call multiple times. It’s only when someone finally picks up and answers her questions that the application can be submitted to the county and the wait for approval begins.

Checks go to the landlord

Landlords have a vested interest in spreading the message about available rental assistance. For both the Hennepin County and the new state fund, renters and homeowners apply for the money, but the check goes directly to the landlord or mortgage holder.

In north Minneapolis, one landlord is working to open a channel of honest communication with renters so they can both get the assistance they need.

The nonprofit Urban Homeworks owns 146 affordable apartments primarily in north Minneapolis. About half of their tenants are behind in rent, said executive director Chad Schwitters. Even before the COVID-19 financial crisis and the destruction of local businesses in the violence that erupted after Minneapolis police killed George Floyd, residents here were financially vulnerable.

“The average tenant total household income is right around $20,000,” he said. “And that’s earned income, so they’re out there working, scraping together 20-grand.”   

In fact the financial distress of this community is part of the history of Minneapolis. As the city developed, this area was considered the poor, Black section of town — which limited investment and wealth-building opportunities here.

Schwitters said he wants to be part of changing that moving forward. One of his staff members, Marque Jensen, is dedicated to equity and engagement. Jensen said he wants good relationships with tenants so when hard times come, they are comfortable talking about it. 

When the pandemic first hit, he said, people were not being open about their situation. 

“The first couple of months, people were nervous about having that conversation,” he said.

But over time, Jesnsen said, some learned that his group sincerely wanted to work with them. The nonprofit set up payment plans and directed them to public resources like Hennepin County’s rental assistance. 

Schwitters said if tenants get financial assistance to pay the rent, it’ll help keep landlords afloat, too. Right now, tenants are protected by a statewide moratorium on evictions, and banks that hold Schwitters’ mortgages have agreed to a forbearance deal. But if rents continue to go unpaid, Urban Homeworks won’t have the reserves to cover the financial gap, he said.

Schwitters said he is grateful for the rental assistance, but even with the $100 million in state aid, it’s not enough to stabilize people in their apartments in the long term. 

Citing estimates from The Stout research firm, the rent shortfall across Minnesota as of the end of July was roughly $220 million, said Margaret Kaplan from the Housing Justice Center in Minnesota. That is twice the amount of the state aid that is intended for both renters and homeowners. Kaplan said she expects the shortfall to increase dramatically now that the $600 a week federal unemployment insurance benefits have ended.

Ho, the housing commissioner, said she hopes more federal housing assistance becomes available. But beyond that, she said, policymakers need to take a step back and look at the systemic reasons why so many working Minnesotans couldn’t afford rent — even before a pandemic sent the economy into a tailspin.

How to apply for assistance

The money is intended for Minnesotans who are financially struggling from COVID-19 and meet certain income requirements. Applicants can call 211 from 8 a.m. to 8 p.m.; staff speaking multiple languages will be on hand.

They can also text 211 and type “MNRENT,” or go online to 211unitedway.org. Once the process begins, applicants can track their status online.The $100 million is from the federal CARES act and can help pay housing costs like rent, mortgage, lot fees in manufactured home parks, and utility payments. 

While the money is for both homeowners and renters, Ho said she hopes homeowners are exploring all their options.

“We really encourage people who have a mortgage to reach out to their financial institution, and find out if they are eligible to get forbearance because a lot of financial institutions are offering the ability not to pay right away," Ho said.