How Will the American Rescue Plan Help Low-income Families?

Wondering how the ‘American Rescue Plan Act’ will save economic stability after the pandemic?

 The United States is attempting to regain its economy after the ruinous impact of the disastrous pandemic. However, a large portion of the population still faces the fear of evictions, rental debts while losing fundamental housing, job, nutrition and other essential securities. 

Real estate agent with house model and keys

This is where the American Rescue Plan Act (2021), signed recently by President Joe Biden, plays its role in helping low-income renters and households who find it difficult to pay their rents, afford utilities and meet the their basic needs.

From stimulus payment to rental assistance, all major benefits of the act are discussed below.

You Will Learn

Stimulus Payment

What kind of housing help is coming?

The stimulus payment package offers Americans billions in funds needed to help with utility and rent payments. To receive financial help, you have to meet certain conditions. Stimulus checks worth $1,400 per adult and an additional $1,400 per child will be given based on your tax returns.

If you earn above $80,000, you’ll not receive direct payment.

How is stimulus payment supportive to low-income renters?

Stimulus payments mean the low-wage and desperate renters will have cash in their wallets instantly. Being a low-wage renter, you will get immediate help that you can use to meet your housing needs.

Emergency Rental Assistance (ERA)

ERA offers emergency funds to low-income renters who are going through a financial crisis. Two distinctive programs have been introduced, namely, ERA1 and ERA2.

How much funding is offered to provide financial assistance?

ERA1 provides assistance worth $25 billion under the Consolidated Appropriations Act. It was incorporated in December 2020.

ERA2 provides assistance worth $22 billion under the American Rescue Plan Act. It was incorporated in March 2021.

Moreover, the program comes up with emergency housing vouchers, worth $5 billion, to help those experiencing homelessness and domestic violence.

These vouchers are also introduced for supportive services such as:

  • Housing counseling
  • Acquisition of non-congregate shelter units
  • Homeless prevention services
  • Rental help based upon tenant

Generally, 90% of the aid is allocated to direct financial help that includes home energy costs, rental arrears, utilities, and rent. The remaining 10% of the aid is allocated to other housing stability services.

How will be the payments done?

ERA payments will be done directly to U.S. territories (the Commonwealth of the Northern Mariana Islands, the United States Virgin Islands, Guam, Puerto Rico, and American Samoa), the Department of Hawaiian Home Lands, states, Indian tribes, and local governments holding above 200,000 residents.

When is the ERA fund going to expire?

CDFA (assistance listing number) number of the ERA program is 21.023. It will expire on September 30, 2022.

How is ERA supportive to low-income renters?

Low-income renters who are the victims of the impact of the pandemic were served by the CDC eviction moratorium until March 2021. They owed rent while most of them staying at their homes. Until the moratorium expired, those renters owed excessive amounts in back rents.

With the support of ERA and emergency housing vouchers, the low-income renters will meet their utilities and bank rent.

Homeless Assistance

The American Rescue Plan Act aimed at removing poverty and assist homeless people through multiple programs.

Fair Housing Activities

ARP provides the funds worth $20 million to progress the Fair Housing Initiatives program that is aimed to support fair housing organizations. Such organizations use resources to address fair housing investigation, complaint, inquiry, outreach activities, education, adapting services charges during the pandemic.

40% is allocated to housing counseling organizations. Such organizations aim at assisting low-wage renters, low-wage homeowners, and those who are at risk of experiencing homelessness.

In addition to this, ARP helped in providing funds worth $100 million to the major housing counseling groups.

Homeowners Assistance Program

Homeowner Assistance program diminishes financial adversity that is experienced after the pandemic. It provided the funds worth $9.96 billion that aims at preventing mortgage defaults, delinquencies, home energy services loss, loss of utilities, and mortgage foreclosures.

Rural Housing

U.S Department of Agriculture took an initiative to help the affected homeowners in the rural areas under Section 502 and Section 504.

Funds worth $39 million are allocated to the direct loan programs that will be made available by the end of September 2023.

Moreover, ARP addresses the difficulties faced by individuals dwelling at rural agriculture department’s subsidized property. Such people who are currently not getting federal aid are going to get assistance through a $100 million supportive program.

Assist Native Hawaiians and Tribal Communities

As revealed by the Center of Budget Policy and Priorities, American Rescue Plan Act addresses house-related health risks after the COVID-19 pandemic. It has allocated funds worth $750 million to minimize these risks.

These funds contain competitive block grants that are formula-based too. A $750 million program aims specifically at helping the Native Americans dwelling as tribal communities or at Native Hawaiian lands. The program will help them pay back rent.

Utility Assistance

Under the ‘Low-income Housing Energy Assistance Program’, ARP offers assistance worth $4.5 billion to help people in affording their utilities.

Under the ‘Low-Income Household Drinking Water & Wastewater Emergency Assistance Program’, ARP offers assistance worth $500 million to help people afford their utilities.

How is Homeless Assistance supportive to low-income renters?

A huge number of low-wage renters are experiencing fear of eviction. The homeless assistance program will compel homeless shelter providers to pay for new places for the renters to live who face the risk of homelessness.

The shelters will offer these people privacy, protection, and safety. It will prove to be a good strategy to re-use the present buildings to fulfill the housing shortages.

Unemployment Benefits

ARP Act continues to take steps to help those unemployed due to the impact of the pandemic. This aggressive program of facilities extends 3 major pandemic programs. They are:

  • Pandemic Emergency Unemployment Compensation (PEUC)
  • Pandemic Unemployment Assistance (PUA)
  • Federal Pandemic Unemployment Compensation (FPUC)

How many weeks of pandemic benefits will be given?

ARP extended the major programs for people who became jobless during the COVID-19 pandemic, through September 6, 2021. Here is how:

Benefits of PUA and PEUC will be given by the end of the second week of September 2021. The benefits will cut down after that.

The duration of PEUC benefits is increased from 24 weeks to 53 weeks. If you were initially eligible for state benefits then you get PEUC benefits.

The duration of PUA benefits is increased from 50 weeks to 79 weeks. If you are from a high unemployment state, then you can get PUA benefits for up to 88 weeks. If you were initially eligible for state benefits then you get PUA benefits.

How much will you get above the normal benefits?

President Biden has proposed to increase additional FPUC benefits up to $400 per week. However, the amount is reduced to the present level by the senate which is $300 per week.

If you are an employee receiving benefits for W-2 work, you can receive an additional $100 per week via a new program namely,’ MEUC’.

Nutrition/Food Aid

Support to Supplement Nutrition Assistance Program (SNAP)

The legislation took a step to help low-income families meet their nutritional needs. By the end of September 2021, SNAP benefits will be increased by 15%.

Moreover, funds worth $1 billion will be allocated to nutrition assistance programs in the U.S. and $1.1 billion will be allocated to the states to proceed with SNAP administration.

Support to Women, Infants, and Children Program

ARP Act further supports Women, Infants, and Children program by providing funds worth $450 million to the USDA. The funds will be used to increase the amount of cash-value vouchers by the end of September 2024.

Nutritional Support to Emergency Shelters

Under the National School Lunch Program, compensation for meals will be received by poor families living in emergency shelters. People younger than 25 are eligible for this nutritional aid.


ARP Act sets aside the funds worth $122 billion for k-12 education. By the end September 2023, funded amount will be used to enhance the class environment such as improve ventilation, ensure safety, reduce class size, and buy personal care equipment.

An additional $40 billion will offer emergency financial aid grants to the universities and colleges by the end of September 2023.

ARP Act will further provide $15 billion in September 2021 to child care providers under the Child Care and Development Block Grant program.


President Biden continues to bring massive relief funds that will help the poor and homeless while keeping the economy on its track. We all hope to see ARP Act minimizing the financial crisis faced by homeless and low-wage renters soon.

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