Iowa still has $18 million to help tenants avoid evictions. Why aren’t more people getting help?

A program from Iowa Finance Authority that’s meant to help Iowans from being evicted from their homes is rejecting nearly half of the people who apply for financial aid.

The COVID-19 Eviction and Foreclosure Prevention Program was announced May 29 during a press conference with Gov. Kim Reynolds after Iowa lifted its moratorium on evictions. 

The program, which is funded through the CARES Act, provides a maximum of $3,200 for renters and $3,000 for homeowners.

Since the program launched in May, 1,616 Iowans have applied for rental assistance and 89 applied for mortgage assistance as of July 27, according to Iowa Finance Authority.

But nearly 47% of applicants have been denied funding or are pending application review. 

So far, 883 renters have received $2,001,112 and 37 homeowners received $80,965. Nearly $18 million is still available for Iowans to use until the end of the year.

Now, at-risk Iowans are facing dire housing challenges as they confront large rent and mortgage payments that compounded during state and federal moratoriums.

Combined with the $600 in federal unemployment benefits going away, Iowa may see mass evictions these next few months.

“It’s going to be disastrous,” said Cari McPartland, service center administrator at The Salvation Army of Ames & Story County.

Barriers to being eligible for the program

To be eligible for funds from IFA, Iowans have to meet a number of criteria.

Iowans must not receive the $600 federal unemployment benefit and their income must not exceed 80% of median family income at the time they file their applications. They also must be at risk of eviction of foreclosure on or after March 17, 2020, to show their burden is COVID-19 related.

The primary reason people are denied from the program is that they had been receiving the additional $600 weekly benefits, said Ashley Jared, spokesperson for Iowa Finance Authority.

The other common reasons are incomplete information on the application and no COVID-19 related loss of income, Jared said.

IFA is reexamining the eligibility criteria now that Iowans will not have their $600 a week for the time being, Jared said.

McPartland said she doesn’t refer clients to the IFA program because of its restrictions.

“The guidelines — you just can’t meet them,” McPartland said.

Beyond meeting the eligibility criteria, the program requires landlords to verify the application within 10 days or else it’s denied. Landlords are directly sent the money from IFA.

But Lori Allen, director of Good Neighbor Emergency Assistance, which provides social services, said landlords from large rental properties in the Story County area are declining to participate in the program. 

Allen was contacting a landlord to let him know Good Neighbor Emergency Assistance was providing $500 in rental assistance for a client, but that she also encouraged the person to apply for the IFA program.

But she said property management responded saying they are declining any IFA payments because it was “complex” and “not worth it to us,” Allen said.

“I said, ‘$3,200 isn’t worth 30 minutes of your time?’” Allen said.

Jared said that it’s been IFA’s experience that landlords have been “enthusiastically” accepting payments. But if a landlord does not want to participate in the program, it is not mandatory.

The other issue with the program is the technology barrier, which may lead to incomplete applications, Allen said.

Due to COVID-19, many non-profit agencies and libraries have closed their doors, making it difficult for some applicants to find a computer or internet to fill out the application. 

Allen said she was helping a friend fill out the application, but when it came to the point to upload income verification, they had to stop. They had to find the documents and scan them, which Allen said she expects would deter some people.

“Right away I thought, ‘That is going to be problematic,’” Allen said. “It’s way different than snapping a picture and emailing it back to them.”

A growing housing crisis in Iowa

Housing assistance has become one of the largest requests from clients for Iowa Legal Aid, a non-profit organization that provides legal assistance to low-income Iowans.

Through a contract, Iowa Legal Aid works with Iowa Finance Authority to help Iowans who do not qualify for the eviction and foreclosure program. So far, IFA has referred 185 people, said Alex Kornya, litigation director for Iowa Legal Aid.

Since the pandemic began, Kornya said the organization has had 1,400 housing intakes with the majority of them being eviction related. That number is a 20% increase in comparison to last year.

The biggest issues for at-risk renters are lack of income and a lack of information about their rights and the resources that are available, Kornya said.

Even with the state and federal moratoriums lifted, Kornya said tenants still have protections to keep them safe against evictions. While landlords used to have to give only a three-day notice for evictions, that is extended to 30 days.

Now that Iowa courts are hearing cases again, a backlog of eviction cases have started coming through in late July, Kornya said. Since March 20, Kornya said there have been at least 3,082 eviction filings across Iowa.

With the expiration of the $600 unemployment benefits, he expects to see a spike in eviction hearings.

“That’s the single biggest factor keeping people housed right now,” Kornya said. “I worry about that. Really, really worry about that.”

The Salvation Army in Story County helped 16 families in April and nine in May with rent and utility payments. 

But in June, that number rose to 30, totaling $11,000, McPartland said.

“That’s the highest amount I’ve ever spent,” McPartland said. “I expect July to be the same.”

She’s seen a rise in clients from service industry jobs, such as restaurants, who still aren’t making enough because of reduced hours and no tips. 

McPartland said she’s also seeing new people asking for help, beyond her regular clients.

“The people I’m talking to are not lazy,” McPartland said. “They’re people who really want to work, but they just haven’t because their job isn’t there right now.”

Allen said requests for housing aid at her organization have more than doubled in July in comparison to March when the pandemic began.

Instead of asking for help for $650 in rent through, clients are requesting $3,200.

Her small non-profit organization can’t afford to provide thousands in aid, Allen said. But the $18 million left in the IFA program could make a significant difference for low-income Iowans.

She believes the program should open up to allow families to choose how they want to spend the money, rather than restrict it to housing. Car payments, health insurance and medication are also growing issues and letting families choose how to spend the money will help them more in the long run, Allen said.

She believes IFA should dole out the money to non-profit agencies that can then help local people in their areas.

“I wish that they would trust the people,” Allen said. “We could be getting this out a lot more quickly.”