Residents in These 4 States Could Be in Line for $377 Million in Stimulus Aid

The federal government is reclaiming unused relief funds and redistributing it to other states in need.

The COVID-19 outbreak spurred an unemployment crisis unlike any our nation has ever seen. Back in the spring of 2020, millions of Americans lost their jobs, and in the absence savings, many quickly fell behind on their rent payments.

Thankfully, lawmakers put an eviction ban into place at the time to prevent a widespread homelessness crisis. Lawmakers also voted to allocate roughly $46 billion toward rental assistance -- money that would allow tenants to catch up on past-due rent payments and avoid eviction once the aforementioned ban expired.

The money that was earmarked for rental assistance wasn't distributed at the federal level the same way stimulus checks were. Rather, that money was given out at the state level, and it was then the responsibility of each individual state to set up rental assistance programs and process applications for aid.

Some states, however, have yet to distribute all of the rental assistance money that was allocated to them. And so now, the federal government is taking that money back -- and giving it to a group of states that it claims needs those funds the most.

Some states' loss is other states' gain

Even though the federal government didn't take it upon itself to distribute rent relief funds to applicants directly, it wants to make sure all of that money gets distributed to the people who need it. For months, it's been pressuring governors in states with unspent rent relief funds to hand back that money. Now, it's going a step further by actively taking the money back.

In some cases, the federal government is going after states with a relatively low share of renters -- like Wyoming, South Dakota, Montana, and Nebraska. In other cases, it's going after states that have been slow to get that aid into the hands of tenants -- including Alabama, Arkansas, and Texas.

Meanwhile, the funds in question are being redirected to states with a higher percentage of renters, and states that have already spent their previously allotted rent relief funds. Four states in particular should see an influx of money.

California will be getting the largest windfall, with $136 million in additional rent relief funds. New York, meanwhile, is getting $119 million, while New Jersey, its neighbor across the river, is getting $47 million. Illinois is also getting a $15 million boost for rent relief purposes.

It's also worth noting that some other states will be getting small allocations of rent relief. These include Washington and North Carolina. But the bulk of those reclaimed funds will go out to the four states above.

A much-needed lifeline

While it's unfortunate some states are now losing out on rent relief funds, the hope is that this move on the part of the federal government will get that money into the hands of the people who need it the most. Many tenants in the aforementioned four states risk eviction as a result of owing their landlords money. This new influx of funding could spare many renters in California, New York, New Jersey, and Illinois from losing their homes and seeing their pandemic-related struggles prolonged.