Can an otherwise eligible household, be provided Homeless Prevention funds to stay in their current unit if it is not appropriately sized for the household size/composition?



While there are no Federal occupancy standards, an ESG recipient or subrecipient cannot use ESG funds to help a program participant remain or move into housing that does not meet the minimum habitability standards (e.g., the unit provides an acceptable place to sleep and adequate space). (24 CFR 576.403(c)). If a family has been determined eligible for homelessness prevention assistance but their unit does not meet ESG habitability standards or other local requirements, they would still be eligible for assistance, however, they would have to move to another unit in order to receive rental assistance.

ESG funds may be used to pay for eligible moving costs, as described in 24 CFR § 576.105(a)(6)). If moving costs will be incurred, all costs must be reasonable, necessary, and appropriate. If the subrecipient can document that the costs of the move were reasonable and “necessary to help the program participant regain stability in the program participant’s current permanent housing or move into other permanent housing and achieve stability in that housing,” it could be eligible. Make sure that you document the reason for this move following the record keeping requirements in 24 CFR 576.500 of the ESG Interim Rule.

Appropriately Sized Unit

With regard to determining whether a unit is appropriately-sized for a household, there are no Federal occupancy standards under ESG, though recipients may establish specific occupancy standards at the local level. Each recipient is responsible for determining (in accordance with local and Federal requirements) the best way to serve those in need with ESG funds. This includes determining what costs are reasonable and appropriate with regard to occupancy in accordance with the cost principles laid out in 2 CFR 225 and 230.The remainder of the response below provides additional guidance regarding space requirements under the ESG minimum habitability standards.

Minimum Habitability Standards

The minimum habitability standards in the ESG Interim Rule require that a housing unit assisted with ESG rental assistance provide each program participant in the unit with an acceptable place to sleep and adequate space and security for themselves and their belongings. (24 CFR 576.403(c)(2)). The terms “adequate space” and “an acceptable place to sleep” are not defined in the ESG Interim Rule. To determine what constitutes adequate space and security and an acceptable place to sleep, HUD defers to the standards established by state and local law.

A habitability inspection will help to ensure that the individual or family has adequate space and security for themselves and their belongings, and that the unit is generally habitable. Doing this inspection may also help the recipient/subrecipient assess whether this can be a permanent living situation for the homeless household. In addition, the unit must meet state and local government safety and sanitation standards, as applicable.

For additional guidance please review guidance on ESG Minimum Habitability Standards for Emergency Shelters and Permanent Housing.