Is it allowable to use ESG funds to provide utility assistance to homeowners at risk of losing their utilities and/or becoming homeless?

Date Published: December 2013

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Homeowners who meet ESG eligibility criteria may, under certain circumstances, receive utility payment assistance to cover the costs of utilities in the home that the individual/family owns.
While recipients can provide utility-only assistance, HUD expects that this will be rare. First, there are laws governing public utilities in many states that prevent utility companies from shutting off power to households during winter months and that may also require the utility company to offer payment plans to households that miss payments. Second, there may be other forms of utility assistance available to prevent utility shut-off, such as LIHEAP.
If staff confirms that neither of these conditions exists, however, utility-only assistance may be justified under certain circumstances. If the household is going to have to leave the housing due to a lack of utilities, can avoid literal homelessness by having utilities paid, and meets other ESG eligibility requirements explained below, then a household may be assisted under the Homelessness Prevention component with utility-only assistance.
Please note that in order for a household to be eligible for financial assistance under the Homelessness Prevention component, individuals or families must meet the criteria under the "at risk of homelessness" definition, or the criteria in paragraph 2, 3, or 4 (where the household does not also meet paragraph 1) of the "homeless" definition, AND have an annual income below 30 percent of the median family income for the area, as determined by HUD, at initial evaluation (§ 576.103). In some cases, these criteria include determining at intake whether an individual or family lacks the resources to retain permanent housing or obtain other permanent housing.
Finally, ESG is not intended to be simply an eviction prevention program; it is intended to be a part of a system-wide approach. In order to evaluate and coordinate services to the greatest extent possible, the ESG Interim Rule requires the following:

  • Every ESG program participant must be connected to mainstream and other resources as needed, as stated in § 576.401(d);
  • Each program participant must receive housing stability case management, including meeting with a case manager and developing a plan to assist the program participant to retain permanent housing after the ESG assistance ends, as stated in § 576.401(e);
  • ESG recipients must have written policies and procedures for coordination among different providers of services in the community - activities must be coordinated and integrated to the maximum extent practicable, as stated in § 576.400(e)(3)(v)).

Tags: ESG Program Requirements - Eligible Activities/Uses