DEHAP RECOUPMENT PROCESS
The Delaware Housing Assistance Program (DEHAP) was funded through the federal Emergency Rental Assistance (ERA) Program, which the U.S. Treasury Department distributed to Delaware in January 2021 (ERA-1) and May 2021 (ERA-2). Now that the program is winding down, Delaware State Housing Authority is required by the U.S. Department of Treasury to complete a financial audit of the program and to attempt to recoup funds on cases that were overpaid or cases that received payment in error.
After an initial round of outreach this summer, DSHA will cease attempts to recoup these funds. Please note that DSHA’s initial determination has not changed, and the payment you received remains ineligible under federal program requirements.
These FAQs represent DSHA’s approach to the process as of the publication date. They are subject to revision and may be superseded or preempted by updated guidance that U.S. Treasury may issue as the process continues.
Frequently Asked Questions
How will I know if I am expected to return funds to the program?
You will be contacted via phone, email, and mail if your DEHAP case was overpaid or paid in error. If you are a landlord, we recommend you begin reviewing your rent ledgers and financial records for 2020, 2021, and 2022. The U.S. Department of Treasury only allows for a total of 18 months of assistance per tenant household.
Why was my case selected for recoupment?
If you are a landlord, your DEHAP Rental Assistance case was chosen for recoupment either because a) your tenant received more than 18 months of financial assistance from the program or b) your application was not processed per program expectations, and payment was issued in error. The U.S. Department of Treasury only allows for a total of 18 months of assistance per tenant. It is important to note that the tenant might have maxed out on their DEHAP rental assistance before moving to your property.
If you are a tenant, your DEHAP Rental Assistance case was selected for recoupment because you received more than 18 months of financial assistance from DEHAP. The U.S. Department of Treasury only allows for a total of 18 months of assistance per tenant household.
Where should I send back returned funds?
Returned funds can be sent via check to:
Delaware State Housing Authority
Attn: DEHAP Rental Assistance Program
18 The Green, Dover, DE 19901
All returned funds must be accompanied by a Return Funds form, located here.
I do not agree with the decision to recoup funds on my DEHAP case. Can I request an appeal?
Payees will be permitted to request an appeal of the decision to recoup funds on their DEHAP case(s). Appeals must be submitted, in writing, to:
Delaware State Housing Authority
Attn: DEHAP Recoupment Appeals
18 The Green, Dover, DE 19901
Appeal requests must use the standard DEHAP Recoupment Appeal Request form, located here.
Why is the recoupment process happening now?
Recoupment is occurring because DEHAP is winding down and following close-out instructions issued by the U.S. Department of Treasury. Delaware State Housing Authority is required to complete a financial audit of the program and recoup funds from overpaid cases and cases that received payment in error.
How and why did overpayments occur?
DEHAP was an emergency assistance program. From the beginning, DSHA recognized the extreme need of our rental community and worked tirelessly to get funds out of the door. At one point, our agency dispersed close to $2 million a week, and our efforts kept eviction rates lower than pre-pandemic levels. Despite the diligent review of applications, some applications were submitted for more than allowable assistance that was not stopped in the case review process and ultimately paid more than allowable program amounts. We appreciate the integrity shown by those landlords and tenants who have already taken the initiative to return overpaid funds and thank everyone in advance for their patience.
I'm a tenant who received more than 18 months of assistance. Now, my delinquent rent is no longer covered and I'm not sure what to do.
- Talk to your landlord about a possible repayment plan or other alternative solution.
A sample repayment letter can be found here. ; a sample repayment pledge can be found here.
- Check out our website for information on other community resources which may be able to offer assistance.
- For questions, leave a voicemail at 302-577-5008. Due to limited staffing capacity, not all voicemails will receive return phone calls. The DEHAP team will contact applicants whose cases merit further review.
I'm a landlord. How will this affect my tax returns?
You can either claim recouped DEHAP funds as part of your 2023 tax return, or you may request an updated 1099-MISC form and file an amendment to a previously submitted tax return specific to the year DEHAP funds were disbursed. Please email ⦁ RentReliefAdmin@yardi.com to request an updated 1099 form. General information on the 1099 process can be found here: ⦁ 1099-FAQ-12082022.pdf (decovidhousinghelp.com).
What happens to the recouped funds?
Funds recouped from ERA-1 will be returned to the U.S. Department of Treasury, while funds recouped from ERA-2 will be reallocated to support tenants currently facing eviction with a scheduled court date who have not already received the maximum allowable amount of 18 months of DEHAP assistance.
Some recoupment cases are more than a year old, which will make recouping funds from tenants difficult; some tenants may no longer reside in the units. Are landlords still expected to return funds to the program?
DSHA is required, by U.S. Treasury, to attempt to recoup funds regardless of when a DEHAP case was approved and paid.
What happens if landlords return funds to DEHAP, but tenants are not able to repay the amount owed?
DEHAP will allow landlords to request a repayment plan, allowing up to 90 days to return funds owed to the program. DSHA encourages landlords to extend the same accommodation to tenants, allowing them more time to repay the funds. Repayment plan resources are available on the DEHAP recoupment page.
Recoupment communications site sections 6 and 15 of the Landlord Terms & Conditions. How do these sections explain funds recoupment? What if the Landlord Terms & Conditions form completed does not include section 15?
Section 6 of the Landlord Terms & Conditions explains that DSHA will audit the Delaware Housing Assistance Program. Landlords agreed to:
⦁ Cooperate with the audit.
⦁ Provide any documents requested or required as part of the audit process.
⦁ Refund payments to the program if recoupment is determined to be necessary.
DSHA introduced section 15 in a revised version of the Landlord Terms & Conditions effective October 2022 to directly address any ambiguities in the interpretation of section 6 with regard to auditing and recoupment procedures.
I believe my case was approved and paid due to an error on the part of the DEHAP case review team. Why do I have to participate in recoupment?
DEHAP recipients are obligated to 1) submit applications for assistance only up to the maximum allowable amount of 18 months, 2) return funds received over 18 months, and 3) maintain careful records of assistance payments received through the program.
After DEHAP assistance is disbursed, a DEHAP recipient is expected to update and retain rent ledger information reflecting how DEHAP payments have been applied to a tenant’s account by month and amount.
Landlords and tenants had minimum access to data. How does DSHA expect DEHAP recipients to account for these issues?
DEHAP processed applications based on rent ledger information provided by landlords and uploaded to the application portal. DEHAP recipients are expected to maintain careful records showing DEHAP assistance received, and how it was applied to a tenant’s account. For cases that were processed through Yardi/Delaware Rent Relief, payment detail information is available in Landlord side of the DEHAP application portal by clicking on “Case Info” then “Breakdown by Month”. Please see the screenshot below.
Some of the payments were made to resolve stipulated agreements or dismiss court cases. If the funds are rescinded the tenants will be in breach of those agreements and subject to judgement/eviction. Are the Courts aware funds recoupment is happening?
DSHA is aware that funds recoupment may impact tenants as well as landlords, and is working with community partners to mitigate any negative impacts tenant households may experience. DSHA has communicated with representatives from JP Court regarding DEHAP recoupment efforts.
What happens if payees do not return the funds to DSHA?
U.S. Treasury expects DSHA to attempt to recoup DEHAP funds when: a) a tenant household received more than 18 months of financial assistance from the program, or b) a DEHAP was not processed in accordance with program expectations, and payment was issued in error. If funds identified for recoupment are not returned to the program, DSHA is obligated to report this information to U.S. Treasury’s Office of the Inspector General. Further action at the local level may also be taken.