Duplication of benefits is a review to determine if more funding was provided through various sources than was needed to complete the work of renovation or rebuilding after a disaster. Those receiving disaster assistance funding are asked during the process to list the resources they have available for the project and to sign an affidavit stating that the list is accurate.
Federal regulations prohibit the State from providing assistance that duplicates any other benefits received and exceeds the total rebuilding or renovation need of the recipient. When determining the rebuilding gap to calculate an award, the State Housing Recovery Program (HRP) is required to consider all funding sources that applicants have available to them to help rebuild or repair.
What is a Duplication of Benefits (DOB)?
A DOB occurs if an individual, business, or government entity receives disaster assistance from one or more sources for the same recovery purpose, and the total assistance received for that purpose is more than the total need.
For example, if a homeowner needs $75,000 to repair their home and they receive $10,000 from insurance, $25,000 from FEMA, $20,000 from Boulder County Community Foundation, and $5,000 in personal GoFundMe donations for the specific purpose of rebuilding, the maximum amount of money they can receive from another source for home repairs is $15,000. The funds awarded must also be spent on its intended purpose, in this case, repairing or rebuilding the home.
What funds are considered a Duplication of Benefits?
For the Housing Recovery Program, all funding sources that are available for an applicant to help repair or rebuild their home must be considered in a DOB review.
The following funding sources are included:
- Federal Emergency Management Agency (FEMA) - only funds for repairs or rebuilding are duplicative
- Small Business Association (SBA) - duplicative for traditional loans only
- Other federal, state, or local funding
- Other nonprofit, private sector or charitable funding, if for repairs or rebuilding (e.g. Community Foundation Boulder County Rebuild grants)
- State of Colorado Sales Tax Refund*
- County Use Tax Refund*
- Local Use Tax or Fee rebates or reimbursements*
- Any other funding received for repairs or rebuilding (e.g. GoFundMe funds specifically for the purpose of rebuilding or repair)
The most common examples where funds are not considered duplicative include:
- Funds provided for a different purpose (i.e. FEMA assistance not tied to rebuilding)
- Funds not available to the applicant (i.e. a forced mortgage payoff)
- Private loans without federal subsidy
- Pre-existing assets or lines of credit
*The U.S. Department of Housing and Urban Development (HUD) confirmed that the State of Colorado Sales and Use Tax Refund for Rebuilding after a Declared Wildfire Disaster, Boulder County Use Tax Rebate Program (for Marshall Fire), and local use tax and fee rebates need to be accounted for and may be duplicative of the assistance provided through HRP. This determination by HUD changed the DOB calculation on April 3, 2024, and the HRP program administrator will now include the State sales tax refund and the use tax and fee rebates in the duplication of benefits calculation.
Disclosure of Duplication of Benefits
During the Housing Recovery Program application process, the applicants must certify that they have disclosed to DOLA and its HRP program administrator all other funds available from, received by, or to be received from any party as compensation for damages resulting from the declared disaster for which assistance may be provided by DOLA. Applicants also must certify that they will disclose all future funds they reasonably expect to receive from any party as compensation for damages or loss resulting from this declared disaster for which assistance has been provided.
See an example of the affidavit that will be required to be filled out and signed.
Duplication of Benefits Process
A DOB review must be completed and validated by the homeowner at multiple points in the process.
The HRP Duplication of Benefits process is as follows:
For Traditional Loans:
- Duplication of Benefits check is conducted prior to award.
- A verification check is performed prior to closing after pulling a credit report.
- Applicants are required to recertify if there are any changes in their financial situation.
For Forgivable Loans:
- Duplication of Benefits check is conducted prior to award.
- A verification check is performed at fund holdback review.
- A verification check is performed at loan closeout (year 3 of forgivable loan)
In the event that additional funds are received by applicants at any duplication of benefits checkpoint, the HRP program administrator will do the following:
- Determine if there is an additional gap for eligible expenses that the additional funds can be credited towards.
- Determine if there are any non-rebuilding recovery needs that the funds can be credited towards.
- If neither of the above scenarios apply, the applicant will be required to repay the duplicative assistance amount to Impact Development Fund. Impact Development Fund will then repay DOLA for any duplicative assistance funds collected.
Recapture and Reimbursement of Duplicative Benefits
Through the affidavit, the applicant acknowledges that the source and amount of any and all additional funds received for costs associated with rebuilding, replacement, renovation and mitigation funded under the associated loan will be reported to DOLA and its HRP Program Administrator within 15 calendar days of receipt. If DOLA determines the additional funds to be duplicative, the loan funds will be reduced and/or the applicant will be required to repay any funds disbursed to them that are determined to be duplicative.