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Loan Details

The Housing Recovery Program offers Grant / Forgivable Loans and Traditional Loans. Click on the links to jump to the relevant loan details:

5 Grant / Forgivable Loan Details

For the Housing Recovery Program, grants of funds will be made in the form of forgivable loans. The applicant must be the current subject property owner and the owner of record on the disaster date. Ownership will be verified through public record, warranty deed and real estate tax records.

Available Amount:  Up to $100,000.00 maximum based on the household income as a percentage of area median income (see Table 2). 

Use of Funds: Rebuilding costs including but not limited to architectural, engineering and permitting costs, building materials, construction costs and mechanical systems. Eligible costs also include energy efficiency and fire or wind mitigation measures.  Housing Recovery Program funds may be a mix of Federal, State and Local resources depending on individual household and property eligibility.

Primary Residency Requirement: Borrowers must maintain the property as their primary residence for a period of at least 3 years.  The three-year period begins at the loan closing. Property transfer prior to the three-year forgiveness period will result in the payoff of any remaining unpaid principal balance on a proportional basis.

Payments: No payments of either principal or interest are made on a forgivable loan during the 3-year condition that the home be used as a primary residence.

Duplication of Benefit:  Borrower must provide documentation for all related assistance and benefits received.  Sources include but are not limited to: FEMA, Hazard Insurance Payout, a community foundation, SBA, or other funders. Should a duplication of benefits be found, funds in that amount will  be repaid to the Program. See Section 3 for more details on Duplication of Benefits.

Exceptions Policy: All aspects of the Program eligibility and underwriting criteria are subject to DOLA Staff-level exception authority. 

Quality Control Review: The Administrator or Partner will be responsible for regular reimbursement requests and desk, virtual, or on-site audits of Program files in accordance with Administrator Policies and Procedures as well as DOLA criteria. 

Holdback of Grant/Forgivable loan funds: The lessor of 20% or $10,000 of a forgivable loan is held back through the construction period. These funds are disbursed upon issuance of a certificate of occupancy and the final rebuild cost review. 

Changes found in the final review of homeowner files may result in reductions of the award amounts due to an increase in project resources, or the review may uncover the opportunity to provide additional assistance if eligible costs were greater than anticipated. Loan documentation will be revised to reflect changes.

6 Traditional Loan Details

Traditional loans are available to those who suffered damage or destruction of principal residences in State of Colorado disasters from 2018 on.  The applicant must be the current subject property owner and the owner of record on the disaster date. Ownership will be verified through public record, warranty deed and real estate tax records. 

Household Income Maximum:  N/A, there is no household income qualification requirement.    

Available Loan Amount:  Up to $50,000.00 maximum, with a minimum award of $5,000.00 

Total Debt Ratio:  Maximum back ratio of 50% 

Repayment Terms:  The loan will be repaid via principal and interest monthly payments fully amortized over a period not to exceed 30 years at 1.50% interest.  The loan will become immediately due upon the sale, transfer, refinance, when the house is no longer the primary residence, or upon the borrower's death.

Use of Funds: Rebuilding costs including but not limited to architectural, engineering and permitting costs, building materials and mechanical systems.  Eligible costs also include energy efficiency and fire or wind mitigation measures.   Housing Recovery Program funds may be used in combination with a mix of Federal, State and Local resources depending on individual household eligibility. Funds are anticipated to be used to reimburse a contractor for rebuilding or reconstruction expenses during the term of that work. Payment may be made directly to a general contractor or from an escrow account established for the applicant. 

Term: Maximum 30 years 

Interest Rate:  1.50% fixed interest rate 

Loan Fees: There is no cost to access the Housing Recovery Program and no application fee is charged. Clerk and Recorder filing fees, origination fees, deed of trust fees and closing costs for forgivable or traditional loans will be paid by a third party administrator or partner under a separate contract with DOLA. Applicable fees will not be deducted from the loan proceeds. 

Collateral: A subordinate lien priority will be placed on the subject property.

Duplication of Benefit:  Borrower must provide documentation for all related assistance and benefits received.  Sources include but are not limited to: FEMA, Hazard Insurance Payout, a community foundation, SBA, or other funders. Should a duplication of benefits be found, funds in that amount will  be repaid to the Program. See Section 3 for more details on Duplication of Benefits.

Compatible Mortgages: Program funds may be used in conjunction with construction loan, SBA, conventional or portfolio first mortgage product except those containing a negative amortization feature or prepayment penalty.  This program is not compatible with an FHA primary mortgage. 

Combined Loan to Value: Maximum CLTV is 105% of “as complete” value.  Exceptions for VA and USDA-RD financing in which a funding fee or guarantee fee causes CLTV to exceed 105% will be evaluated on a case-by-case basis. 

Exceptions Policy: All aspects of the Program eligibility and underwriting criteria are subject to DOLA Staff-level exception authority.  

Quality Control Review: The Administrator or Partner will be responsible for regular reimbursement requests and desk, virtual, or on-site audits of Program files in accordance with Administrator Policies and Procedures as well as DOLA criteria.

Loan postponement: Holds or postponement of the execution of final loan documents may be made under the following provisions:

  • The applicant requests in writing that a hold be placed on executing loan documents,
  • A hold on closing any loan is limited to 6 months from date of the award letter, and
  • Loans that do not close within 6 months are subject to review, which may result in a rescission of that loan commitment.

Wind and Wildfire Mitigation Traditional Loan: For applicants applying for the $25,000 Wind and Wildfire Mitigation Traditional Loan, they will not have their credit pulled by the program administrator, no debt-to-income ratios will be calculated, and the applicant’s loan to value ratio will not be taken into consideration. The only underwriting requirement is a review of the insurance gap and income review (AMI) to make sure they meet the requirements of the program. If an applicant has had their credit history reviewed for HRP, there is no need to repeat that effort for a pending traditional loan award for a Wind and Wildfire Mitigation Traditional Loan. Additionally, no debt-to-income ratios or loan to value ratios will be taken into consideration.

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