7 Origination Procedures
Application: Applicant eligibility will be determined as part of applying to the Housing Recovery Program. Program Administrator or Partner staff will work with each applicant in order to complete and upload the full set of application materials.
Application Processing: The Program Administrator or Partner will order site-specific third-party verifications. The Administrator or Partner will calculate the standardized rebuild estimate and associated financial gap to rebuild the residence and will determine the amount of eligible assistance and issue a loan approval notice and associated mortgage disclosures. The Program or Administrator will order evidence of hazard insurance and a copy of the title commitment. Final loan disclosures are delivered electronically to the first mortgage loan officer and settlement agent at the Title Company, as applicable, for balancing prior to presentation to the borrower. All required loan disclosures will be delivered directly to the borrower in accordance with federal and state mortgage regulations. All outstanding items must be cleared prior to funding.
8 Appeals Policy
8.1. Informal Appeal
If the applicant disagrees with an eligibility or award determination made by the program, they may file an appeal within 30 days from the date of receiving the award determination, no award, or ineligibility letter. To file an Appeal, the applicant must provide any program determination, no award, or ineligibility letter and any new information or supporting documentation that was not available at the time of the initial application. Applicants must also provide a narrative describing, in detail, the reason(s) for requesting a review of the appeal determination. Any Informal Appeal to a Program decision will be sent to the Program Administrator for review.
If the applicant is not satisfied with the outcome of the informal appeal, they may request a formal appeal.
8.2 Formal Appeal
All Formal Appeal requests must be submitted in writing within 30 days of denial of the informal appeal in one of two ways:
By email: dola_recovery@state.co.us
By U.S. Mail:
Colorado Department of Local Affairs
Attn.: DRR Program Manager
1313 Sherman St., Rm. 521
Denver, CO 80203
Within 10 business days of receiving the Formal Appeal request, program staff will draft an initial review of the Appeal and provide it along with all appeal supporting documents to the applicable Program Manager who may bring other Program staff into the review as appropriate.
After review, the Program Manager for the applicable funding source (CDBG-DR or DRR) will instruct staff or the third-party administrator on the changes to be made to the applicant’s file and a decision letter will be delivered to the applicant. If the Program Manager is unable to resolve the appeal request, the Program Manager will forward the appeal request for final review by an Appeal Review Panel. The Appeal Review Panel will meet and decide on an Appeal within 20 business days of receipt of the complete Appeal documentation from the respective Program Manager. Appeal decisions will be mailed or emailed to the applicant within 5 business days of the panel decision.
The formal appeal process is listed below:
- Formal appeal filed with Program Administrator
- Review by the Program Manager of the applicable funding source, selected Program staff and Program Administrator
If approved Program Manager authorizes decision
If not approved, Program Manager forwards to Appeal Review Panel - Appeal Review Panel reviews and makes decision
- Applicant informed of decision
The Appeal Review Panel is composed of 3 members with 2 from the Division of Local Government and one from the HRP Program Administrator. The panel meets as necessary to review outstanding appeal review requests that were not approved by the applicable Program Manager for final determination. Appeal requests must be complete as noted above prior to going to the Appeal Review Panel.
8.3 Option to Reopen an Application
Applicants may reopen their application if there has been a significant change to their rebuilding costs or resources since the original application or denial of a formal appeal. Examples include additional add-ins to the rebuilding cost not included in the original estimate, additional add-ins for mitigation costs, or rebuilding assistance that is no longer available. Should a household or property owner feel that substantial changes have occurred in their rebuilding or renovation situation, they may request that the application file be reopened and reviewed based on the new information. Requests to reopen a file that do not provide new information unavailable at the time of the previous HRP program determination will be rejected without further review.
9 Closing Procedures
The Administrator will deliver closing instructions, final loan document package and loan proceeds direct to title or applicable vendor. Wires are sent 24 hours prior to the scheduled closing date. Loan proceeds will be disbursed upon receipt and approval of an eligible vendor invoice. Wire or ACH disbursement will be in an amount not to exceed 80% of the total loan approval amount for the forgivable loan. The lessor of 20% or $10,000 of the forgivable loan will be held-back through the remainder of the construction period and will be disbursed upon successful certificate of occupancy and final rebuild cost review and approval. No funds are held back in a traditional loan.
Fees Collected: Clerk and Recorder filing 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. Those applicable fees will not be deducted from the loan proceeds. A public recording fee for the deed of trust and reasonable closing fees assessed by the Title Company will appear on the HRP Loan Closing Disclosure (CD) but those fees will also not be paid by the applicant or deducted from the loan proceeds. The Administrator or Partner will review and approve the final first mortgage CD prior to funding. Title insurance is not required for the HRP subordinate mortgage.
Requirements: Borrower must execute the Borrower Certification form, acknowledging disclosure of all loan terms and contact information. Additional waiver/disclosure forms may be required.
Settlement: Title will be instructed to show any excess proceeds as a principal reduction to the Administrator on the first mortgage Closing Disclosure (CD) and return such funds for proper credit to the borrower, which will also provide sufficient documentation to demonstrate there was duplication of benefit. No changes to the HRP loan documents or loan amount shown on the CD are permitted as a result of excess proceeds.
Post-Closing: The original Deed of Trust will be recorded by title with all other original loan documents returned to Administrator via overnight courier. Any excess proceeds will be applied as principal reduction, with applicable notice delivered to the borrower upon receipt.
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 and any funds from a community foundation, the SBA, or other funders. Should a duplication of benefits be found, Housing Recovery funds in the amount of the duplication will need to be repaid to the Program. See Section 3 for more information on Duplication of Benefits.
Other Requirements: Additional waiver/disclosure forms may be required.
10 Equal Opportunity
The Program and any administrator or partner does not discriminate against applicants through its lending or eligibility review practices or in any other decision-making processes due to race, color, religion, gender, disability, sexual preference, age, family status and/or national origin.