Program Purpose and Overview

Click on the links to jump to relevant section:

• Eligibility
• Award Types
• Eligible Expenses
• Application Process
• Roles and Responsibilities

Program Purpose and Overview 

The purpose of the State of Colorado Housing Recovery Program (HRP) is primarily to provide additional rebuilding resources for those in need of assistance in order to remain in their communities following a natural disaster. Additionally, these funds are intended to reduce the extreme financial hardship of rebuilding, particularly for households on the margin.  The program also aims to promote rebuilding in accordance with high performance building standards adopted by local communities and voluntary sustainable building elements that exceed local code requirements, including the incorporation of fire-, wind-, and water-resistant building materials and energy efficiency measures. 

The program includes three different funding sources:

• the State Disaster Resilience Rebuilding (DRR) program,
• the Federal Community Development Block Grant (CDBG), and
• the Federal Community Development Block Grant for Disaster Recovery (CDBG-DR).

Through the Housing Recovery Program, disaster impacted households may apply for grants or loans. Grants are generally provided in the form of a three-year forgivable loan. The grant (forgivable loan) provides rebuilding funds to those whose household income is at or below 150% of the Area Median Income (AMI). Those with income above that level may apply for a traditional loan of up to $50,000 with favorable terms to assist with their rebuilding or renovation costs. Traditional loans are also available to households eligible for grant/forgivable loan funding if additional assistance is needed to complete their rebuilding. Together, this program aims to help Coloradans who have been affected by natural disasters not only rebuild their homes, but produce healthier, safer, and more resilient homes throughout the state.

Households applying for the Housing Recovery Program can also opt into the Colorado Energy Office’s (CEO) Recovery and Electrification Program through the Housing Recovery Program application site. This program offers rebates for incorporating select energy efficiency options that reduce the use of natural gas.

Households applying for the Housing Recovery Program can also opt into the Colorado Energy Office’s (CEO) Recovery and Electrification Program through the Housing Recovery Program application site. This program offers rebates for incorporating select energy efficiency options that reduce the use of natural gas.

Eligibility

Primary residences

Eligible applicants include persons who owned a disaster impacted home as their primary residence at the time of an eligible state-declared disaster (listed below) and own that property at the time of application. Eligible property types include: single family residences, duplexes, townhomes or condominiums, and manufactured homes or mobile homes permanently affixed to permanent foundations and taxed as real property. Eligible property types must have sustained major or severe damage from a declared disaster.

Second homes and short term rental properties are not eligible for this program.

If a local jurisdiction takes action to support an accessory or interim dwelling option as a principal residence as part of disaster recovery, these locally-allowed structures are eligible for HRP assistance when the principal single family dwelling was destroyed by an eligible state-declared disaster. 

Rental properties

Landlords who own long-term rental property are eligible for rebuilding assistance. Receipt of this assistance is conditioned on maintaining affordable rents for a period of at least 5 years Eligible rental property types include: single-family and multi-family rental properties, duplexes, townhomes, and manufactured housing permanently affixed to permanent foundation and taxed as real or personal property.

Rental property awards will be limited to forgivable loans at up to $100,000 in a renovation or reconstruction project plus up to $30,000 in hazard mitigation funds; no traditional loans will be issued for landlord applications and no debt-to-income review is necessary for landlord applications.

Eligible Disasters 

State and Federal disaster recovery funds have differing requirements. Federal funding used in the Housing Recovery Program is limited to the scope of the federal designation on December 30, 2021. The federal declaration for the Marshall Fire and Straight Line Wind Event limits the use of these funds to Boulder County.

State of Colorado funds may be used on state-declared Colorado disasters since 2018 where rebuilding or renovation costs were incurred after the Colorado enabling legislation was signed on May 17, 2022. A much wider geographic area is included in the eligible list of disasters in the SB 22-206 legislation. The list of eligible disasters where housing was lost or damaged is in Table 1 below.

Table 1: Housing Recovery Program Eligible Disasters

Tie to Disaster

Eligible properties must have sustained damage as a direct result of a qualifying disaster as indicated in Table 1 and had an outstanding need for reconstruction or repairs.  Damaged property must be within the declaration area of the relevant disaster.

Disaster-related damages may be validated through any of the following:

• FEMA records indicate a Real Property FEMA Verified Loss Amount.
• Insurance adjuster estimate or claim inspector report within 120 days of the disaster declaration date.
• SBA records indicated a verified loss for manufactured housing or real estate related losses.
• Documented post-disaster damage assessments from local government or non-profit relief agencies within 180 days of the disaster.
• Inspection or engineer’s report with documented damages within 120 days of the disaster event.
• Actual invoices or receipts for disaster related repairs within 120 days of the event.
• Time stamped photos of damage within 120 days of the disaster (subject to verification).

Alternative validation of a tie to a declared disaster may be considered on a case-by-case basis.

Award Types

Applicants may be eligible for a combination of rebuild loans (forgivable and traditional) and mitigation loans and grants contingent on the rebuilding gap. The maximum eligible amount is dictated by the income level of the applicant. 

• Rebuild Forgivable Loan (Grant): The maximum amount is $100,000 based on the household income level, contingent on the remaining rebuilding gap.
• Rebuild Traditional Loan: The maximum amount is $50,000 for all income levels, contingent on the remaining rebuilding gap and the ability to repay. 
• Mitigation Forgivable or Traditional Loan: The maximum amount for hazard mitigation is $30,000 (funded as a $5,000 grant, and a $25,000 forgivable or traditional loan, dictated by the income level and contingent on the remaining rebuilding gap. 
• Mitigation Grant: An applicant may also apply only for the mitigation grant of up to $5,000, which is not contingent on income level or rebuilding gap.

Additional considerations may apply for households with approved SBA loans. Refer to Section 3.2: Treatment of Households with SBA Loans for details.

Table 2: Loans (forgivable and traditional) and Grants Maximum Amounts by Area Median Income

Area Median Income varies by county and is dependent on household size. To find the income limits that apply to each household, please click here. Refer to Section 4: Household Income Determination for details. 

Households who are not applying for other Housing Recovery Program funds and request no more than the $5,000 grant may choose to apply for the Wind and Wildfire Home Protection Program only. The applicant will provide a general contractor/vendor paid invoice or receipt of payment for the eligible hazard mitigation measures to receive a maximum of $5,000 in the form of a grant. These funds will be reimbursed to the applicant for costs already incurred if the costs are eligible under program guidelines. If an applicant is unable to pay for a mitigation measure without receipt of these funds they may note that on the application and program staff will contact them to review their situation as an exception to the general policy. 

The Wind and Wildfire Home Protection Program application does not require the applicant to submit income or insurance information.  The State of Colorado Department of Local Affairs and their program manager reserve the right to physically inspect the home to validate that the mitigation work was completed.

Eligible Expenses

Owners of primary owner-occupied residences at the time of the disaster and at the time of application, may apply for eligible expenses that include: 

• Direct costs of repairs or reconstruction of a damaged or destroyed primary residence including costs to rebuild to an advanced fire or other natural hazard mitigation standard;
• Architectural, engineering, permitting or other soft costs/fees associated with repairing or rebuilding a primary residence;
• Soil sampling and air quality monitoring;
• Clearance and demolition costs including concrete and other foundation material removal and removal of hazardous materials including (but not limited to) asbestos;
• Private road or bridge repair/replacement if necessary to access a primary residence;
• Costs associated with using building and site design measures that reduce risk to natural hazards including fire resistant building materials and landscape design; 
• Costs to replant climate ready trees and vegetation;
• Temporary rental assistance or storage costs during relocation, rebuilding or recovery work; and
• Other recovery costs not covered by other sources that will increase resilience to future disasters.

Due to the lag time between the disaster impact and the availability of recovery funds, the State does anticipate that in some cases individual households will move forward with the reconstruction of their home and pay contractors prior to the execution of any loan (forgivable or traditional).  While it is preferable to pay a contractor with HRP funds, it is allowable to pay the homeowner directly for costs already incurred. Payment in the form of a reimbursement may be made to homeowners under the following conditions:

• An invoice for eligible expenses with itemized costs,
• Proof of payment by the homeowner,
• Proof that contractor is not on the Federal Debarment list, and
• Review of cost reasonableness using estimating software, comparison of like
  projects, or review by a qualified contractor.

Manufactured (Mobile) Home Recovery

Manufactured or mobile homes damaged by a declared disaster are eligible for HRP funding in essentially the same manner as stick-built homes. Damage reporting, estimates for the renovation repairs, insurance claims or payments, ownership, and the homeowner resources for the repairs all mirror standard HRP guidelines and processes. 

However, due to state and federal regulations concerning the age of manufactured housing and the damage that may have occurred, repair or replacement of manufactured housing includes certain nuances not present in a stick-built home reconstruction or renovation. Damage to manufactured homes, like stick-built homes, must also have a documented direct tie-back to the declared disaster. HRP is not responsible for and will not provide funding for deferred maintenance of manufactured or mobile homes.

The baseline for HRP to be used to assist in manufactured home repair or replacement includes:

• No HRP funds to be provided to repair a manufactured home built prior to 1976,
• No HRP funds to be provided for repair of a manufactured home if the estimated cost to repair a post-1976 home exceeds 50% of the fair market value of that home; if damages exceed 50% of the value, it may be eligible for replacement, and
• HRP funds are available  for repair or replacement of damaged manufactured homes that were identified as disaster related in accordance with Section 1.1.4 above.

Wind and Wildfire Mitigation Measures

Eligible HRP expenses include wind and wildfire  mitigation measures for two types of structures: stick-built homes and manufactured (or mobile) homes. Mitigation measures eligible for additional funding up to the maximum award amounts are shown in Table 3. 

Table 3: Wind and Wildfire Mitigation Measures

If a reconstruction or renovation estimate includes one or more of these items, the homeowner is eligible to receive up to the total line item amount listed above (the actual cost up to the listed amount). 

Recovery from Smoke and Ash Damage

The impacts of a fire disaster may continue downwind away from the actual area where homes and property were destroyed by any fire. Smoke and ash damage to homes outside of any burn scar can be significant and are as much a result of the fire as the damage and loss within the burn area. Repair and renovation of properties due to smoke and ash damage is an eligible expense within the geographic area designated in either the State or Federal disaster declaration. 

Eligibility

• Fire and smoke/ash affected residences located within the state or federally-declared disaster area, and
• Residence with documented smoke/ash damage by third parties including an industrial hygienist, window and roofing companies, engineering firms, HVAC companies, restoration companies with IICRC certified technicians  and other related contractors.

Eligible expenses

• Remediation costs already incurred following the effective date of disaster or legislation,
• Remediation costs per a General Contractor bid or proposal,
• Industrial hygienist costs, and
• Permit, engineering and architectural fees.

Expenses may be reviewed by the State or their agent for cost reasonableness.

Documentation requirements

Third party verification of eligible expense costs to include:

• Invoice and/or receipt to verify costs.
• Proof of payment for reimbursement
• Verification of insurance claim and final payment or denial (if applicable)

Application Process

Applicants will generally apply through a subrecipient or vendor administering HRP funding (Program Administrator) portal. In some cases, applications will be made directly to DOLA. Some local governments with fewer applicants may elect to manage the application and intake process locally. Check with your DOLA regional manager or contact DOLA directly at dola_dlg_helpdesk@state.co.us to see what option has been implemented in your community.

The program administrator will work with applicants to complete and finalize applications and establish any grant or loan closing directly with that applicant. The applicant must be the current subject property owner as well as the owner of record on the declared disaster date(s). Ownership will be verified through public records, warranty deeds and real estate tax records.

Roles and Responsibilities

Department of Local Affairs responsible for:

• Establishing program guidelines and policies including addressing exceptions to program guidelines and policies.  
• Contracting with administering agencies including local governments or non-profit (and/or housing authority) administrators.
• Program and contract monitoring of local governments and non-profit (and/or housing authority) administrators.
• Payment processes for administering entities.
• Performance reporting as required for State and Federal programs.
• Compliance with State and Federal regulations to include monitoring of participating local governments.

Program Administrator (Subrecipients or Vendor administering HRP funding) responsible for:

• Application intake and processing including award determination and duplication of benefit review.
• Quality control and compliance with program guidelines and policies.
• Payment schedules for household applicants.
• Financial and performance reporting to the State via the Department of Local Affairs.
• Provides policy advice and program input based on lessons learned from program implementation.
• Elevate appeals, exemptions or waivers to the State as required.

Local Governments responsible for:

• Assisting in communication to the disaster-impacted community.
• If needed, identify or serve as the administering agency for the local application intake process.