Media Contact: Chynna Cowart
chynna.cowart@state.co.us | 303-656-7464
Last November, the Department of Local Affairs (DOLA) introduced the Housing Recovery Program.
The State of Colorado Housing Recovery Program's objective is to offer more resources for rebuilding to people who require support in order to stay in their communities in the wake of a natural disaster. The initiative intends to encourage rebuilding in line with community-adopted high performance building standards and optional sustainable building components that go beyond local code requirements, such as the use of fire-resistant building materials and energy efficiency measures.
To address community concerns about the ability to qualify, the discrepancy between the rebuild estimate and the actual costs, and the difficulty of the loan application process, the Department of Local Affairs (DOLA) is implementing changes for those seeking additional assistance.
Changes to the Housing Recovery Program
Income Verification
DOLA will be using an alternative to the standard HUD Part 5 income verification process. The new process is based on the 1040 tax return. While there is still a need to confirm projected income, the Department will no longer need to collect information on assets, which was the most difficult aspect of the documentation. This will have little to no impact on what income category households fall into, but the documentation requirement will be significantly reduced.
Rebuilding Estimates
The Department is supplementing the estimates determined with the e2Value software to account for typical costs in the impacted area. DOLA is making changes to the estimating process including standardizing some of the add-ins such as additional concrete flatwork, landscaping, utility connections, etc. that are known will be prevalent due to the nature of the destruction. Add-ins to the estimate for additional mitigation costs are also eligible and encouraged. These changes will increase the overall rebuilding estimate with the effect of more households being eligible (demonstrable rebuilding gap) and will reduce the number of households that need to go through the appeal process to identify additional costs.
For the state-funded traditional loans ($50k limit), the use of a General Contractor will be allowed for an estimate, for those households that have one, as the basis of the award.
Note that because these funds are construction loans, the Department is protected from issuing more money than is needed for the reconstruction.
Mitigation for Housing
The mitigation portion of the funding essentially allows households to add up to an additional $30,000 ($10,000 for manufactured housing and mobile homes) to help cover the costs of certain fire mitigation activities. If the household is eligible for the grant (forgivable loan), this is added to the grant; if the household is eligible for the traditional loan, it is added to the traditional loan. For the mitigation funds in the Program, the cut-off is 120% AMI. If the household income is less than 120% AMI, it is a grant (forgivable) and if the household income is more than 120% AMI it is a traditional loan.
Eligible Mitigation Items
The mitigation improvements listed below contribute to up to an additional $30,000 award. Households may elect to do some or all of these improvements, but the additional award is capped at a maximum of $30,000. Any of the items below can be calculated as add-ins to document an increase in the overall rebuilding costs, which could also increase a household’s eligible award through the rebuilding portion of the grant or loan.
- In-home sprinkler systems — $8,000
- Fire and ember resistant siding — $15,000
- Fire resistant windows e.g. triple pane & metal-clad windows, etc — $15,000
- Non-combustible fencing or treatment within 5 feet of structure — $2,000
- Ember and flame resistant venting — $1,000
- Gutter guard — $1,500
The maximum award for mitigation improvements for manufactured homes is up to $10,000 with the following items being eligible:
- Insulation (pipe insulation and cold weather protection) — $5,000
- Tie downs/anchoring — $5,000
- Fire-resistant skirting — $2,500
In addition to increasing the potential award amount for adopting these mitigation activities, the items on the list above can also increase the overall award by contributing to a households’ eligible rebuilding costs.
For more information about the Housing Recovery Program, please visit the Program’s website.