Coloradoans receive millions of dollars to pay off HOA debt

Colorado residents who are struggling to pay their homeowners association (HOA) fees due to the COVID-19 pandemic can now apply for a relief program that offers up to $25,000 per household. The program, funded by the American Rescue Plan Act, aims to prevent foreclosures and evictions caused by HOA debt.

How the program works

The HOA Assistance Program is administered by the Colorado Department of Local Affairs (DOLA) and the Colorado Housing Finance Authority (CHFA). The program has a total of $40 million available for eligible applicants, who must meet the following criteria:

  • They live in a property that is part of an HOA in Colorado
  • They have an outstanding balance of HOA fees or assessments as of March 13, 2020
  • They have experienced a financial hardship due to the COVID-19 pandemic, such as loss of income, increased expenses, or health issues
  • They have a household income that does not exceed 150% of the area median income

Applicants can apply online through the CHFA website or by contacting a participating housing counseling agency. The application deadline is June 30, 2024, or until the funds are exhausted, whichever comes first.

Why the program is needed

According to DOLA, more than 2.2 million Coloradoans live in properties that are part of an HOA, which is about 40% of the state’s population. HOAs are responsible for maintaining common areas and amenities, such as landscaping, pools, playgrounds, and security. HOAs charge fees or assessments to cover these costs, which can range from a few hundred to several thousand dollars per year.

Coloradoans receive millions of dollars to pay off HOA debt

However, due to the COVID-19 pandemic, many homeowners have faced financial difficulties and have fallen behind on their HOA payments. This can lead to late fees, interest charges, liens, and even foreclosure or eviction. DOLA estimates that there are more than 40,000 households in Colorado that owe more than $15,000 in HOA debt.

The HOA Assistance Program is designed to help these homeowners avoid losing their homes and to stabilize the HOA communities. The program will pay the HOA directly on behalf of the applicants, up to $25,000 per household. The payments will be in the form of a grant, which means that the applicants do not have to repay the money.

What the program hopes to achieve

The HOA Assistance Program is part of the state’s efforts to provide housing stability and recovery for Coloradoans affected by the COVID-19 pandemic. The program is expected to benefit not only the homeowners, but also the HOAs and the local economy.

By paying off the HOA debt, the program will help the homeowners avoid foreclosure or eviction, which can have devastating impacts on their credit, mental health, and future housing options. The program will also help the homeowners retain their equity and ownership in their properties, which can increase their wealth and financial security.

By receiving the payments, the HOAs will be able to maintain their financial health and continue to provide essential services and amenities for their residents. The HOAs will also be able to avoid legal costs and collection efforts, which can be time-consuming and expensive.

By preventing foreclosures and evictions, the program will also help the local economy by preserving the property values and tax revenues in the HOA communities. The program will also reduce the demand for emergency housing and social services, which can save the state and local governments money.

The HOA Assistance Program is one of the many ways that Colorado is using the federal funds from the American Rescue Plan Act to support its residents and businesses during the COVID-19 pandemic. The state has also allocated funds for rental assistance, utility assistance, broadband expansion, small business grants, and more.

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