--- title: "Colorado Reverse Mortgage: 5-Year Disaster Protection, Benefits Shield & 2026 Payouts" description: "Colorado HECM guide covering the 5-year natural-disaster absence protection (§ 11-38-107), the means-tested benefits shield (§ 11-38-110), Property Tax Deferral subordination, and 2026 payoff examples." lang: en json-ld: | [ { "@context": "https://schema.org", "@type": "WebSite", "name": "HECMAcademy", "url": "https://hecmacademy.com", "description": "Independent, plain-English reverse mortgage education for U.S. homeowners age 62 and older. 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Explains HECM eligibility, costs, protections, and payout options without sales pressure." }, { "@context": "https://schema.org", "@type": "BreadcrumbList", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://hecmacademy.com" }, { "@type": "ListItem", "position": 2, "name": "Blog", "item": "https://hecmacademy.com/blog" }, { "@type": "ListItem", "position": 3, "name": "Reverse Mortgage Colorado", "item": "https://hecmacademy.com/blog/reverse-mortgage-colorado" } ] }, { "@context": "https://schema.org", "@type": "Article", "headline": "Colorado Reverse Mortgage in 2026: The 5-Year Natural Disaster Absence Protection, the Means-Tested Benefits Shield, and the Tax Deferral Subordination Problem", "description": "Colorado HECM guide covering the 5-year natural-disaster absence protection, the means-tested benefits shield, Property Tax Deferral subordination, and 2026 payoff examples.", "image": "https://hecmacademy.com/og-card.png", "author": { "@type": "Organization", "name": "HECMAcademy Editorial Team" }, "publisher": { "@type": "Organization", "name": "HECMAcademy", "logo": { "@type": "ImageObject", "url": "https://hecmacademy.com/og-card.png" } }, "datePublished": "2026-06-07", "dateModified": "2026-07-04", "mainEntityOfPage": "https://hecmacademy.com/blog/reverse-mortgage-colorado" }, { "@context": "https://schema.org", "@type": "FAQPage", "mainEntity": [ { "@type": "Question", "name": "How does Colorado's 5-year natural disaster absence protection work with a HECM?", "acceptedAnswer": { "@type": "Answer", "text": "Under C.R.S. § 11-38-107 (added by HB23-1266, 2023), a Colorado HECM lender cannot treat an absence caused by a natural disaster that renders the home uninhabitable as an occupancy default for up to five years, provided the borrower continues to work toward returning. This extends HUD's default 12-month occupancy trigger for disaster-displaced borrowers." } }, { "@type": "Question", "name": "Are Colorado HECM proceeds counted for Medicaid or SNAP eligibility?", "acceptedAnswer": { "@type": "Answer", "text": "Under C.R.S. § 11-38-110, HECM proceeds — including undrawn line-of-credit availability and drawn funds held for a reasonable time — are shielded from being counted as a resource or asset for Colorado means-tested benefit calculations. Confirm program details with the relevant county office." } }, { "@type": "Question", "name": "Can I combine Colorado's Property Tax Deferral with an existing reverse mortgage?", "acceptedAnswer": { "@type": "Answer", "text": "Generally, no. Colorado's Property Tax Deferral (C.R.S. § 39-3.5-102) will not accept a home with an existing reverse mortgage unless the HECM lender executes a subordination agreement. Most HECM servicers will not subordinate a first-lien HECM to a later tax-deferral lien, which effectively closes off the Deferral for most post-HECM borrowers." } }, { "@type": "Question", "name": "Does Colorado's Senior Homestead Exemption still apply if I take out a HECM?", "acceptedAnswer": { "@type": "Answer", "text": "Yes. The Senior Homestead Exemption (50% of the first $200,000 of actual value, age 65+, 10-year continuous ownership/occupancy, no income test) is tied to owner-occupancy, not encumbrance. It was reinstated for tax year 2025 after prior budget suspensions." } }, { "@type": "Question", "name": "My Boulder or mountain resort home is worth well over $1.25 million. Does the FHA cap limit me?", "acceptedAnswer": { "@type": "Answer", "text": "Yes. The 2026 FHA HECM lending limit is $1,249,125. For Boulder single-family homes and most Aspen/Vail/Telluride resort properties above the cap, ask lenders about proprietary jumbo reverse mortgages." } }, { "@type": "Question", "name": "Does Colorado require its own reverse mortgage counseling beyond HUD?", "acceptedAnswer": { "@type": "Answer", "text": "Federal HUD counseling with a HUD-approved HECM counselor is required. The Colorado Reverse Mortgage Act layers state substantive protections on top of the HUD counseling standard." } } ] } ] --- Free HECM guidance — no sales pressure Mon–Fri, 9am–6pm ET [Contact](/contact) [![HECMAcademy — reverse mortgage education](/__l5e/assets-v1/11c6d22b-7f84-4add-8068-34dad2c8a5b7/hecmacademy-logo.png)](/) [How it works](/#how) Learn [Free Guide](/guide)[FAQ](/faq)[Blog](/blog)[Retirement Tax Guide](/retirement-tax-guide)[Heirs Guide](/heirs-guide) By State [California](/reverse-mortgage/california)[Texas](/reverse-mortgage/texas)[Florida](/reverse-mortgage/florida)[Arizona](/reverse-mortgage/arizona)[Colorado](/reverse-mortgage/colorado)[Virginia](/reverse-mortgage/virginia)[Utah](/reverse-mortgage/utah)[Washington](/reverse-mortgage/washington)[Ohio](/reverse-mortgage/ohio)[Illinois](/reverse-mortgage/illinois)[Maryland](/reverse-mortgage/maryland)[North Carolina](/reverse-mortgage/north-carolina)[Oregon](/reverse-mortgage/oregon)[Hawaii](/reverse-mortgage/hawaii) [All states →](/reverse-mortgage) [Calculator](/calculator)[About](/about) [Expert advisor (888) 203-8887 Mon–Fri, 9am–6pm ET ](tel:+18882038887)[Check Eligibility](/#quickcheck) [](tel:+18882038887)[Check Eligibility](/#quickcheck) [HECMAcademy](/) / [Blog](/blog) / Colorado Reverse Mortgage Guide HECMAcademy · Colorado · 10 min read · Updated July 2026 # Colorado Reverse Mortgage in 2026: The 5-Year Natural Disaster Absence Protection, the Means-Tested Benefits Shield, and the Tax Deferral Subordination Problem Colorado has one of only a handful of state reverse mortgage acts in the country — [C.R.S. §§ 11-38-101 through 11-38-112](https://leg.colorado.gov/agencies/office-legislative-legal-services/colorado-revised-statutes) — and two of its provisions are genuinely unique. **§ 11-38-107**, added by HB23-1266 in 2023, gives Colorado HECM borrowers up to **five years of protected absence following a natural disaster** without triggering default. **§ 11-38-110** shields HECM proceeds from means-tested benefit calculations. If you live in a wildfire or flood zone, or you rely on Medicaid or SNAP, these two provisions materially change the HECM calculus in Colorado versus any other state. Sources: Colorado Revised Statutes, [Title 11, Article 38](https://leg.colorado.gov/agencies/office-legislative-legal-services/colorado-revised-statutes); [HB23-1266 (2023)](https://leg.colorado.gov/bills/hb23-1266); [SB24-111 (2024)](https://leg.colorado.gov/bills/sb24-111); Colorado Department of the Treasury — Property Tax Deferral; Zillow ZHVI (2025). ## In this article 1. [Colorado senior homeowner market](#co-market) 2. [Principal-limit examples by Colorado market](#co-table) 3. [Where the FHA cap matters in Colorado](#fha-limit) 4. [The Colorado Reverse Mortgage Act (§§ 11-38-101 to 112)](#co-rm-act) 5. [Senior Homestead Exemption & Property Tax Deferral subordination](#co-senior-tax) 6. [Colorado HECM FAQ](#faq) 7. [How to apply](#apply) ## Colorado senior homeowner market Colorado's senior housing market divides into three price zones: the Front Range core (Denver, Fort Collins, Colorado Springs), high-amenity mountain towns (Aspen, Vail, Telluride, Crested Butte), and the more moderate Western Slope and Eastern Plains. Wildfire and flood exposure — Marshall Fire, Cameron Peak Fire, 2013 Front Range floods, and Interstate 70 corridor risk — is a material factor across the Front Range and mountains, which makes the Reverse Mortgage Act's § 11-38-107 protection uniquely relevant. ## Principal-limit examples by Colorado market (mid-2026) The following illustrates estimated principal limits for a 70-year-old borrower at expected rates typical of mid-2026, using Zillow Home Value Index (ZHVI) values. Market bracket Home Value Est. Principal Limit at Age 70 (~55%) After $85K existing mortgage payoff **Colorado Springs ($500K), Pueblo, Grand Junction** $450,000 ~$247,000 ~$162,000 **Denver ($525K), Fort Collins ($585K)** $625,000 ~$344,000 ~$259,000 **Boulder ($854K), close-in Denver neighborhoods** $875,000 ~$481,000 ~$396,000 _Illustrative estimates using a ~55% principal-limit factor at age 70 and expected rates typical of mid-2026. Actual figures depend on your specific age, appraised value, expected rate at closing, and HUD's current tables. The 2026 FHA HECM lending limit is $1,249,125. Metro medians per Zillow ZHVI (2025)._ ## Where the FHA cap matters in Colorado Denver, Fort Collins, and Colorado Springs medians sit below the $1,249,125 FHA cap. Boulder single-family homes routinely approach or exceed it. The mountain resort corridor — Aspen, Vail, Telluride, and much of Summit and Pitkin counties — is almost entirely above the cap. On those properties the standard HECM principal-limit calculation stops at $1,249,125 regardless of appraisal; proprietary jumbo reverse mortgages are the alternative to price out. ## The Colorado Reverse Mortgage Act (§§ 11-38-101 to 112) Two provisions in the Colorado Reverse Mortgage Act genuinely stand out among state HECM overlays: - **§ 11-38-107 — 5-year natural disaster absence protection.** Added by [HB23-1266 (2023)](https://leg.colorado.gov/bills/hb23-1266). If your Colorado home is rendered uninhabitable by a natural disaster (wildfire, flood, tornado, hail damage sufficient to displace occupancy, etc.), a Colorado HECM lender cannot treat the resulting absence from the property as an occupancy default for up to five years, provided you continue to work toward returning. HUD's default rule is a 12-month absence trigger; Colorado extends that window materially for disaster-caused displacement. This is directly relevant to the Marshall Fire recovery corridor, Cameron Peak burn area, and much of the Colorado wildland-urban interface. - **§ 11-38-110 — means-tested benefits shield.** HECM proceeds — both undrawn line-of-credit availability and drawn funds held for reasonable time — are shielded from being counted as a resource or asset for Colorado means-tested benefit calculations. This is meaningful for Colorado seniors who rely on Health First Colorado (Medicaid), SNAP, or similar programs and would otherwise be at risk of losing benefits after a HECM draw. ## Senior Homestead Exemption and the Property Tax Deferral subordination problem Colorado offers two senior property-tax programs; both interact with a HECM: - **Senior Homestead Exemption (C.R.S. § 39-3-203).** Exempts 50% of the first $200,000 of actual value on a primary residence. Age 65+, 10-year continuous ownership and occupancy, no income test. Suspended in past state budget cycles and reinstated for tax year 2025. HECM has no effect on eligibility. - **Property Tax Deferral (C.R.S. § 39-3.5-102).** Lets qualifying homeowners defer payment of property taxes; the state pays and files a lien. **Colorado's Deferral will generally not accept a home with an existing reverse mortgage unless the HECM lender executes a subordination agreement** allowing the Deferral lien to sit ahead of, or in an acceptable position relative to, the HECM lien. Most HECM servicers will not subordinate a first-lien HECM to a subsequent tax-deferral lien, which effectively closes off the Deferral for many post-HECM Colorado borrowers. [SB24-111 (2024)](https://leg.colorado.gov/bills/sb24-111) added portability of the Deferral between residences but did not change the subordination requirement. ## Colorado HECM FAQ ### How does Colorado's 5-year natural disaster absence protection work with a HECM? Under C.R.S. § 11-38-107, added by HB23-1266 in 2023, a Colorado HECM lender cannot treat an absence caused by a natural disaster that renders your home uninhabitable as an occupancy default for up to five years, provided you continue to work toward returning. This is a Colorado-specific extension of HUD's default 12-month occupancy trigger and matters especially in the wildland-urban interface and the Marshall Fire / Cameron Peak recovery areas. ### Are Colorado HECM proceeds counted for Medicaid or SNAP eligibility? Under C.R.S. § 11-38-110, HECM proceeds — including undrawn line-of-credit availability and drawn funds held for a reasonable time — are shielded from being counted as a resource or asset for Colorado means-tested benefit calculations. Always confirm current program rules with your county's Health First Colorado or SNAP office, but the statutory shield exists. ### Can I combine Colorado's Property Tax Deferral with an existing reverse mortgage? Generally, no. Colorado's Property Tax Deferral (C.R.S. § 39-3.5-102) will not accept a home with an existing reverse mortgage unless the HECM lender executes a subordination agreement allowing the Deferral lien to sit ahead of the HECM. Most HECM servicers will not subordinate a first-lien HECM to a subsequent tax-deferral lien, which effectively closes the Deferral off to most post-HECM borrowers. ### Does Colorado's Senior Homestead Exemption still apply if I take out a HECM? Yes. The Senior Homestead Exemption (C.R.S. § 39-3-203) — 50% of the first $200,000 of actual value, age 65+, 10-year continuous ownership/occupancy, no income test — is tied to owner-occupancy, not to whether the home is encumbered. It was reinstated for tax year 2025 after prior budget suspensions. ### My Boulder or mountain resort home is worth well over $1.25 million. Does the FHA cap limit me? Yes. The 2026 FHA HECM lending limit is $1,249,125. Value above the cap does not increase your principal limit on a standard HECM. For Boulder single-family homes and most of Aspen, Vail, Telluride, and Summit/Pitkin county resort properties above the cap, ask lenders about proprietary jumbo reverse mortgages, which are not FHA-insured. ### Does Colorado require its own reverse mortgage counseling beyond HUD? Federal HUD counseling with a HUD-approved HECM counselor is required. The Colorado Reverse Mortgage Act layers state protections on top; the counseling requirement itself is the HUD standard. ## How to apply HECMAcademy provides a free pre-qualification form matching Colorado homeowners with FHA-approved lenders licensed in the state. [Start your pre-qualification →](/#prequal?src=blog_reverse_mortgage_colorado) HUD counseling is required before any Colorado lender may accept your application. [Find a HUD-approved counselor in Colorado →](https://entp.hud.gov/idis/counselor/RcsSearchServlet?searchstate=CO) ### Related articles - [Utah Reverse Mortgage Calculator →](/blog/utah-reverse-mortgage-calculator) - [Washington State Reverse Mortgage Guide →](/blog/reverse-mortgage-washington) - [Oregon Reverse Mortgage Calculator →](/blog/oregon-reverse-mortgage-calculator) - [HECM Education Hub →](/blog) [Estimate Your Colorado HECM — Free & No Obligation](/#prequal?src=blog_reverse_mortgage_colorado) Reviewed by the HECMAcademy Editorial Team · Last updated June 2026 · [How we vet this content](/about#editorial-standards) ## Get the Free HECM Guide (PDF) An 8-page plain-English guide to how the FHA HECM works — sent straight to your inbox. Company website First nameLast name EmailPhoneZIP code Age range 55-6162-6970-7980+ I agree to receive calls and texts from HECM Academy about reverse mortgages. Not required to get the guide. Reply STOP to opt out. 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