Colorado

Colorado HB24-1152 amended the Colorado Common Interest Ownership Act (CCIOA) to void HOA bans on ADUs. The new C.R.S. § 38-33.3-106.5 prohibits any provision of a Declaration, Bylaw, or Rule from restricting the creation of an ADU as an accessory use to any single-unit detached dwelling. Restrictions adopted before or after the effective date are void as a matter of public policy. The provision applies to all common-interest communities (CCIOA, pre-CCIOA, and limited-expense communities) and is not subject to the small-HOA exemptions in SB24-021. Associations may impose 'Reasonable Restrictions' defined as substantive conditions that do not unreasonably increase cost, effectively prohibit construction, or extinguish the ability to construct an ADU.

Colorado operates one of the most explicit state ADU finance regimes in the country, created by HB24-1152. The Colorado Office of Economic Development and International Trade (OEDIT) funded an $8 million revolving program; the Colorado Housing and Finance Authority (CHFA) administers loans, interest-rate buydowns, and credit enhancement for participating lenders. The application period opened to lenders in December 2025; ADU finance products become available to eligible Colorado residents in ADU Supportive Jurisdictions in spring 2026, with interest-rate buydowns and credit enhancement reaching borrowers later in 2026. Eligibility is restricted to ADU Supportive Jurisdictions (subject jurisdictions automatically qualify; non-subject jurisdictions must apply to DOLA for certification).

• Accessory Dwelling Unit Finance Program
• Accessory Dwelling Unit Grant Program (ADUG)
• CHFA Homeownership Programs

Colorado launched a state FAIR Plan in April 2025 in response to wildfire-driven non-renewal pressure following the 2021 Marshall Fire (over 1,000 homes destroyed; 74% of affected homeowners underinsured). HB23-1288 (signed 2023-05-12) authorized the Colorado FAIR Plan Association as the insurer of last resort; residential applications opened 2025-04-10. Coverage is capped at $750,000 for residential and $5M for commercial; policies are written on actual cash value (ACV) rather than replacement cost; eligibility requires three declines from licensed standard insurers and confirmation by a licensed agent. Colorado is the sixth-costliest state for homeowners insurance with ~$4,072 average annual premium for $300K dwelling coverage; premiums rose 58% from 2018 to 2023. Wildland-urban interface (WUI) exposure drives most underwriting decisions; defensible space, Class A roofing, and Wildfire Prepared Home certifications meaningfully affect rates.

Colorado operates the most fully-developed state ADU support framework in the country outside California. The Colorado Department of Local Affairs (DOLA) Division of Local Government (DLG) maintains an ADU Toolkit and a guide to providing pre-approved ADU plans, certifies ADU Supportive Jurisdictions, and administers the ADUG grant program for jurisdictions implementing those tools. The framework explicitly funds three local activities: developing pre-approved ADU plans, providing technical assistance to homeowners, and waiving or reducing ADU fees. ~$1.6M flowed through ADUG round 1 (FY2025-2026); round 2 deadline 2026-03-18. The Accessible/Visitable ADU incentive program adds a separate funding track for ADUs designed to ADA-style standards.

• ADU Supportive Jurisdiction Certification
• Pre-Approved ADU Plans Toolkit
• Accessory Dwelling Unit Grant Program (ADUG)
• Incentivize Accessible and Visitable ADUs