DC reverse-mortgage rescue fund now pays condo and HOA fees
DC reverse-mortgage rescue fund now pays condo and HOA fees
2026-09-09 · District of Columbia · Legislation
A District of Columbia association carrying an elderly owner in arrears has a new place to send them. Since May 2, 2025, the DC Housing Finance Agency's Reverse Mortgage Foreclosure Prevention Program is a permanent program rather than a pilot, its ceiling has risen from $25,000 to $40,000 per household, and condominium fees and homeowner association fees are on the list of debts the money can clear.1
The change arrived inside a housing omnibus — the Fairness and Stability in Housing Amendment Act of 2024 — and it is easy to miss, because the same Act is better known for making virtual association meetings permanent.
What the measure does
The Act amends D.C. Code § 42-2703.07a, the DC Housing Finance Agency Act provision that created the program. Four edits carry the change.
“As a pilot program” is struck. The program had been authorized in pilot form. That qualifier is gone, and with it the annual question of whether it still exists.
The cap moves from $25,000 to $40,000. That is the maximum assistance available per household.
Association fees join the eligible debts. The program previously reached tax and property-insurance arrears. The amended text adds “condominium fees, and homeowner association fees” alongside them.2
Eligibility extends to a non-borrowing spouse. A homeowner “whose spouse has executed” the reverse mortgage now qualifies — the scenario where the borrower dies or moves to care and the surviving spouse is left holding a loan they did not sign.
Why the reverse-mortgage case is the hard one
Reverse mortgages fail in a particular way. The loan itself requires no monthly payment, so a borrower can service it indefinitely on a fixed income. What triggers default is the side obligations — property taxes, hazard insurance, and, in a condominium, the monthly assessment. Miss those and the servicer can call the loan.
Until this amendment, DC's rescue fund could pay two legs of that stool and not the third. An association assessment is not a tax and it is not a property-insurance premium, so an owner facing foreclosure over unpaid condominium assessments fell outside the program even though the mechanism destroying them was identical.
What it changes for boards and managers
This is a collections tool, and it works as one for DC associations.
It changes what the delinquency letter should say. An association that identifies an owner over 62 with a reverse mortgage now has something concrete to point at other than the lien and foreclosure track. Up to $40,000 in arrears can be retired without the association spending anything, without a payment plan the owner will fail, and without the association acquiring a unit it does not want.
It is better money than a payment plan. An assistance award clears the debt. A payment plan spreads it across months during which assessments keep accruing, which is why so many of them end where they started.
The surviving-spouse fix closes a common gap. Boards see this pattern repeatedly: the borrower dies, the surviving spouse stays in the unit, the servicer starts a due-and-payable process, the assessments stop, and the association is now dealing with someone who has no standing under the loan and no money. That spouse is now eligible in their own right.
Verify before you promise. The statute sets the ceiling and the eligible uses; DCHFA administers the program and controls underwriting, documentation and award timing. Nothing here entitles an owner to a payout, and an association that tells an owner the money is available has taken on a representation it cannot deliver. Point at the program; do not underwrite it.
The interaction with the association's lien
An assistance award that pays assessment arrears does not disturb the association's statutory lien — it satisfies the debt the lien secures, which is the outcome the lien exists to produce. Two sequencing points are worth a board's attention.
First, the arrears figure has to be right and current. A payoff quoted to a third-party payer needs the same care as one quoted at resale: assessments continuing to accrue between the quote and the disbursement are the association's problem to anticipate, not the program's.
Second, a foreclosure already in motion is a different conversation. Where an association has begun enforcing, the practical question is whether it is prepared to hold while an application is processed. That is a business decision for the board, taken in advance and recorded, rather than one made under time pressure at the courthouse.
What to watch next
The number to watch is uptake. The program has been small, and its expansion to association fees is new enough that DC associations have not built it into their collections policies. A program that is permanent and better funded but unused by the constituency it now covers is the likeliest outcome absent someone telling owners it exists — and the entity best positioned to tell them is the association sending the delinquency notice.
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