Purpose: COVID-19 pandemic is a World Health Organization day-today work and has a significant crisis on the physical and mental health of humans. However, little is known about the mental health crisis of the pandemic in Sub-Saharan countries. Therefore, this study aimed to determine the magnitude of psychological problems and associated factors among communities living in Addis Ababa, Ethiopia. Methods: A community-based cross-sectional study design was conducted from March 10 to 30, 2020. Data were collected from 420 respondents selected using a consecutive sampling technique. An online self-administered and Depression, Anxiety, and Stress Scale (DASS-21) survey during the initial phase of the pandemic was conducted to assess the presence of psychological problems for the last two weeks in response to the infection. Results: The magnitude of the psychological problem from moderate to severe levels was 66.4%. The predictor variables of the outcome were female gender, above the secondary level of education, monthly income below 3000 ETB, and more than three family size at 95% CI, P<0.05. Conclusion: At the time of the initial COVID-19 pandemic in Ethiopia, nearly two-thirds of the respondents reported moderate to severe levels of psychological problems. Therefore, working on those identified factors would be vital to promote the mental resilience of a community towards the pandemic.