Housing Services:
Down Payment Assistance Loan (DPAL)

The Down Payment Assistance Loan (DPAL) is a homebuyer assistance tool designed exclusively for first-time homebuyers who are buying a home in one of Portland’s Urban Renewal Areas. It is a second mortgage loan used in conjunction with a first mortgage loan from the Portland Development Commission (PDC). DPAL helps homebuyers:

• Avoid the cost of mortgage insurance!
• Increase their purchasing power!
• Enjoy lower monthly house payments!
• Obtain funding for immediate or after purchase repairs and improvements!

Essentially, the DPAL loan is gap financing that makes up the difference between what a homebuyer’s income will support and the higher sales price of a property.

Eligibility Requirements

Eligible Homebuyer

• First-time homebuyer (defined as not having owned a home in the past three years)
• Owner-occupied residences only
• Annual household income at or below 80% or 100% of Portland’s Median Family Income (MFI), adjusted for family size depending on the number of bedrooms in the home as follows:

* Higher household income limits apply for households of five or more persons

• Must meet standard first mortgage criteria for credit and down payment
• Combined liquid assets (cash and equivalent, stocks, bonds and bank deposit; excluding retirement accounts) cannot exceed six months of PITIMI payments at closing
• Must be a US citizen or legal resident
• Borrower must complete a homebuyer education workshop provided by a US Department of Housing and Urban Development (HUD) Certified Home Buyer Counseling Program

Eligible Property

• Residential properties located in a PDC Urban Renewal Areas (URA) subject to available funding. For map of theses areas, go here
• Single-family units only, including condos and town homes
• Maximum purchase price not greater then the Federal Housing Authority (FHA) maximum loan amount, currently $304,950

Loan Terms

• 4.00% simple interest per year with an Annual Percentage rate of 4.08% (assumes a loan amount of $50,000)
• 30-year loan forgiven once the term expires provided the borrower has maintained the property as owner occupied for the life of the loan
• Maximum loan amount, 25% of the purchase price, including 5% of the purchase price (20% of DPAL) must be used for “immediate renovations” or to fund a “Home Improvement Fund”
• Payments are deferred until the sale of the unit, refinance of the first mortgage, or when the homeowner no longer occupies the home as their primary residence; at such time, the entire principal plus accrued interest is due and payable
• Must be used in with a PDC-approved first mortgage loan
• $350 loan origination fee; $350 construction management fee; other third party fees apply

Home Improvement

To complete the required renovation borrower must choose between:

• Immediate Renovations – A minimum of 20% of the DPAL and a maximum 50% of the after-improved value must be deposited in a PDC-controlled account to pay for improvements made within six months of loan closing; appraisal is based on an “after-improved” value; maximum Combined Loan-To-Value is 100%

• Home Improvement Fund - A minimum of 20% of the DPAL must be deposited into a PDC-controlled Home Improvement Fund; home improvement funds must be spent within 24 months of loan closing; appraisal is based on an “as is” value; maximum Combined Loan-To Value is 105%

For more information call 503-823-3400, e-mail nhp@pdc.us

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