Housing Services:
Rate Reducer

Features/Benefits

Rate Reducer is PDC’s investment in making home ownership more affordable by reducing the interest rate on a PDC-originated first mortgage. Depending upon your goals, the reduced interest rate can lower your monthly payment or enable you to afford a larger mortgage.

Rate Reducer is a second mortgage loan with the proceeds used to pay discount points and permanently reduce the interest rate you pay on your first mortgage loan from PDC. The Rate Reducer loan does not require a monthly payment and it is completely forgiven after ten years.

Eligibility Requirements

Eligible Homebuyer

Homebuyer or existing homeowner (do not need to be a first-time homebuyer)
Owner-occupied residences only
Gross annual household income at or below 80% or 100% of Portland’s Median Family Income (MFI), adjusted for family size and the number of bedrooms in the home as follows:

Household Size	Two or less Bedrooms 80% MFI (2008)*	Three or more Bedrooms 100% MFI (2008)*
1	$38,000	$47,250
2	$43,450	$54,000
3	$48,900	$60,750
4	$54,300	$67,500

* 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
First-time homebuyers 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 Area (URA) subject to available funding. For a map of these areas, go here
Single-family units including condos and town homes
Maximum purchase price not greater then the Federal Housing Authority (FHA) maximum loan amount, currently $304,950

Loan Terms

10-year term forgiven once the term expires provided the borrower has maintained the property as owner-occupied for the life of the loan
4.00% interest per year with an Annual Percentage Rate of 5.10% (assumes a $10,000 loan amount)
Must be used in with a PDC-originated first mortgage loan
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 becomes due and payable
Appraisal based on an “after-improved” value, to support the sales price/refinance balance plus the cost of the improvements
$350 loan origination fee; $350 construction management fee; other necessary third party fees also apply
Maximum Combined Loan-To-Value, 100%

Home Improvement

Borrower must complete a minimum of $5,000 in Immediate Renovations; renovation funds are deposited in a PDC-controlled account; must use funds within six months of loan closing.

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