The Down Payment Assistance Loan (DPAL) is designed with favorable terms to help first-time homebuyers purchase a home within the city limits of Portland. The funding source of the awarded DPAL will determine where in the city the home must be located. Funding is subject to availability.
The Down Payment Assistance Loan is a second mortgage loan funded by the Portland Housing Bureau (PHB), and it is used in conjunction with a first mortgage loan from a participating lender.
PHB has partnered with local community partners to identify and select eligible households for the program. To get started, please see the resources below.
The Portland Housing Bureau has partnered with the Minority Homeownership Assistance Collaborative (MHAC), as well as organizations such as PCRI and Hacienda CDC to identify and select eligible households for the Down Payment Assistance Loan program.
To get started, contact one of our Down Payment Assistance Loan community partners:
- African American Alliance for Homeownership (AAAH)
- Hacienda Community Development Corporation
- Native American Youth and Family Center (NAYA)
- Portland Community Reinvestment Initiatives, Inc. (PCRI)
In addition, PHB also partners with the following agencies to provide homebuyer counseling, education, and homeownership assistance:
Eligibility & Terms
To qualify you must:
- Be working with a Homebuying Counselor at one of the Community Partners (see above) and assessed to be mortgage ready.
- Be a first-time homebuyer (defined as not having owned a home in the past three years).
- Have an annual household income at or below 100% of Portland’s current Area Median Income (AMI), adjusted for family size. Applicable household income limits are determined by funding source and/or bedroom size of the home to be purchased, and in some cases may be set at a maximum annual household income of at or below 80% AMI. The Homebuying Counselor will confirm the income limit of the award.
Find out your estimated AMI
- Meet first mortgage lender’s financing requirements.
- Maintain no more than $10,000 in combined liquid assets (cash, bank checking and/or savings accounts, CD’s and equivalent) at closing. Liquid assets above this limit, at the time of closing, must be used towards the home purchase.
- Be a US citizen or legal resident.
- Complete a US Department of Housing and Urban Development (HUD) approved homebuyer education class.
- Provide a minimum borrower investment of no less than $500 (gift funds are allowed).
- Homebuyers looking to purchase a home in the Interstate Corridor Urban Renewal Area (ICURA) must also be a participant in the N/NE Homeownership Preference Policy. Learn more about the N/NE Preference Policy.
- Residential properties must be located within the City Limits of Portland. The funding source of the awarded DPAL will determine where in the city the home must be located. Assistance for a home purchase within the Interstate Corridor Urban Renewal Area (ICURA) is subject to the N/NE Homeownership Preference Policy.
- Single-family units only, including existing condos and town homes.
- Short sales are not eligible unless the buyer can document that all lien holders have already agreed to the sale price and closing is possible within the standard time period (typically 30 to 45 days).
- DPAL award amounts can be up to $80,000 - $100,000, depending on funding source and location of home
- Depending on funding source of the DPAL award, a minimum of 10% of the award will be set aside as a grant for post-purchase Home Improvement. (See below for more about the Home Improvement Grant Fund.)
- 30-year loan term
- 0.00% interest per year with an Annual Percentage Rate (APR) of 0.012%
- During the 30-year term payments are deferred until the sale of the home, refinance of the first mortgage, or when no longer occupied as primary residence; at such time, the entire principal balance is due.
- Must be used with a first mortgage loan from a participating lender.
- Loan must be secured by the purchased property by a lien no lower than second position.
- $500 origination fee plus other third-party closing costs apply.
The DPAL (loan portion) contains the option of loan forgiveness beginning at the 15th anniversary of the loan.
- Fifty percent (50%) of the loan is forgiven upon the 15th anniversary of the loan.
- Three percent (3%) of the original loan amount will be forgiven annually on the anniversary date of the original loan note, starting year 16 and continuing until year 29.
- At the end of year 30, any remaining balance of the DPAL is forgiven.
To be eligible for loan forgiveness, the homebuyer:
- Must maintain primary residence at (occupy) the home securing the DPAL second lien throughout the term of the loan.
- Must maintain compliance with the loan note, including maintaining homeowner’s insurance on the property.
Home Improvement Grant Fund
- 10% of the award amount will be granted to the homebuyer and will be deposited into a Home Improvement Grant Fund managed by PHB (disbursements subject to PHB approval).
- Grant funds must be spent on eligible improvements within six months of loan closing.
- Once Home Improvement Grant Fund has been disbursed and closed, no more property inspections are required.
How to Apply
If you believe you may be eligible for a Down Payment Assistance Loan, see How to Apply.
Contact one of the four DPAL Community Partners to make appointment with a homebuyer counselor. They can help you with an initial qualification assessment and explain the program requirements.