The Home Repair Loan Program provides a 0% interest loan to help eligible homeowners with low and moderate incomes make critical home repairs to continue living safely in their homes. There are no monthly payments and the loan is forgiven after 15 years, as long as the homeowner remains in the home for that time.
The Home Repair Loan Program can help:
- Increase the livability and safety of homes by addressing electrical hazards, leaky roofs, broken furnaces, collapsing porches, and more
- Provide accessibility modifications to help homeowners live independently in their home
- Assist homeowners who receive a housing code violation to correct the conditions cited
Read on for more about eligibility, loan terms, and the home repair loan project process.
Eligibility & Loan Terms
To qualify, repairs must be critical to the health and safety of the owner occupants as determined by the Portland Housing Bureau’s (PHB) Construction Coordinators. Examples of critical repairs include:
- Damaged or failing building components: failing roofs, dry rotted floors, broken or damaged stairs, siding or foundations
- Imminent failure of heating, electrical or plumbing systems
- City of Portland housing code violations and other fire, health, and safety issues
- Other repairs as approved by PHB necessary to support retention of the home
- Own and occupy the property as their principal residence at application and throughout the term of the loan.
- Have a maximum annual household income up to 120% of Portland’s Area Median Income (AMI), adjusted for family size.
Find out your AMI
- Combined assets not to exceed $20,000 (does not include subject property, two cars, retirement accounts, or assets producing earning that represent a significant portion of annual income).
- Total debt to income ratio should not exceed 60% of total gross household income, unless approved for a deferred payment loan, then debt ratios do not apply.
- Clear title evidencing ownership, monetary encumbrances, and mortgaged property address.
- Funding is subject to availability. The program currently has funding for eligible homeowners who own and reside in a single-family residence located in the Interstate Corridor Urban Renewal Area in the City of Portland.
Verify URA on Portland Maps Interstate Corridor (ArcGIS map)
- Property taxes must be current or on deferred status.
- Homeowner’s insurance must be current.
- Existing mortgage(s) must be current.
- There must be equity in the property at least equal to loan amount.
- Maximum loan up to $40,000, but not more than total cost of allowable repairs
- 0% Annual Percentage Rate (0.0012% APR)
- 15-year loan term. After 15th year, the loan is completely forgiven
- Payment is deferred until sale, trade, refinance, or no longer owner-occupied
- Loan repayment options:
- Repayment in full
- Structured Repayment Settlement (full or partial amount)
- Assumable by qualified, eligible heirs
- Security: Deed of Trust in first or subordinate lien position
- Maximum loan-to-value is 100%
PHB is an Equal Opportunity Lender and Equal Opportunity Housing Provider
Home Repair Loan Project Process
The following describes the typical flow of a Home Repair Loan project, after the borrower’s application has been approved:
If the applicant is eligible, and funds are available, then PHB will send out a commitment letter for the applicant to sign and return.
The housing loan coordinator requests a report from the title company regarding any liens and/or judgments on the property. The housing loan coordinator reviews the report and confirms loan eligibility.
Home assessment and contractor bids
The PHB construction coordinator will schedule an appointment with the borrower at their home to complete a home assessment. The construction coordinator will discuss with the borrower the critical repair needs and finalize the work to be done.
The construction coordinator will assist the borrower to obtain bids from licensed, bonded and insured contractors who are Lead-Based Paint Renovator certified for the repair work. Then the borrower chooses a contractor and signs a construction agreement between the contractor and the borrower.
Final loan determination
Based upon the scope of work, the construction coordinator establishes the final loan amount.
Funding the loan and completion of repairs
Closing documents signing: The housing loan coordinator schedules an appointment with the borrower to sign the loan closing documents.
Funding the loan: PHB puts the home repair funds into an escrow account. The borrower and contractor then receive a “notice to proceed” letter, and the borrower contacts the contractor to schedule the repair work.
Completion of repairs: Once the contractor finishes the work, the borrower and the PHB construction coordinator must approve the work. The borrower then completes a loan disbursement form and provides it to the construction coordinator so that the contractor can be paid.
Apply for a Home Repair Loan
Documents and Forms
If you have questions about the program or would like to request an application, please contact:
Housing Loan Coordinator
See the list of PHB Housing Construction Coordinators for more contacts.