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SDC Exemption for Home Ownership

Information
The SDC Exemption Program has different requirements dependent on whether the exempted unit will be sold to home buyers or rented. This page covers information for builders who intend to sell the exempted unit.
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Administrative Rules


System Development Charges

Read about SDCs and current rates for new development, additions, and changes of use.


Program Requirements

Eligible Developments

To be eligible for the SDC Exemption Program, the applicant must have site control and the proposed development must meet the following affordability requirements (per Title 30.01 – Affordable Housing Preservation, Chapter 30.01.095):

  • Homebuyer income limit: 100% MFI
    Developments must serve households at or below 100% of the Median Family Income (MFI) for a family of four (currently $106,500 and adjusted annually; adjusted upward for households of more than four people)

Income Limits (MFI chart)

  • Sale price cap: $455,000
    Units must sell for less than the price cap provided by City Code, Section 3.102.090 D.
     
  • Sales must be arm's length transactions. An arm’s length transaction is one in which the buyer and seller act independently and have no relationship (by blood, marriage or unrelated business dealings) to each other. An arm’s length transaction will be fair and equitable to all parties and will result in a fair market price.
     
  • Occupancy: Units must sell to homebuyers who will occupy the homes as the initial occupants. Properties receiving homeownership exemptions may not be rented.

Compliance Requirements

The Portland Housing Bureau (PHB) requires the applicant to comply with the terms and conditions outlined in their recorded Regulatory Agreement (view sample). The compliance requirements are as follows:

In order to prove the property is being sold to an income eligible homebuyer who will occupy the property, PHB must receive a Homebuyer Compliance Verification Form along with supporting documentation (see page two of the form) prior to the sale of the property. Income is evaluated based on a homebuyer’s current annualized income. In the event that the property is being sold to an ineligible homebuyer or over the sale price cap, the developer must repay the exempted SDCs plus interest and fees to the city of Portland SDC Bureaus.

Process Steps for Home Ownership Project Compliance Requirements:

  1. Homebuyer completes and signs the Homebuyer Compliance Verification Form and submits it along with supporting income documentation to PHB for review prior to the sale of the property. Generally the escrow officer handling the closing will help facilitate this step.

  2. Escrow officer completes and faxes or emails PHB a completed Homebuyer Compliance Verification Form and supporting documentation to request a demand statement prior to closing. If it is known that the homebuyer will not meet the requirements, the escrow officer submits an SDC Demand Statement Request Form.

  3. PHB reviews the forms and supporting documents within 10 business days and then emails a demand statement to escrow disclosing whether or not the homebuyer meets the affordability requirements and indicating if any repayments are due.* PHB demand statements are valid for 90 days.

  4. Escrow officer collects and pays the applicable amounts of any repayments due.

  5. Once PHB receives proof that the SDC Bureaus have been repaid and/or the property has sold to the verified homebuyer for the current price cap or less, PHB records a Release Agreement and the SDC Exemption Program requirements are released.

*Please note: The amount exempted in the Regulatory Agreement is an estimate only; do not use this figure to calculate repayments. Only a Demand Statement from PHB will list the correct repayment amounts. Any repayments due in the case of non-compliance will be charged a $250 processing fee by PHB and by each bureau requiring repayments. Repayments will be due based on the rate that was in effect at the time the complete building permit application was submitted, plus interest (currently 5.2%, based on the city’s interim rate effective as of July 1, 2014).


Eligible Properties

The SDC Eligible Properties section is currently being updated. Please check back later or visit one of these related pages.


SDC Exemption Forms and Documents

Home Ownership Projects

*Projects subject to Inclusionary Housing use a different form. Please click here for IH Forms.


Meet with a SDC and HOLTE Homeownership Program specialist

Dropping off a form in person? No appointment needed. Simply drop off in the grey mail bin in the building lobby on the first floor. If you have questions, please send us an email.

Meet virtually or through a phone appointment
To schedule, contact us by email or phone.
indirect@portlandoregon.gov

In-person appointments for this program available on Tuesdays only.
PHB is operating in hybrid. Staff are only in the building on certain days of the week.

Get directions to PHB (1900 SW 4th Ave, 7th floor)

Book now: In-person appointment (Tuesdays only)

Contact

SDC Exemption Program for Home Ownership

Program Staff
phone number503-823-3270Please note, this is for Home Ownership only. For questions about SDC exemptions for Rentals, visit the Inclusionary Housing page for the appropriate contact.
fax number503-865-3479