Housing Services:
Ownership Through Partnership Down Payment Assistance Loan (DPAL)

Features/Benefits

The Ownership Through Partnership (OTP) is a public-private partnership with the Portland Development Commission (PDC) to help more low and moderate income households buy their first home in one of Portland’s Urban Renewal Areas. The Down Payment Assistance Loan (DPAL) is funded by PDC and must be used for down payment assistance and/or closing and to establish a Home Improvement Fund. DPAL helps homebuyers:

• Avoid the cost of mortgage insurance!
• Increase their purchasing power or enjoy lower monthly house payments!
• Establish a Home Improvement Fund for after purchase repairs and improvements!

Eligible borrowers access this program through a PDC approved Participating Lender. DPAL is a deferred payment silent second mortgage. Eligible properties include single-family owner occupied residences, including condos and town homes located in a PDC Urban Renewal Area (subject to available funding).

Target Market

Low and moderate income fi rst-time homebuyers who need gap fi nancing to purchase a home of their own. DPAL is ideal for households with fixed incomes or those with limited income growth potential.

Eligibility Requirements

Eligible First Mortgage Lender

• First mortgage loan must be originated by a PDC-approved Participating Lender.
• First mortgage products may be the Oregon Bond loan or other fixed rate loan programs and fee structures approved by PDC.
• Participating Lenders must sign a Participating Lender Agreement with PDC and complete required training prior to originating an OTP loan.

Eligible Homebuyer

• Must be a first-time homebuyer, defi ned as not having owned a home within the past three years.
• Total gross household income cannot exceed 80% or 100% of current HUD Median Family Income (MFI) as adjusted for family size and the number of bedrooms in the home as follows:




Household Size	Two or less Bedrooms 80% MFI (2007)*	Three or more Bedrooms 100% MFI (2007)*
1	$38,000	$46,850
2	$43,450	$53,500
3	$48,900	$60,200
4	$54,300	$66,900

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

• Owner must occupy home as their primary principal residence for the entire term of the OTP loan.
• Must be a US citizen or legal resident.
• Must obtain a fi rst mortgage from PDC or a PDC-approved Participating Lender.
• Must meet PDC’s and the Participating Lender’s minimum credit and underwriting standards.
• Homebuyer’s combined liquid assets (cash and equivalent, stocks, bonds and bank deposit; excludes retirement accounts) after closing cannot exceed six months of PITIMI payments .
• Borrower must complete a homebuyer education workshop provided by a US Department of
• Housing and Urban Development (HUD) Certifi ed Home Buyer Counseling Program.

Eligible Property

• Residential property located within a PDC Urban Renewal Area subject to available funding. For a map of PDC’s Urban Renewal Areas, go here.
• Single-family one 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 4.11% (assumes a loan amount of $50,000).
• 30 year loan term forgiven after the loan term expires.
• Maximum loan amount up to twenty five percent (25%) of the purchase price with a maximum of 20% of the purchase price to be used for down payment assistance and/or closing costs and a minimum of 20% of the DP AL must be used to establish a Home Improvement Fund.
• No monthly payments as DPAL is deferred until sale, refi nance, or no longer owner-occupied.
• Forgiven once the term expires provided the borrower has maintained the property as owner occupied for the life of the loan.
• Maximum 105% Combined Loan-To-Value based upon the lesser of the purchase price or the “as is” appraised value.
• May be assumed by a qualifi ed homebuyer who meets current qualifi cation criteria.
• Subordination is permitted for future refi nancing and equity loans so long as the outstanding balance, plus all accrued and unpaid interest on PDC’s loan does not exceed 100 percent loan to value.
• The PDC charges a 1% loan origination fee and a $350 construction management fee. Other necessary third party fees also apply.

Home Improvement Fund

A minimum of 20 percent of the DPAL must be deposited into a PDC-controlled Home improvement Fund. All Home Improvement Funds must be used within 24 months of loan closing.

For more information call Jon Gail or Javier Mena at 503-823-3200.

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