PDC Refinance and Renovation Loans
posted in Money Matters |
A few days ago I wrote a post about the Portland Development Commission’s low-interest loans for necessary repairs and home improvements to your home. Well, did you know that they also have a home loan program for where you can refinance your home at a 90% loan-to-value (LTV) ratio, based on the after-improved value of your home? Cool, huh?
Let’s say your home, as it stands now, is worth $250,000. You then add to that number to the estimated cost of renovations, let’s say $50,000, giving you a total of $300,000. A 90% LTV means that you borrow a total of $270,000 to complete your repairs. And unlike their home improvement loan for necessary repairs, the loans are not confined to specific neighborhoods, they apply to any area in Portland city limits, and there are no income limits for qualifying. In addition, the rates are based on current market rates (a 1.75% loan fee applies, but can be financed with the loan).
However, there are some guidelines that must be met (aren’t there always?):
- It must be an owner-occupied home.
- You must meet underwriting criteria (you must qualify).
- The maximum loan amount for a single family home is $417,000 (more for duplexes and multi-plexes).
- If LTV is above 80%, then private mortgage insurance (PMI) is required.
- You have 6 months after signing the loan documents to complete the work.
- At least 2 bids must be obtained for the proposed work.
- Your current mortgage (if any) must be paid off - you are refinancing the entire amount through PDC.
- Any renovation funds are kept in an escrow account and dispursed as the work is completed.
Here is a PDC brochure with a more in-depth explanation of the program, or you can go check out PDC’s website.
