20 Year Anniversary of First Oregon Down Payment Assistance Agreement.

In looking through some boxes of old materials I recently discovered a October 16, 1990 draft of the first Oregon down payment assistance agreement/MOU between US Bank, the Neighborhood Partnership Fund, and HUD/FHA.   

The draft is HERE, and a related Oregonian story HERE. 

Some additional background helps illustrate how much has changed in 20 years:

• Dominion Capital went into bankruptcy on a large number of homes in NE Portland; The City of Portland subsequently created Portland Community Reinvestment Corporation to acquire these assets.(Related Dominion Capital Oregonian story HERE).
• A series of Oregonian stories (Blueprint for a Slum) had detailed the lack of major bank lending in NE Portland. (Related Oregonian story HERE).
• Congressman Les AuCoin helped the City of Portland get a 1989 Nehemiah grant from HUD to build or rehabilitate 250 homes in N and NE neighborhoods. Sam Galbreth was PDC Housing Director at the time.
• I was the Division Director /Chief Underwriter for HUD/FHA Housing in Oregon and the Oregon HUD Director was Dick Brinck; Don Neureuther was the head of NPF; and Karen Tolvstad was the local US Bank CRA official.
• Finding comparable loan sales to justify $55-$60,000 sales prices for Nehemiah homes was VERY difficult; vacant lots in NE Portland were selling for less than $5,000.
• The agreement called for US Bank to initially commit to $30,000 for down payment assistance for mortgages below $50,000, with the amount of assistance per loan limited to 1% of the sales price; recipients of down payment assistance were required to complete home ownership training. 
• The agreement also observed that US Bank had changed their loan officer compensation to facilitate making loans below $50,000.
• The Census Bureau median value of all homes in the City of Portland in 1990 was $58,600, while median values in Northeast census tracts 34.01 and 34.02 were $37,100 and $33,200.
• HUD agreed to add up to $3,500 to the maximum FHA mortgage amount, without an appraisal, for energy efficiency improvements. (That would translate into 7% for a $50,000 mortgage and an even higher % for a mortgage less than $50,000).
• Other banks, including Security Pacific, later agreed to similar down payment assistance programs. 

IF anyone has additional perspective to add on this topic, PLEASE do so as a comment to this post. 

Note: Oregonian story links above are result of Multnomah County Library on line database search, available to anyone with a library card. Go hug your local librarian. 

Originally created and posted on the Oregon Housing Blog.