Sunday, January 23, 2011

Oregon Hardest Hit Mtg. Payment Program: Can Make 12 Monthly Payments on $1.25 Billion of Mortgage Debt AND $10 Million in Property Tax/Insurance Payments.

I thought it might be useful to put in perspective how much mortgage debt that the $100 million in Oregon Mortgage Payment Assistance will support over the next 12 months.  The results I calculated are shown in the table HERE.

Results/Methodology:
Per Family Calculation
Using the $20,000 per family limit and a set aside of 10% of the funding per family to pay for property taxes and insurance would leave $18,000 annually /$1,500  per month available to pay debt service. Using a 6% assumed interest rate this level of funding can make 12 full debt service payments on a mortgage of $250,187 AND also cover $2,000 in property tax and insurance payments.

Total Program Calculation
Multiplying the $250,187 per family mortgage/debt service support for the 5,000 expected families results in the calculation that the program would be able to make 12 months of full debt service payments on mortgages that total $1,250,937,108.

Program funds would also be sufficient to ALSO make $10 million in property tax and insurance payments. 

(Changing the assumed interest rate or the assumed % reserved for property tax or insurance would change the total mortgage debt serviced amount; changing the $20,000 amount per family would NOT, but it would change the number of families served.).  

Final note: For more perspective, the $1.25+ billion in mortgage debt supported by the Oregon Hardest Hit Mortgage Payment Assistance Program is 76% of the $1.65+ billion FHA refinance loan volume in Oregon during all of CY 2010.

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