First Rehab and New Construction HUD Nehemiah Homes in Portland: Buyers Would Have Had Value Increase of $153K-$237K in 21 Years From Less than $3 K Down Payment.

In my post yesterday I published a list of 153 FHA insured new construction and rehab homes for first time home buyers in Northeast Portland that each also received $15,000 HUD Nehemiah Opportunity Housing grants from 1992-1996.  I said I would provide an example of the change in values of those homes from then until 2013. 

The first home was a rehab which sold for $65,000 in July of 1992. According to Portland Maps HERE the 2013 market value was $286,620, or 4.4 times the 1992 sales price.

According to news accounts at the time, the third Nehemiah home that closed was the first new construction home. According to Portland Maps HERE the 2013 market value for this home was $209,730, or 2.91 times the August 1992 sales price of $72,000.  

(Note that the use of assessor office 2013 Real Market values for comparison to actual 1992 sales prices understates actual current sales prices, especially with recent price increases).

For some perspective, the FHFA Home Purchase only non seasonally adjusted price index change for the entire Portland metro area from 3rd quarter 1992 to 3rd quarter 2013 was 2.73, less than the change in sales price for these two Nehemiah grant homes in NE Portland. 

With just a 5% down payment ($2,500 on a $50 k net sales price) the initial buyers of these homes could have realized a net increase from their purchase price of $153k (New Construction) to $237k (Rehab) in just 21 years. 

Note that these properties also:

• Had FHA insured mortgages, 
• Had lower property taxes during their first 10 years,
• Had lower interest rates because of the use of the Oregon bond program, 
• Benefited from City of Portland contributed operating support and fee waivers provided to NECDC, and
• Benefited from Multnomah county donation of a number of foreclosed properties to NECDC.
• Benefited from new down payment assistance and 10 year tax abatement programs for new construction.

Bottom Line: 

• If you were fortunate enough to buy a Portland Nehemiah Opportunity Grant Program home in NE Portland, the return on investment was substantial. 
• Nehemiah homes were heavily subsidized at all levels of government. 
• New housing construction in areas of the city where new construction was then rare helped act as a catalyst for later development. 
• Nehemiah helped created systems change with new programs like down payment assistance and new construction 10 year property tax abatement. 

Originally created and posted on the Oregon Housing Blog.