Long time readers of the blog may recall a series of 2014 posts about changes in the Oregon Bond and Portland MCC program that could be made to increase the reach of those programs. (See link HERE for a listing of those posts).
HUD last week published revised median family incomes and IRS recently published purchase price limits data (HERE) that are used to establish sales price and income limits for qualified mortgage bonds and MCC programs.
Purchase Price Limits
OHCS has acted quickly to change the purchase price limits with a publication HERE effective March 31st.
Possible Income Limit Changes
The formulas to determine maximum income limits are far more complex, and the state also has the discretion to NOT change the maximum income limits. However, after running updated data through the spreadsheet I constructed in 2014, IF my calculations are correct, it appears to me that SF Oregon Housing Bond income limits, and purchasing power, could be substantially increased for many Oregon areas.
For the Portland metro area, in non targeted areas, I project that the income limits, and purchasing power, could be increased as follows.
3 Persons or More
New Possible Limit $104,534.
Current Limit $96,954
Possible Income Increase: $7,580/7.8%
If 30% of that additional income ($189.50 monthly) was used for mortgage payments @ 3.25% interest , I calculate that a borrower at the new possible income ceiling could afford to borrow $43,543 MORE than a borrower at the current limit.
New Possible Limit $89,640
Current Limit $84,308
Possible Income Increase $5,332/6.3%
If 30% of that additional income ($133.30 monthly) was used for mortgage payments @ 3.25% interest, I calculate that a borrower at the new possible income ceiling could afford to borrow $30,629 MORE than a borrower at the current limit.
[ At least for Portland metro, using 30% underwriting ratio and 3.25% interest, it appears that every dollar of max income increase produces a $5.74 increase in max purchasing power].
Given the substantial unused 2017 private activity bond cap in Oregon [currently $148 million, along with substantial carry over for prior years], and the past history of generating revenue from the SF bond program, I anticipate that Oregon Housing and Community Services will act to upward adjust the current income limits.
- The City of Portland could increase their income limits for the Mortgage Credit Certificate program to match the Oregon Bond Program. Those Portland MCC income limits are substantially below the current Oregon Bond Program so a change to the new maximum may result in a even higher boost in purchasing power. (MCC 's however cannot be combined with low rate of the Oregon Bond Program).
- Other counties could also see increases in purchasing power.
Originally created and posted on the Oregon Housing Blog