The Portland Housing Bureau (PHB) Home Purchase Assistance Program (HPAP) allows approved mortgage lenders the ability to offer home buyers financial assistance that can be used for down payment, closing costs, and prepaid mortgage insurance in exchange for charging an increased interest rate on their 30-year mortgage.
For example, compared to a 4% rate on a standard conventional loan, if a homebuyer were willing to accept a 5% on a conventional loan, they could receive $17,460 in assistance on a $300,000 purchase. The increase in interest rate would equate to an increase of about $173/mo in the principal and interest portion of their payment. The actual difference in the total monthly payment will depend on the borrower’s credit scores, loan type, and mortgage insurance amount. Homebuyers who are under 80% AMI will receive an additional .5%, and those under 50% AMI an additional 2% cash assistance without further raising in the interest rate.