NCRA Owner-Occupied Housing Rehabilitation Loan Program

I. Basic Criteria for the Owner-Occupied Housing Rehabilitation Loan

To participate in the Owner-Occupied Housing Rehabilitation Program, a property owner must submit an application and meet each of the following basic criteria:

  1. The applicant must be a US citizen, a US non-citizen national or a qualified alien.
  2. The property must be located in the NCRA.
  3. The property taxes must be current; however, deferred taxes are acceptable.
  4. The applicant must own or be buying property and must be in title. The preliminary title report must be satisfactory to the County.
  5. The applicant must live in the property at the time of application.
  6. The applicant must have sufficient equity to cover the loan and all existing encumbrances.
  7. The applicant must have good credit.
  8. The household's total annual gross income projected for the next 12 months must be within the limitations set by the Clackamas County Development Agency as defined by the US Department of Housing and Urban Development (HUD).
  9. The applicant's income must be sufficient to cover payment(s) on the existing debt on the property and other financial obligations.
  10. The residence must be suitable for rehabilitation and the proposed rehabilitation must be economically feasible.

II. Income Limits

CCDA Loans: The household's total annual gross income must be at or below 120 percent of the current area median family income (MFI) as determined by HUD. Applicants above 120 percent of MFI may be eligible for a rehabilitation loan match.

III. Deferred Payment Loans (DPL) Terms and Conditions

  1. The Owner-Occupied Housing Rehabilitation Program provides deferred payment loans to low-income homeowners for needed and critical repairs. The program offers:
    1. Single Purpose loans (includes Handicap Accessibility Loans);
    2. Exterior Repair loans;
    3. Complete Repair loans; and
    4. Condominium Interior Single Purpose loans. Repairs are limited to items for which the condominium owner is responsible. Each applicant must provide a copy of the Homeowners Association's bylaws or covenants and restrictions in order for the County to make a determination. This type of loan is only available from the Development Agency as a single purpose loan for critical repairs.
  2. Interest Rate. The Housing Rehabilitation Program sets interest rates that reflect market conditions and community needs. The program charges simple interest on the outstanding principal of the loan. For Development Agency loans in the NCRA, the current interest rates are:
    1. For income at less than 80% of MFI – zero percent (0%) per annum.
    2. For income between 80% and 120% of MFI – three percent (3%) per annum.
    3. For incomes over 120% of MFI – three percent (3%) per annum, with a requirement that the applicant provide 50% of the project costs in matching funds.
  3. Payments. Loans are deferred. There are no monthly payments on a deferred payment loan.
  4. Term of Loan. The Loan shall become due and payable immediately:

    Upon any actual or attempted sale or transfer of title, voluntary or involuntary, including by operation of law, or upon the death of the original applicant. If there is joint ownership of the property, the term of the loan may be extended until the sale or transfer of the property or the death of the survivor if the survivor had:

    1. An ownership interest in the property at the date of the loan, and
    2. Occupied the property at the date of the loan.

    If the borrower ceases to or fails to physically reside in the property, changes its use or refinances the debt on the property.

    NOTE: Development Agency owner-occupied housing rehabilitation loans within the NCRA will be forgiven if the applicant occupies the dwelling as a primary residence for a minimum of 10 continuous years from receipt of the rehabilitation loan.

  5. In the event that the loan becomes payable because of the sale, transfer, refinance or change in use or occupancy of the property, except as noted in paragraph D.1.above, the loan shall bear an interest rate of 10 percent (10%) per annum from the date of such sale, rent, lease or change in occupancy.
  6. Optional Payments of Principal.

    A borrower may prepay at any time all or part of the principal amount due on the loan without payment of penalties or premiums, provided that the borrower is not in default under the loan, and the payment is identified as prepayment of principal.

    Any prepayment shall be applied first to accrued interest, if any, and then to principal. In the case of a partial payment of principal on an interest-bearing loan, subsequent interest payments shall be computed on the remaining outstanding principal balance.

    If a partial prepayment of principal is made, only the balance remaining after 10 years may be forgiven.
  7. Loan Amounts for Single Purpose, Exterior Repair or Complete Repair.
    1. Maximum loan amount. The maximum loan amount may not exceed the lowest of:
      1. The actual cost of rehabilitation; or
      2. The applicant's equity in the property, as determined by subtracting all existing indebtedness from 90% of the present value of the property; or
        Exception: Equity requirements do not apply for Single Purpose loans for a health or safety item.
      3. c)  The amount available for the type of loan which is:
        1. $15,000 for a Single Purpose loan (includes handicap accessibility and condominium interior loans);
        2. $25,000 for an Exterior Repair loan;
        3. $35,000 for a Complete Repair loan;
    2. 2. Minimum Loan Amount.
      1. For CCDA loans the minimum request is $2,000 and the property must be suitable for rehabilitation.
      2. Note: An eligible applicant may use a Home Access Grant in conjunction with a loan.

IV. Eligible Owner-Occupied Dwellings

  1. A. The following dwelling types are eligible:
    1. Single-Family Dwellings.
    2. Two or Three-Family Dwellings if one of the units is owner-occupied.
    3. A manufactured dwelling unit may be eligible if the owner-occupant owns both the unit and the real property on which the unit is located. Manufactured dwelling units in parks or on rented land are not eligible because the loan cannot be secured with a lien on the real property.
    4. A condominium unit. A condominium unit is eligible for a Single Purpose loan for critical interior repairs only.
  2. All other dwelling types are ineligible.

V. Eligible Work Items

  1. For owner-occupied home rehabilitation loans, eligible home repairs and upgrades may include;
    1. Repairs and upgrades to exteriors of a structure including: • Roof/Gutters
      • Walls/Facades
      • Paint
      • Windows/Doors
      • Dry Rot Repairs
      • Foundation Repairs
      • Weatherization
      • Handicap Accessibility
    2. Interior repairs to eliminate code violations or to correct defective conditions that endanger the health, safety or welfare of the occupants, such as:
      1. Faulty Wiring/Electrical Circuitry
      2. Faulty Plumbing
      3. Inoperable Heating, Ventilation or Air Conditioning Systems • Failing Interior Structural Systems

Note: This is not a complete list. Other types of work may be eligible.

2024 Home Rehab Loan Annual Income Limits

Household size0% Loan3% Loan
1 person$66,100$99,100
2 persons$75,550$113,300
3 persons$85,000$127,450
4 persons$94,400$141,600
5 persons$102,000$152,950
6 persons$109,550$164,250

** Those over the 3% loan income limits may be eligible for a loan requiring matching funds.


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