Portland, Oregon Home Renovation Loan Options

Article thumbnail

Updated 05/2024

Portland’s Home Repair Loan Program

Portland’s Home Repair Loan Program (HRLP) offers an unbelievable 0% interest rate on loans up to $40,000 for Portland residents with moderate incomes who want to make home updates. The program’s purpose is to increase the safety and livability of homes by improving or replacing electrical wiring, leaks, inadequate heating systems, structural disrepair, and more. It can also help homeowners who have received a code violation.

The loan is only applicable for repairs that are critical to the health and safety of occupants. The home must also be within the Interstate Corridor and Lents Town Center Urban Renewal Areas.


Read about the HLRP, including eligibility requirements, loan process, how to apply, and more. Or contact Bev Keagbin, Housing Loan Coordinator, at 503.823.3336 or Bev.Keagbine@portlandoregon.gov.

Learn more about HLRP here.

FHA 203(k) Home Renovation Purchase Loans

Requirements for approval aren’t directly rated to income, but the borrower must have:

Learn more about the FHA 203(k) renovation loan program.

Fannie Mae HomeStyle® Renovation Loan

Like the FHA 203(k), the Fannie Mae HomeStyle® Renovation Loan (FMHRL) lets you borrow the purchase price and the added costs for renovation in one loan amount.

Here’s how it works. An approved contractor submits plans to the bank. Money is then dispersed to pay for the home at closing, but the contractor is only paid after the work and when inspections are completed by the bank. Therefore, this loan option streamlines the process for the borrower while helping prevent fraud.

HomeStyle Renovation offers borrowers competitive rates, which may be lower than other renovation financing options, such as FHA’s 203K program, HELOC, or costly credit cards.


Learn more about the Fannie Mae HomeStyle® Renovation Program here.

USDA Renovation Loans

There are two types of USDA loans for renovations:

Home Equity Loan and Home Equity Line of Credit

What’s the maximum loan amount on a HEL or a HELCO? This will all depend on the value of your home and how much you still owe on your first mortgage. Another factor is the percentage of the home’s value you can borrow against, determined by the lender. For instance, imagine that your lender will let you borrow up to 80% of the value of your home. It’s currently worth $600,000, and you still owe $250,000 on your first mortgage. That means you may qualify to borrow an additional $230,000 in the form of a HEL or HELOC ($600,000 x 0.80 = $480,000 – $250,000 = $230,000).

Cash-Out Refinance Loan

Like the HEL and HELOC, a cash-out refinance (COR) allows you to draw money based on the value of your home, but here’s how it’s different. With a COR, you take out an entirely new mortgage on your home that’s more than the current remaining balance. That is, your lender will look at your mortgage balance, take into account the equity you’ve gained by making payments, and then grant you a loan higher than the balance of your current loan based on your earned equity. This new loan will pay off (replace) the current mortgage and give you some extra cash for renovations. So, in the end, you still only have one mortgage payment.

Going this route allows you to bypass less desirable options, like personal loans and credit cards, and not wind up with two payments attached to your home.

Need Help Finding a Lender or a Home?

We’re certain our top 1% Portland buyer’s team and our top 1% Portland seller’s team can help you, no matter your position on the buy/sell spectrum. Portland is full of charming fixers, as well as lovely homes that simply need updating—one of which may be the one you own right now. Whatever your needs, we can help you get the result you want. Get in touch today via the chat bot on our site or give us a call at 503-714-1111. We’d love to hear about your real estate plans!

Let's Connect
Contact us.

What My Clients Are Saying

When my wife and I decided to sell our home we started to search for agents who work for less than the 6% standard commission. Slightly skeptical, I decided to call Stephen for a consultation. Stephen came very prepared with comp sales, marketing techniques, and several other items pertaining to the sale I never would have considered. We sold in six days.