Portland Real Estate Appraisal Brief – Saturday, December 13, 2025: FHA 2026 Loan Limits Rise to $701,500 in Portland Metro

FHA 2026 one-unit limit in Portland metro rises modestly to $701,500, opening 3.5% down-payment financing to ~48 additional Q3 2025 detached sales.

Aerial view of a tree-lined single-family residential neighborhood in Portland, Oregon – representative of homes now eligible for 2026 FHA loan limits up to $806,500
Single-family neighborhood in Portland, Oregon–representative of homes affected by 2026 FHA loan limit of $701,500
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HUD Announces 2026 FHA Loan Limits

The Federal Housing Administration has released its 2026 loan limits. In the Portland–Vancouver–Hillsboro MSA (38900)—covering Clackamas, Columbia, Multnomah, Washington, and Yamhill counties in Oregon, plus Clark and Skamania in Washington—the new one-unit limit increases from $695,750 in 2025 to $701,500 in 2026, a rise of $5,750 (0.83%).

Hood River County is not part of this MSA and retains its 2025 limit of $762,450 (unchanged for 2026). No detached SFR sales in Hood River County reported FHA financing in Q3 2025.

Appraisal & Lending Implications

In addition to developing an opinion of value, appraisers on FHA assignments focus primarily on identifying property deficiencies or conditions that could render a home ineligible for financing—lenders handle the loan-to-value calculations against the limit using the appraised value alongside borrower qualifications.

The modest increase means approximately 48 additional detached homes that closed in Q3 2025 now fall within FHA-insured financing eligibility. Lenders handling FHA assignments with case numbers assigned on or after January 1, 2026, will apply the new $701,500 ceiling across the core Portland metro counties.

Q3 2025 Context – Detached Single-Family Residences

RMLS data for Q3 2025 detached SFR closings in the region illustrate the practical effect:

Q3 2025 Portland metro detached SFR sales by price band showing 48 homes now eligible under the 2026 FHA loan limit of $701,500
  • 48 detached homes closed between $695,751 and $701,500—previously above the 2025 limit.
  • Only 2 of these 48 reported FHA financing (likely large down-payment exceptions). Now, all 48 would be eligible under the 2026 limit.
  • Above $701,500, FHA usage drops to 0.71% (11 of 1,548 sales).
026 FHA loan limits by county in the Portland region – Portland metro MSA at $701,500, Hood River County at $762,450
2026 FHA one-unit loan limits by county. The Portland–Vancouver–Hillsboro MSA (yellow) rises to $701,500; Hood River County (purple) remains $762,450.
Source: HUD

2026 FHA one-unit loan limits by county. The Portland–Vancouver–Hillsboro MSA (yellow) rises to $701,500; Hood River County (purple) remains $762,450.

For broader Q3 2025 market trends, see the most recent quarterly update.

Sources & Further Reading

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Are you an agent in Portland and wonder why appraisers always do “x”?

A homeowner with questions about appraiser methodology?

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And if you’re in need of appraisal services in Portland or anywhere in the Portland Region, we’d be glad to assist.

Portland Real Estate Appraisal Brief – Friday, December 12, 2025: $20.7M RSO Reallocation, Rent Hikes Reversed, HUD Policy Pause

Portland’s Home Forward reverses rent hikes at subsidized properties amid 14% vacancies, $20.7M RSO reallocation, and HUD’s CoC pause—appraisal risks for multifamily in the Portland–Vancouver region.

The paradox of empty apartments amidst a backlog of applications
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The Affordable Housing Paradox: Local Action and Federal Uncertainty

The dynamics of affordable housing in the Portland metro area are currently defined by a convergence of major local policy responses and intense federal uncertainty. The situation presents a complex risk profile for homeowners, investors, lenders, and appraisers focused on the multifamily sector across the region.

Locally, the Portland Housing Authority, Home Forward, recently reversed planned rent increases at two properties, The Yards at Union Station and Pearl Court Apartments, after tenant outcry. The decision was made following reporting that the region has at least 1,863 income-restricted apartments sitting empty while waitlists remain years long—an affordable-housing paradox our brief from Sunday, December 7th examined. Home Forward’s vacancy rate is approximately 14% across its portfolio, significantly above the general market rate. The rent increases, which were as high as 10% for tenants using government rent subsidies, were originally deemed necessary due to a combination of rising operating costs and delayed federal voucher renewals and payment shortfalls. This immediate reversal highlights the degree to which local administrative and political pressures are mitigating instability that often originates from federal payment issues.

Local Fiscal Correction and Spending Priorities

Adding to the local action is the controversy over approximately $20.7 million in unspent funds from the Rental Services Office (RSO), as uncovered in last month’s reporting on landlord relocation fees. This surplus prompted concern after former Housing Director Shannon Singleton told city council she was instructed not to disclose the accumulated balance. The discovery has pushed the City Council to act quickly, especially as Home Forward is currently facing an estimated $35 million budget gap next year due to insufficient federal funding.

The Council introduced a resolution to allocate the approximately $20.7 million. The intent is to “slow the inflow into homelessness” by prioritizing upstream renter stabilization and prevention programs. Key components of the Council’s directed priorities include:

  • $9 million designated for Home Forward to stabilize households affected by ongoing federal funding cuts and help close the agency’s widening budget gap.
  • $4 million over three fiscal years for new, flexible, short-term rent assistance aimed at tenants facing imminent eviction.
  • A minimum of $2 million of RSO revenue set aside for capitalizing a Revolving Loan Fund, which would be used for the future acquisition of market-rate housing or land banking for the development of social housing.

The allocation of these funds underscores a local commitment to mitigating housing instability in the face of dwindling or volatile federal support.

Federal Policy Shifts and HUD Overhaul Pause

The urgency behind the local fund allocation is intensified by volatility at the federal level, which affects the entire Portland–Vancouver region. Nationally, housing authorities and property owners have been dealing with operational disruptions, including delayed Housing Choice Voucher (Section 8) payments to landlords due to a recent federal government shutdown. Furthermore, Home Forward was forced to halt the issuance of new vouchers in August due to the looming $35 million budget gap driven by insufficient HUD funding.

On December 8th, the Department of Housing and Urban Development (HUD) temporarily withdrew its highly controversial Continuum of Care (CoC) Notice of Funding Opportunity (NOFO). This withdrawal occurred just hours before a court hearing related to multiple lawsuits, including one in which both Oregon and Washington were key plaintiffs, as detailed in our December 2nd brief on the HUD lawsuit. The NOFO was widely criticized for proposing a significant shift in federal policy by drastically limiting the amount of CoC funds—the largest federal grant source for homelessness prevention—that could be used for Permanent Supportive Housing (PSH). Oregon Housing and Community Services (OHCS) and other local providers had warned that this policy change would create a conflict with state policies requiring services to be voluntary, threatening to disrupt or displace existing programs. The temporary pause on the overhaul grants local housing authorities and service providers a crucial—though potentially brief—reprieve as HUD reviews its funding strategy.

Appraisal Implications

The confluence of extreme local policy action, high subsidized vacancy rates, and unstable federal funding introduces unique valuation and market risks for properties, particularly in the multifamily segment across Clackamas, Multnomah, Washington, and Clark counties.

Income-Restricted and Section 8 Properties

The financial state of Home Forward, marked by a 14% vacancy rate and a $35 million budget gap, injects severe income-approach risk for appraisers. Restricted rents that appeared stable only weeks ago have proven volatile, and operating expenses continue rising faster than allowed rent adjustments. Appraisers valuing LIHTC, project-based Section 8, or other regulated affordable properties must account for elevated policy risk.

  • Vacancy Analysis: The high vacancy is driven by both administrative issues and market factors. Specifically, many 60% AMI units are no longer competitive as market-rate rents have dropped, causing demand to lag in this specific income tier while the deepest need remains in the 0-30% AMI range. Appraisers must carefully analyze these tiers, alongside physical risks, to determine the actual loss-to-lease and economic vacancy.

Market-Rate Multifamily Rentals

The $20.7 million reallocation and potential influx of new renter stabilization resources may modestly ease pressure on market-rate rents in lower-price segments, though the effect will likely be concentrated in central Portland submarkets.

Sources & Further Reading

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CODA

Are you an agent in Portland and wonder why appraisers always do “x”?

A homeowner with questions about appraiser methodology?

If so, feel free to reach out—I enjoy connecting with market participants across Portland and the surrounding counties, and am always happy to help where I can.

And if you’re in need of appraisal services in Portland or anywhere in the Portland Region, we’d be glad to assist.

Portland Real Estate Appraisal Brief – Thursday, December 11, 2025: Portland’s Temporary SDC Exemption for New Housing Units (2025–2028)

Portland’s temporary SDC exemption program (2025–2028) waives over $20,000 in average per-unit fees on most new residential units, targeting 5,000 additional homes amid supply constraints in the metro area.

Photo of a home in the early stages of construction with initial framing underway.
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Portland’s Temporary Housing SDC Exemption Program

The City of Portland’s temporary System Development Charge (SDC) exemption program, effective for building permits issued from August 15, 2025, through September 30, 2028, exempts most new residential dwelling units and congregate living facilities from SDCs. These one-time fees fund infrastructure expansions for sewer, water, parks, and transportation to accommodate growth.

The program targets the production of approximately 5,000 new housing units by reducing upfront development costs often cited as barriers by builders. Eligible projects encompass new construction, additions creating units, and conversions of non-residential space to housing. Accessory dwelling units, caretaker quarters, and transient lodging remain ineligible, following separate programs.

No separate application is needed—developers acknowledge terms during the permitting process. To retain the exemption, projects must meet milestones, such as an approved foundation inspection within 12 months of permit issuance, unless supported by a financial guarantee.

City projections estimate $63 million in foregone revenue over the three-year period, broken down as $27 million for parks, $22 million for sewer and stormwater, $10 million for transportation, and $4 million for water. Average per-unit SDCs exceed $20,000 (ranging from about $15,000 in multifamily to $35,000 for single-family), representing 3–8% of total project costs in many cases.

Early activity shows interest: As of late September 2025, the Home Builders Association of Greater Portland reported over 950 requests for new construction under the program, with a majority for single-family homes and the largest a 150-unit multifamily project.

While the waiver aims to stimulate market-rate and mixed projects without affordability mandates, it has raised concerns about delayed infrastructure improvements. Waiving transportation SDCs—estimated at $10 million—has prompted concerns over delayed active transportation and transit improvements, particularly as regional providers like TriMet face service reductions amid funding shortfalls. As economist Thomas Sowell observed, “There are no solutions, only trade-offs”—a reminder that policies like this one involve balancing housing production goals against long-term public infrastructure priorities.

Appraisal Implications

Residential Properties

For appraisers valuing proposed or under-construction single-family and attached homes in Portland, this temporary relief reduces replacement costs in the cost approach, potentially supporting higher land values or improved feasibility in submarkets where margins are tight. Savings may offset other expenses rather than directly translating to lower sale prices.

Lenders, REALTORS, and investors should track permitting trends, as accelerated timelines could increase near-term inventory pipelines.

Multifamily Properties

Scaled savings prove substantial for apartment and mixed-use developments—a $20,000+ per-unit reduction on a 100-unit project exceeds $2 million—bolstering internal rates of return and highest-and-best-use analyses that favor residential redevelopment.

Market Context

New construction comprises a small share of regional sales, heightening the potential impact of fee relief on supply. As detailed in the Portland region’s Q3 2025 market update, new detached single-family sales fell 25% regionally year-over-year, with Multnomah County experiencing a steeper 48% decline amid builder caution over costs and financing.

Bar graph showing the number of new construction sales of single-family detached homes in Multnomah County for Q3 2024 versus Q3 2025. Q3 2024 (green bar) recorded 91 sales, while Q3 2025 (red bar) recorded 47 sales—a 48% year-over-year decline. Data sourced from RMLS via PortlandAppraisalBlog.com.

This program directly targets those barriers, complementing ongoing efforts to address low production levels seen in recent years.

Sources & Further Reading

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Are you an agent in Portland and wonder why appraisers always do “x”?

A homeowner with questions about appraiser methodology?

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And if you’re in need of appraisal services in Portland or anywhere in the Portland Region, we’d be glad to assist.

Portland Real Estate Appraisal Brief – Wednesday, December 10, 2025: TriMet Begins Targeted Evening Bus Service Reductions

TriMet’s November 30, 2025, evening bus frequency reductions prompt early rider concerns, meriting monitoring for subtle effects on multifamily demand in the Portland metro.

TriMet FX2–Division bus at OMSI SE Water station in Portland, representing one of the lines affected by evening service reductions impacting residential and multifamily property accessibility.
TriMet FX2–Division bus at the OMSI SE Water station in Southeast Portland.
Photo: Truflip99 via Wikimedia Commons (CC BY 4.0)

TriMet’s Initial Service Adjustments Take Effect

On November 30, 2025, TriMet implemented the first phase of service reductions, focusing on reduced frequency during low-ridership evening hours on five bus lines. These changes include:

  • Line FX2–Division: Every 24–35 minutes after 7 p.m. daily.
  • Line 35–Macadam/Greeley: Hourly after 9 p.m., with partial route suspension after 9 p.m.
  • Lines 52–Farmington/185th, 77–Broadway/Halsey, and 81–Kane/257th: Hourly after 9 p.m. on weekdays.

These targeted adjustments aim to address a projected $300 million budget gap over the coming years, driven by operating costs rising over 50% since 2019, ridership recovering to only about two-thirds of pre-pandemic levels, and insufficient new funding sources. A second phase of similar reductions on additional lines is planned for March 2026, with broader changes potentially following in late 2026 and 2027 if revenue challenges continue.

While these initial cuts are modest and timed for off-peak periods, they signal ongoing fiscal pressures on public transit in the Portland metro area.

Appraisal Implications

Residential Properties

Reliable transit access contributes to neighborhood demand and home marketability in the Portland region, particularly in areas with higher Transit Scores. These evening-focused reductions may have limited immediate impact on most single-family homeowners, many of whom have vehicle alternatives for off-peak travel.

Appraisers should remain attentive to buyer preferences in affected submarkets, such as parts of East Multnomah County or Washington County’s outer corridors served by these lines. Properties near core MAX stations or frequent daytime routes are likely to retain stronger connectivity advantages.

Multifamily Properties

Multifamily operators and investors may benefit from closer monitoring of these changes, especially for properties serving tenants with lower vehicle ownership rates. Reduced evening bus frequencies could subtly influence tenant convenience for shift workers or late commutes, potentially affecting renewal rates or lease-up pacing in directly impacted areas.

Early rider feedback highlights these concerns: parents report challenges managing long waits with children during appointments, while commuters note risks of lateness for evening shifts. For income valuations, any emerging softness in rents or occupancy—particularly in outlying complexes reliant on these specific lines—could inform minor adjustments to projected income streams. Core urban assets with redundant transit options should experience minimal effects.

Market Context

Portland’s housing policies continue to emphasize transit-oriented development and density to support affordability and sustainability goals. These initial service reductions—limited to off-peak hours—create some tension with those objectives, as reduced evening access may encourage greater car dependency in affected areas, countering recent efforts to reduce parking minimums and enhance walkability.

Appraisers, lenders, and investors in transit-reliant submarkets should monitor emerging patterns in lease-ups, renewal rates, and buyer feedback as riders adapt to the changes.

Sources & Further Reading

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CODA

Are you an agent in Portland and wonder why appraisers always do “x”?

A homeowner with questions about appraiser methodology?

If so, feel free to reach out—I enjoy connecting with market participants across Portland and the surrounding counties, and am always happy to help where I can.

And if you’re in need of appraisal services in Portland or anywhere in the Portland Region, we’d be glad to assist.

Portland Real Estate Appraisal Brief – Tuesday, December 9, 2025: Oregon DOJ Settlement Clears 669 MV Realty Home Liens

The Oregon DOJ secured a settlement with MV Realty, clearing 669 restrictive 40-year listing liens affecting homes in the Portland metro area and throughout the state.

Close-up of a printed deed document, representing the clear title restored to Portland metro area homes after the MV Realty lien settlement.
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Major Consumer Settlement Voids Restrictive 40-Year Contracts

In a significant action benefiting homeowners across the Portland region and Oregon, the state’s Department of Justice (DOJ) has secured a settlement with Florida-based MV Realty, resolving allegations of deceptive practices involving “Homeowner Benefit Agreements” (HBAs). These controversial agreements provided property owners with a small, upfront cash payment—often only a few hundred dollars—in exchange for exclusive rights to list the home with MV Realty for a period of 40 years.

The key to the scheme’s success was its aggressive targeting. The Oregon DOJ specifically noted that the program utilized “deceptive and coercive marketing to trap Oregon homeowners”. This practice was designed to entice homeowners who needed immediate, small cash payments, trapping them in contracts that Attorney General Dan Rayfield described as “outrageous”—an attempt to hold property equity hostage for decades. Lawsuits filed by other Attorneys General across the country further confirm this was a pattern of “predatory financial product” marketing aimed at “cash-strapped homeowners” and the elderly, often for a payout that amounted to less than 0.3% of the home’s value.

The central concern for the real estate industry was the recording of memoranda of these agreements on property titles. These filings acted as encumbrances, creating a significant cloud on title that could complicate or prevent critical transactions like sales, refinances, or equity access without the homeowner paying substantial termination penalties to MV Realty. In Oregon, 669 such active agreements were in place, potentially exposing affected homeowners to over $7.9 million in combined termination fees.

Under the terms of the settlement, MV Realty was required to fully release all 669 active agreements and associated title encumbrances no later than December 5, 2025. This critical deadline ensures that affected homeowners owe no further fees to the company and regain unrestricted control over listing and property transactions.

Appraisal Implications of Title Encumbrances

Clear and marketable title is fundamental to accurate residential appraisal practice and is a prerequisite for nearly all mortgage lending in the Portland metro area. The presence of an active, restrictive lien, particularly one rooted in a predatory agreement, directly impairs the marketability and financeability of a property, thus potentially diminishing its market value.

Appraisers are tasked with evaluating the specific bundle of rights being conveyed, most commonly the Fee Simple Estate. Encumbrances like the MV Realty memoranda, if flagged, required appraisers to note exceptions and contingencies in their reports, affecting assumptions about marketability and often leading to lender rejection of the collateral. The settlement resolves this issue for properties across our service area, including Clackamas, Multnomah, and Washington counties.

Verification of Unencumbered Status

With the mandated releases complete or imminent as of this posting date, these properties across Oregon now benefit from restored clear title. However, the onus is on transactional parties to confirm the resolution.

Lenders, REALTORS, estate planners, and attorneys handling sales, refinances, or equity transfers involving previously affected properties must perform due diligence to verify the official recording of the release documents through county records. Direct confirmation of the removal of the encumbrance from the county recorder’s official files is the only definitive proof that the title is clear.

Homeowners who previously signed these agreements are strongly advised to retain documentation of the settlement and monitor their title updates closely.

For a broader perspective on how sales volume and pricing are performing in the absence of artificial marketability barriers, refer to our most recent data-driven report, the Portland Region Q3 2025 Market Update.

Sources & Further Reading

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Thanks for reading—I hope you found a useful insight or an unexpected nugget along the way. If you enjoyed the post, please consider subscribing for future updates.

CODA

Are you an agent in Portland and wonder why appraisers always do “x”?

A homeowner with questions about appraiser methodology?

If so, feel free to reach out—I enjoy connecting with market participants across Portland and the surrounding counties, and am always happy to help where I can.

And if you’re in need of appraisal services in Portland or anywhere in the Portland Region, we’d be glad to assist.