Portland Housing Bureau releases RFP for $180,000 in East Portland grants to strengthen nonprofit capacity for housing outreach, education, and resident support amid regional affordability challenges.
Up to two awards of $90,000 each will be made for an initial one-year term, with potential renewal based on performance and funding availability. Eligible applicants include registered 501(c)(3) nonprofits focused on East Portland; other community groups or coalitions may apply with a fiscal sponsor.
Funds offer flexible support for organizational strengthening and housing-related activities, such as staff salaries, community outreach, education on housing policies, resident engagement in planning processes, leadership training, strategic planning, and equipment needs. Large-scale capital projects, real estate development, and political activities are ineligible.
Proposals should align with organizational strengths and may incorporate connections to climate resilience or environmental justice. Applications require a brief organizational overview, fund use summary, timeline, budget, and assessment approach.
Applicants new to the WebGrants system must register a profile by December 21, 2025, to allow processing time, while full proposals are due December 29, 2025. Optional informational sessions via Zoom are scheduled for December 15 (10:00–11:00 AM) and December 18 (3:00–4:00 PM), 2025. Awards will be announced January 12, 2026, with contracts starting February 2, 2026.
Appraisal Implications
Initiatives like these grants aim to enhance nonprofit capacity for outreach and resource navigation in underserved areas of the Portland metro area. For appraisers, understanding community-driven efforts to address displacement risks and improve housing access provides valuable context when evaluating neighborhood stability and long-term affordability trends in eastside submarkets.
This funding complements broader challenges in activating affordable housing resources, as discussed in yesterday’s brief on the affordable housing paradox — where 1,863 income-restricted units remain vacant amid administrative and outreach hurdles.
Market Context
The Portland region continues to grapple with affordability pressures, particularly in areas with historic underinvestment. Community capacity building may help bridge gaps in resident education and engagement, supporting more effective utilization of existing housing programs without immediate large-scale construction.
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.
Portland Skyline & Hawthorne Bridge Stock photo via Canva Pro
This week examined regulatory hurdles and supportive federal adjustments defining the Portland–Vancouver metro landscape, from stark rent cap and relocation differences favoring Washington investors in larger properties to a multistate lawsuit challenging HUD’s funding shifts. FHFA’s loan limit expansions and Portland’s code easing for denser apartments offered pathways to enhanced liquidity and infill supply in the region.
Sunday, November 30: Oregon vs. Washington Rent Caps
Via Wikimedia Commons
Cross-border differences in rent stabilization create distinct risk profiles for income property investors in the Portland–Vancouver metro area, particularly around the pivotal 4-to-5 unit threshold that shifts financing from conventional to commercial. Both states prohibit rent increases in the first year of tenancy and cap annual hikes at the lesser of 7% plus CPI or 10%, with 90-day notice requirements. Oregon mandates relocation assistance—one month’s rent—for no-cause terminations by landlords owning 5+ units statewide under ORS 90.427, while Portland overlays stricter rules under PCC 30.01.085, requiring payments of $2,900–$4,500 for increases of 10% or more, regardless of landlord size, with penalties up to three times monthly rent.
Washington imposes no statewide relocation mandate, offers exemptions for buildings under 12 years old and owner-occupied 2–4 plexes, and enforces via Attorney General fines up to $7,500. This absence of relocation costs in Washington provides a material cash-flow advantage for 5+ unit owners in Clark County, enhancing refinance eligibility and net operating income stability compared to Oregon counterparts.
For appraisers and investors in the Portland region, these rules promote tenancy predictability but elevate compliance burdens in Oregon, particularly Portland city limits, influencing vacancy allowances and income approach valuations. Properties in high-turnover areas may see dampened risks from stabilized occupancy, while cross-river opportunities in Washington accelerate value growth for newer or exempt developments.
Monday, December 1: Inherited Rental Property Challenges
Inheriting 2–4 unit rentals in Oregon frequently involves below-market rents entrenched by statewide caps and Portland’s relocation requirements, creating significant valuation discounts that persist post-death of the original owner. The 2026 rent cap at 9.5% permits gradual increases after 12 months, but no-cause evictions are barred thereafter, and qualifying terminations trigger costs. Appraisers apply gross rent multipliers (typically 165–195 in Portland metro submarkets) to contract rents, yielding discounts of 20–40% versus market-rate scenarios—for instance, a duplex with $4,000 monthly contract rent versus $5,400 market might value at $720,000 instead of $972,000 using a GRM of 180.
Duplexes offer heirs the most flexibility, allowing termination for owner or family move-in with 90-day notice and often exempt from Portland relocation fees if occupying as primary residence. Triplexes and fourplexes face higher barriers, requiring full payments of $4,200+ per unit, often leaving low NOI intact indefinitely. A recent North Portland fourplex sale at $768,000 reflected a 12–14% discount tied to below-market tenancies of $58,026 annual income versus projected $66,120.
In the Portland metro area, this “locked-in tenancy discount” complicates estate planning and probate appraisals, urging documentation of both contract and market rents. Stable cash flow from existing tenants may represent highest and best use, avoiding costly resets—Certified Residential appraisers must carefully scope assignments to reflect these regulatory constraints accurately.
Oregon and Washington joined a coalition of approximately 20 other states in suing HUD over FY 2026 changes to the $3.9 billion Continuum of Care program, capping permanent supportive housing at 30%—down from nearly 90%—while adding service mandates and anti-camping enforcement penalties. This risks a $39 million loss for Oregon and significant cuts to Washington’s $120 million annual grants, much supporting Portland-adjacent counties like Multnomah and Clark. Nationwide, up to 170,000 households face displacement, undermining Housing First models prevalent in the Pacific Northwest.
The lawsuit, filed November 25, 2025, alleges violations of Congressional intent and the Administrative Procedure Act by bypassing proper rulemaking. Local supplements like Metro’s Supportive Housing Services Measure cannot fully replace federal funds.
For the Portland metro region, reduced grants could increase unsubsidized rental demand, pressuring rents and entry-level prices while introducing NOI volatility for subsidy-dependent properties. Appraisers evaluating LIHTC or supportive housing must monitor neighborhood stability and cap rate shifts, as funding instability may alter highest and best use analyses.
Wednesday, December 3: 2026 Conforming Loan Limit Increase
Constitution Center (400 7th Street SW, Washington, D.C.) – headquarters of the Federal Housing Finance Agency (FHFA). Photo: Ajay Suresh via Wikimedia Commons (CC BY 2.0)
FHFA announced the 2026 baseline conforming loan limit at $832,750 for one-unit properties, a $26,250 increase reflecting 3.26% house price growth. In the Portland–Vancouver MSA, this shifts loans up to the new threshold into lower-rate conventional financing from Fannie Mae and Freddie Mac.
Q3 2025 data showed 99 sales between the old $806,500 limit and new figure, averaging $820,864 closing price with 49-day market time—70 conventionally financed now fully conforming. Overall, 85.48% of 4,682 single-family closings fell under $900,000, with 367 in the $800,000–$899,999 band.
This adjustment eases qualification in mid-to-upper tiers for Portland region buyers and investors, reducing jumbo loan friction and supporting market stability where most activity remains conforming-eligible.
Thursday, December 4: Modest National Home Sales Gains
Portland Oregon skyline at dusk. Photo: Razvan Orendovici via Wikimedia Commons (CC BY 2.0)
October 2025 delivered subtle national improvements, with existing-home sales rising 1.2% month-over-month to a 4.10 million-unit annual rate (up 1.7% year-over-year) and pending sales up 1.9%. Median price reached $415,200 (up 2.1% year-over-year), against 1.52 million units inventory (4.4 months’ supply, up 10.9% annually). Rates around 6.25% supported activity amid regional variances—the West lagged with pending sales down 1.5% monthly and 7.0% annually, median at $628,500.
Portland’s Q3 single-family median held at $600,000, below the West but above national, framing local performance in a high-cost context with decelerating growth.
These trends provide appraisers in the Portland metro area broader stability signals, informing valuations amid affordability constraints and inventory buildup.
Friday, December 5: Multifamily Loan Purchase Caps Raised
Modern multifamily building in Portland Stock photo via Canva Pro
FHFA increased 2026 multifamily loan purchase caps to a combined $176 billion—up over 20% from 2025—as a floor to maintain liquidity amid maturing debt and construction slowdowns exceeding 50%. At least 50% must be mission-driven affordable housing, including LIHTC or rural projects, with workforce units (80–120% AMI, 10-year restrictions) exempt and counting toward thresholds if 20% qualify.
In the Portland metro, facing 5.5–7.5% vacancy rates, this bolsters refinancing in submarkets like Vancouver and Beaverton, stabilizing cap rates against rent cap headwinds. It supports rental supply essential for easing single-family pressure, enhancing GRMs for 1–4 unit appraisals and marketability of workforce housing.
Investors gain reliable capital for commercial multifamily; appraisers benefit from reduced NOI volatility in a shortage-prone region.
Saturday, December 6: Single-Exit Four-Story Apartment Code Easing
Three-story, 16-unit apartment building on a 5,000 sq ft lot—an early example of the infill density now fully achievable in Portland’s RM1 and RM2 zones under current zoning and the 2025 single-exit stairwell provisions 11 NE 55th Ave, Portland, Oregon – December 2025 Photo: Abdur Abdul-Malik, Certified Residential Appraiser
Portland’s Building Code Guide 25–10, approved October 22, 2025, permits single-exit stairwells in four-story apartments under the 2025 Oregon Structural Specialty Code, slashing circulation space to 6.5% from 13–16% and enabling denser infill in RM1/RM2 zones with no maximum unit limits (minimums: RM1 at 1 per 2,500 sq ft; RM2 at 1 per 1,450 sq ft). An example at 11 NE 55th Ave—a three-story 16-unit building on a 5,000 sq ft lot (land sold for $650,000)—demonstrates pro forma value exceeding $3.3 million at a 5.17% cap rate with $256,005 annual income.
This shifts highest and best use toward multifamily on small lots, lifting land values and accelerating medium-density housing amid shortages. Adjacent single-family properties now warrant demolition analyses for redevelopment potential.
Certified Residential appraisers must take this seriously—the increased density often exceeds four units, rendering many RM1/RM2 assignments out-of-scope and requiring Certified General expertise. Concluding four or fewer units as highest and best use risks incomplete analyses if pro formas support higher counts, potentially violating USPAP scope requirements in transitional zones.
Rent regulation disparities and HUD funding threats underscored valuation pressures on rentals and affordability in the Portland region, countered by FHFA’s expansive financing and local code relaxations promoting supply. National trends added modest context to these evolving dynamics.
Changes to Portland’s building code has made for more challenging valuations of sites in transitional zones (RM1/RM2)—certified residential appraisers will need to be particularly careful appraising properties in such zones as they will very likely require analysis only a certified general appraiser is licensed to do.
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.
Question: With code changes opening denser multifamily and FHFA boosting financing, how might these influence your approach to assignments in Portland’s transitional zones?
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’s inclusionary zoning is producing units, but 1,863 income-restricted apartments remain vacant amid funding cuts and administrative delays—creating measurable valuation risk for residential and multifamily professionals.
Empty interior of an income-restricted apartment unit in Portland, symbolizing the region’s persistent vacancies in affordable housing programs Via Canva Pro
Policy Wins Collide With Activation Barriers
Portland’s affordable housing programs are delivering a classic paradox: policy mechanisms are finally producing new income-restricted units, yet nearly 1,900 completed apartments—representing a 7.4% vacancy rate across the region’s 25,409 subsidized units—sit empty while homelessness continues to climb.
The city’s inclusionary zoning program, which requires or incentivizes developers to reserve a portion of new units for households earning 60% or less of area median income (AMI)—where the FY 2025 median family income for a 4-person household in the Portland-Vancouver-Hillsboro OR-WA MSA is $124,100—has shown measurable improvement in actual unit production after years of refinement. This is a hard-won policy success in a market that has long struggled to integrate affordability into private development.
These gains, however, are being undermined by systemic activation challenges. Home Forward, Multnomah County’s primary administrator of subsidized housing and the Housing Choice Voucher (Section 8) program, faces a $35 million budget shortfall that includes a $14 million cut in federal voucher funding. The agency has paused new voucher issuances, eliminated at least 12 positions, and extended waitlists that already see roughly seven applications for every opening.
Providers cite a combination of administrative delays, rising operational costs, higher post-pandemic eviction rates, and narrowing rent gaps (42% of metro units are now within 10% of market rent) as the main drivers of prolonged vacancies. As Reach Community Development’s executive director noted, “even affordable rents are too high” for many eligible households without deeper subsidies.
Mayor Keith Wilson has explicitly linked these activation failures to the region’s homelessness crisis. Although 890 of a targeted 1,500 new low-barrier shelter beds are now open, many operate at just over 50% occupancy—compared with 87% at existing 24-hour shelters—because permanent housing remains the preferred exit. With more than 7,500 individuals unsheltered in Multnomah County (up over 1,000 since January 2025) and monthly inflows of ~1,400 people outpacing permanent placements of ~1,100, the region continues to see a net increase in homelessness.
Appraisal Implications
These activation failures translate directly into valuation and underwriting risk for professionals across the Portland metro area.
Residential Properties
Inclusionary zoning covenants create deed-restricted comparables that must be segregated from market-rate sales. As the program matures, appraisers in Multnomah, Clackamas, Washington, Columbia, Yamhill, and Clark counties will see a growing volume of these restricted transactions, especially in newer condominium and mixed-use projects—though the highest concentration remains within the City of Portland’s jurisdiction in Multnomah County. With the Q3 2025 median price for detached single-family homes in the region at approximately $600,000—as noted in our Q3 2025 Portland region market update—the gap between market-rate ownership and income-restricted pricing remains stark.
Multifamily and Investment Properties
The 1,863 vacant income-restricted units create an immediate drag on potential gross income and stabilized net operating income (NOI). Projects financed through Low-Income Housing Tax Credits (LIHTC) or subject to inclusionary requirements now face extended lease-up periods—often months rather than weeks—due to public-agency bottlenecks. Recent FHFA increases to 2026 multifamily loan purchase caps may encourage new supply, but activation risks remain a key variable.
Appraisers using the income approach should give heightened scrutiny to:
Vacancy allowances (increase for policy-induced vacancy)
Capitalization rates (higher risk typically justifies higher cap rates)
Lenders and investors underwriting affordable or mixed-income developments must incorporate longer stabilization horizons and potential LIHTC compliance risks into their models.
Market Context
When finished apartments remain offline, the housing-homelessness pipeline stalls, forcing greater reliance on temporary shelter systems even as permanent supply begins to grow.
Resolving this paradox will require targeted investment in administrative capacity and deeper subsidy layers to match completed units with the households who need them most.
Sources & Further Reading
Nearly 1,900 affordable Portland apartments sit empty (OregonLive)
Portland’s Inclusionary Zoning Program Is Finally Performing (Sightline Institute)
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.
Portland’s code now allows single-exit stairwell apartments, raising the maximum unit count on infill lots and posing a compliance challenge for Portland Certified Residential Appraisers.
Three-story, 16-unit apartment building on a 5,000 sq ft lot—an early example of the infill density now fully achievable in Portland’s RM1 and RM2 zones under current zoning and the 2025 single-exit stairwell provisions 11 NE 55th Ave, Portland, Oregon – December 2025 Photo: Abdur Abdul-Malik, Certified Residential Appraiser
Easing Regulatory Barriers to Mid-Rise Infill
The City of Portland’s Bureau of Development Services, in coordination with Portland Fire & Rescue, approved a final Building Code Guide (BCG 25–10) on October 22, 2025, that permits single-exit stairwells in certain apartment buildings up to four stories in height. This guide implements a provision already adopted within the 2025 Oregon Structural Specialty Code (OSSC), removing a significant regulatory barrier that often rendered mid-rise infill housing financially and physically impractical on constrained urban lots throughout the Portland metro area.
This code clarification aligns Portland with the practices of progressive code adopters, including Seattle and various international jurisdictions, which have successfully and safely utilized single-stair designs for decades. The change is particularly relevant for infill sites—common in Portland’s established neighborhoods—where lot width or depth previously made the mandatory two-stairwell design economically unfeasible.
The economic advantage is substantial: traditional two-stair designs can consume 13–16% of the total floor area for circulation (stairs and hallways). A single-stair “point access block” can reduce circulation space to as little as 6.5% of the floor area, effectively converting otherwise unusable common space into leasable or saleable residential square footage. The push to allow this type of construction illuminates the entangled intersection between safety, housing affordability, and building codes at a national level. This efficiency boost is key to making medium-density projects feasible in high-cost urban environments. The new allowance is expected to have a greater impact on Multi-Dwelling (RM) zones than on the R2.5–R20 zones, where unit counts are generally capped at six.
Appraisal Implications for Real Estate Valuation
The finalization of single-exit guidelines has direct implications for certified residential appraisers (CRs), lenders, and real estate professionals in the Portland region.
Multifamily Development and the CR 4-Unit Limit
The new guideline creates a direct compliance challenge for CRs. CRs are restricted to appraising residential properties containing four or fewer units.
The 16-unit apartment building at 11 NE 55th Ave provides a perfect case study: it is constructed on a 5,000 sq. ft. lot, which is a standard lot size for Portland. While this specific site is zoned CM2 (Commercial Mixed Use 2), it is a very common setup in transitional zones like RM1 or RM2 and makes for a warning of the complexities residential appraisers will now face on an increasing number of sites throughout the City of Portland. A comprehensive and thorough highest and best use analysis (H&BU) will be even more paramount for CRs going forward.
The Land Sale vs. Home Sale Trap (The H&BU Pitfall):
Here is what existed on the site prior:
Single-family residence formerly at 11 NE 55th Ave (CM2 zone) prior to demolition and redevelopment into 16-unit multifamily Portland, Oregon – circa 2019 (Google Street View archive) Photo: Google Street View (public domain)
Note the home to the right of the subject. That neighboring home has RM2 zoning and still exists to this day. For the sake of illustration, let’s pretend the subject itself was located in the same RM2 zone. (The problem would also exist if it were in the RM1 zone.) I have always been wary of appraising properties in RM1 and RM2 zones due to the potential of unit density exceeding my license scope. However, in some select areas, a careful highest and best use analysis shows four units or less is still the market preference, or perhaps the only options feasible. Constructing an apartment building like the subject in an RM1 or RM2 zone was more difficult prior to the recent zoning change. A residential appraiser viewing the subject’s original home could easily come to the conclusion that the H&BU is still residential, as that conforms to the next door property. However, the financial data proves the site’s H&BU shifted long ago:
Negative Value: The original house effectively had negative value, as the developer purchased the site for $650,000 in early 2024, intending only to demolish the structure and build up.
Land Value: The $650,000 purchase price was solely a land sale based on the potential to build high density—a potential maximized by the single-stair allowance.
The New H&BU: The resulting 16-unit asset, listed at over $3.3 million, confirms the H&BU is a multifamily property that requires a Certified General (CG) Appraiser.
Pro Forma Income: Because the building is new and actively offering rental concessions (e.g., free rent) to tenants, the listing’s financial figures are projected (pro forma). It has a Projected Gross Annual Income of $256,005 and a Pro Forma Cap Rate of 5.17%—financial metrics based on achieving full market rents and directly tied to the single-stair design’s efficiency. Appraising such a property requires a lease-up analysis and would necessitate a Certified General Appraiser to determine both the As-Is and As-Stabilized values.
Risk Area (RM1 & RM2): The greatest risk for CRs lies in Transitional Multi-Dwelling zones (like RM1 or RM2). These zones can get complicated quickly, and the single-stair allowance now pushes the practical development cap far beyond the CR’s 4-unit limit, even on small parcels.
Required Due Diligence: CRs must perform careful due diligence when analyzing the H&BU of transitional or infill parcels. If the H&BU conclusion is a multi-unit property exceeding four units, the assignment falls outside the scope of a CR license, and the assignment must be transferred to a Certified General Appraiser.
This apartment building on the street (made possible by the single-stair allowance) has now greatly complicated any future appraisals for the adjacent home. The adjacent home sits on a lot the same size (5,000 sq. ft.).
Adjacent single-family home on a matching 5,000 sq ft lot zoned RM2—identical in size to the 11 NE 55th Ave site now redeveloped with a three-story, 16-unit apartment building NE 55th Ave (North Tabor), Portland, Oregon – December 2025 Photo: Abdur Abdul-Malik, Certified Residential Appraiser
An appraisal on this home would now need to take into account the potential to remove the dwelling and place a 16-unit apartment building on the site. The apartment building next door, even though in a different zoning, proved that such a structure is physically possible on a 5,000 sq. ft. lot. Now, with the zoning law change, such a structure is also much more likely to be greenlit following a formal review by the planning department. Even if all the structures on this street were residential homes, a CR can no longer assume four units or less is the H&BU if the zoning is RM1 or RM2.
Density Rules Every Portland Appraiser Needs Tattooed on Their Forearm
In most of Portland’s multi-dwelling zones (RM1–RM4 and RX) there is no maximum density—only minimums. The City’s own table spells it out clearly:
Zone
Maximum Density
Minimum Density (base)
RM1
None
1 unit per 2,500 sf
RM2
None
1 unit per 1,450 sf
RM3
None
1 unit per 1,000 sf
RM4
None
1 unit per 1,000 sf
RX
None
1 unit per 500 sf
RMP
1 per 1,500 sf (bonus to 1 per 1,000 sf)
1 per 1,875 sf
Source: City of Portland Bureau of Development Services – Density and Lot Dimensions in Multi-Dwelling Zones (09/27/2024)
On a typical 5,000 sq ft lot with no overlays:
RM1 → minimum 2 units, no upper limit
RM2 → minimum 3–4 units, no upper limit
Highest-and-Best-Use Reality Check for Certified Residential Appraisers
Unless a site in RM1, RM2, RM3, RM4, or RX has obvious, insurmountable physical or regulatory constraints (steep topography, protected trees requiring preservation, environmental overlay zones, landslide hazard, historic designation, or similar), a credible H&BU analysis can no longer conclude that single-family, duplex, triplex, or fourplex development is the concluded use without first testing a multifamily pro forma that likely exceeds four units.
Doing so risks an incomplete analysis and, more critically, completing a valuation that falls outside the Certified Residential license scope.
Appraisers: be careful!
Land Value and Investment Properties
The zoning change also directly affects land value and the as-completed project feasibility by allowing for a more efficient and profitable building design. This local regulatory shift also aligns with supporting federal policy, such as the Federal Housing Finance Agency (FHFA) increasing the combined volume cap for Fannie Mae and Freddie Mac’s multifamily loan purchases to $176 billion for 2026.
Market Context
Portland continues to grapple with a housing shortage, making any code modification that reduces hard construction barriers on infill parcels a necessary and impactful step. The North Tabor neighborhood where this property is located is appealing for investors, characterized by an urban-suburban mix and a high proportion of renters. This demographic composition and investor demand underscores the high asking price for turnkey rental assets like the new construction apartment building in our case study.
For lenders, realtors, estate planners, and attorneys, it is crucial to recognize that the appraisal of these new single-stair buildings will require a deep understanding of the regulatory context. Appraisers must accurately reflect the specific size, unit count, and advanced fire-safety features required by the Building Code Guide 25–10 to ensure a credible valuation and appropriate comparable selection.
Sources & Further Reading
New Portland guidelines for single-stair apartment buildings: News
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, lawyer, or estate planner 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.
The FHFA raised the 2026 multifamily loan purchase caps for Fannie Mae and Freddie Mac to $176 billion, a move that supports financing and affects property valuations in the Portland metro area.
Modern multifamily building in Portland Stock photo via Canva Pro
FHFA Announces $176 Billion in 2026 Multifamily Loan Purchase Caps
The Federal Housing Finance Agency (FHFA), regulator of Fannie Mae and Freddie Mac (the Enterprises), has set the annual multifamily loan purchase caps for 2026 at $88 billion for each Enterprise, resulting in a combined total of $176 billion in financing capacity. This figure represents a robust increase of more than 20% from the $73 billion cap per Enterprise in 2025. The expanded capacity is intended to maintain liquidity in the multifamily market, especially as lending activity is projected to stabilize and as older loans mature, requiring refinancing.
For perspective, the combined cap was $140 billion in 2024 ($70 billion each) and $146 billion in 2025 ($73 billion each). The nearly $30 billion increase between 2025 and 2026 is a strong signal of anticipated market strength.
The FHFA confirmed that the caps are a floor, not a ceiling. FHFA Director William J. Pulte stated the agency will monitor lending activity throughout the year and has the discretion to increase the caps further if warranted by market conditions, but will not reduce them—a policy designed to prevent disruption in rental housing finance.
Crucially, the mission-driven focus remains a key mandate: at least 50% of the Enterprises’ multifamily loan purchases must qualify as mission-driven affordable housing.
FHFA multifamily loan purchase caps for Fannie Mae and Freddie Mac Data: FHFA | Chart: PortlandAppraisalBlog.com
Mission-Driven Focus and Exemptions
The FHFA has maintained specific provisions to support underserved segments of the market:
Workforce Housing Exemption: Loans financing workforce housing—properties with rent or income restrictions for at least 10 years or the loan term, typically targeting tenants earning 80% to 120% of area median income (AMI)—are exempt from the volume caps and count fully toward the mission-driven threshold if at least 20% of units meet affordability criteria.
Affordability Requirements: The mission-driven criteria also include properties with regulatory agreements (e.g., Low-Income Housing Tax Credit/LIHTC), those in rural areas, and financing for small-scale affordable units in high-cost or cost-burdened markets. The FHFA has also recently complemented these purchase limits by doubling the annual LIHTC investment cap to $2 billion per Enterprise, which could accelerate multifamily construction starts in 2026.
This commitment to affordability ensures that a substantial portion of the capital is directed toward maintaining and increasing the supply of rental housing for lower- and moderate-income residents, a critical need nationwide and across the Portland region.
Appraisal and Valuation Implications for the Portland Region
The increased national lending capacity for multifamily properties has subtle yet important implications for certified residential and commercial appraisers, as well as the homeowners, lenders, and investors they serve across the Portland–Vancouver metro area.
Residential Properties (1–4 Units)
For residential stakeholders, the robust federal support for multifamily lending indirectly influences the single-family market. By increasing the capital flow for new and existing rental properties, the FHFA action helps stabilize the rental supply, which in turn can ease demand pressure that might otherwise shift to single-family inventory in high-demand areas.
In Oregon and Washington counties, including Multnomah, Washington, and Clark, this broader stability aids in appraising the smaller, 2–4 unit residential income properties often financed through conventional Fannie Mae/Freddie Mac channels. Appraisers should note that in the income approach, the assurance of strong capital markets for rental housing—particularly those properties meeting workforce housing needs—provides a stabilizing factor for Gross Rent Multipliers (GRMs) and capitalization rates used in valuation. This financing stability offers a necessary counterbalance to the volatility introduced by local regulations, such as Oregon’s statewide rent increase limits (set at 9.5% for 2026) and Portland’s mandatory relocation assistance policies (triggered by a 10% rent increase or higher). Crucially, the 9.5% state cap means the state maximum increase does not automatically trigger the significant financial liability of relocation assistance within Portland city limits.
Commercial / Multifamily (5+ Units)
For the commercial and investment real estate segment, which includes properties with five or more units, the increased $176 billion cap is a clear positive. It reinforces the Enterprises as a reliable, deep source of capital in the Portland–Vancouver corridor, where investment sales have been concentrated in Vancouver, Milwaukie, and Hillsboro/Beaverton submarkets.
Appraisers valuing these assets should incorporate the following:
Cap Rate Stability: The strong financing capacity acts as a floor, limiting upward pressure on capitalization rates that might otherwise result from tighter credit conditions.
Workforce Housing Marketability: The explicit cap exemption for workforce housing loans is highly relevant. Appraisers must consider a property’s potential eligibility for this favorable financing when assessing its highest and best use and marketability, especially in submarkets facing high rent growth or in communities like those in Cowlitz and Skamania counties where mission-driven initiatives promote long-term affordability.
Market Context: The assurance of this funding stream is timely, as the Portland metro multifamily market currently faces an elevated vacancy rate (ranging from approximately 5.5% to 7.5%, with higher rates for luxury Class A units) due to a wave of recent new deliveries. However, the pipeline is slowing significantly (new construction starts down over 50%), suggesting this capital will be available precisely as the market rebalances and conditions tighten.
Market Context
The FHFA’s decision to increase the combined cap to $176 billion is broadly supported by industry groups like the Mortgage Bankers Association (MBA) and the National Association of Home Builders (NAHB). This federal framework is expected to bolster the long-term rental stability that is crucial for the Portland metro area. The increased lending capacity comes at a pivotal time, mitigating the risk of a future housing shortage that could result from the current dramatic slowdown in new development across the region. The decision aligns the national financial framework with the local market’s need for capital, particularly for mission-driven and workforce housing, which remains a consistent demand factor for appraisers to consider.
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, lawyer, or estate planner 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 Appraisal Blog 
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