FHFA raises the 2026 conforming loan limit to $832,750. In Q3 2025 alone, 99 Portland-area sales (70 conventionally financed) closed $806,501–$832,750 and will now avoid jumbo status.
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)
The Federal Housing Finance Agency (FHFA) has released its annual conforming loan limit values for 2026, effective January 1 for mortgages acquired by Fannie Mae and Freddie Mac. The baseline limit for one-unit properties increases to $832,750 — up $26,250 from the 2025 figure of $806,500 — reflecting a 3.26% rise in the national House Price Index from the third quarter of 2024 to the third quarter of 2025.
All counties in Oregon and the Portland-Vancouver-Hillsboro MSA remain at the baseline limit; no high-cost ceiling applies in our region.
In Q3 2025 alone, 99 residential properties in the six-county region closed between $806,501 and $832,750. Of those, 70 were financed conventionally — transactions that would have required jumbo terms in 2025 but will now stay fully conforming in 2026.
Across the full quarter (4,682 total SFR detached-class closings):
85.48 % (4,002 sales) closed under $900,000
Only 14.52 % (680 sales) closed at or above $900,000
The single busiest upper-tier band was $800,000 – $899,999 with 367 sales
Market Context from Q3 2025 Actual Sales
Price Band
# of Sales
% of Total Market
Avg Close Price
Avg CDOM
$800k– $899k
367
7.84 %
$847,313
51 days
$806,501 – $832,750
99
2.11 %
$820,864
49 days
≥ $900k
680
14.52 %
≈ $1,340,000+
72+ days
For appraisers, lenders, realtors, estate planners, and attorneys, the 2026’s higher limit removes friction from one of the region’s most active price segments and keeps 85+% of transactions comfortably conforming.
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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.
Oregon and Washington are among 20 states suing HUD over rule changes to the Continuum of Care grant program, which could cut millions in Portland housing funds.
Federal Housing Funding Rule Faces Regional Legal Challenge
A coalition of approximately 20 states, including Oregon and Washington, has filed a lawsuit against the U.S. Department of Housing and Urban Development (HUD) over recent, sweeping changes to the $3.9 billion federal Continuum of Care (CoC) grant program. This legal action, filed on November 25, 2025, challenges a dramatic overhaul of funding priorities and conditions for the primary federal initiative supporting homelessness assistance.
The CoC program historically allocated nearly 90% of its funding to permanent housing solutions, a strategy known as “Housing First.” The new HUD Notice of Funding Opportunity (NOFO) for Fiscal Year 2026, however, drastically reduces the maximum funding available for permanent supportive housing to 30%, risking the displacement of an estimated 170,000 households nationwide. For the Portland region, this shift is especially critical, as Oregon alone stands to lose approximately $39 million in federal housing support, a figure cited by the Oregon Department of Justice. Washington State, which receives about $120 million annually in CoC grants, sees a substantial portion flow to its counties bordering the Portland metro area, including Clark County.
State attorneys general argue that HUD violated Congressional intent and the Administrative Procedure Act by imposing abrupt and sweeping changes without proper public rulemaking, as detailed in the official press release from the Washington State Attorney General. Beyond the funding cuts, the lawsuit cites new controversial conditions, including requirements for providers to mandate services as a precondition to housing and penalize jurisdictions that do not enforce strict anti-camping bans—policies that conflict with current practices in many Pacific Northwest cities. The national scope of the lawsuit underscores the destabilizing nature of the change.
Appraisal Implications
For certified residential appraisers working in the Portland metro area—encompassing counties like Multnomah, Washington, and Clackamas in Oregon, and Clark in Washington—the outcome of this lawsuit has material, though indirect, implications for property valuations, especially in the affordable and multifamily housing sectors.
Residential Properties
While CoC funds do not typically subsidize owner-occupied single-family homes, the potential displacement of tenants from permanent supportive housing could put additional strain on the already-tight rental market.
Supply and Demand Pressure: The loss of federally funded permanent supportive housing units means hundreds, if not thousands, of vulnerable residents in the region could be forced to seek alternative, unsubsidized rental housing. This influx of demand would further reduce the availability of affordable rental stock and could indirectly increase overall market rents for entry-level apartments. Higher rents, in turn, can put upward pressure on the price of smaller, owner-occupied starter homes as the rent-to-own cost dynamic shifts.
Neighborhood Stability: Appraisers must remain attuned to shifts in neighborhood stability and market dynamics. A rapid increase in unsheltered homelessness—which local leaders contend is a likely outcome of these funding cuts—can affect neighborhood marketability and, consequently, perceived value in nearby residential areas.
Tents along a city right-of-way. HUD’s homelessness-prevention programs aim to reduce street camping by stabilizing at-risk households
Commercial / Multifamily
The most direct impact is felt within the multifamily and commercial properties designed for social services and affordable housing.
Valuation of Supportive Housing Assets: Appraising existing permanent supportive housing (PSH) properties, often structured as low-income housing tax credit (LIHTC) assets or specialized nonprofit facilities, is directly tied to their funding stream. A loss or severe reduction in the reliable federal CoC operating subsidies introduces significant risk to the financial stability of these projects. Appraisers must consider:
Net Operating Income (NOI) Volatility: The immediate uncertainty regarding project renewal grants makes the NOI for these specialized assets highly volatile. This increased risk translates to a higher capitalization rate (Cap Rate) being applied by investors, which lowers the overall valuation of the property.
Highest and Best Use: A sudden and substantial policy change could force a re-evaluation of a PSH property’s Highest and Best Use if the specialized funding model is deemed permanently unviable. While unlikely to lead to immediate conversion, the risk of a future shift to conventional market-rate housing should be noted, particularly for properties nearing the end of their affordability period.
Market Context
The regional housing market operates with razor-thin margins for affordability. The Portland metro area, which includes Multnomah, Clackamas, and Washington counties, has already approved significant local measures, such as the Metro Supportive Housing Services Measure, to address the crisis. However, these local funds are intended to supplement, not fully replace, federal support. Washington State’s Clark County, which is also part of the Vancouver-Portland metro area, relies heavily on the federal structure to support its local Continuum of Care grants.
The pending lawsuit highlights the deep interdependency between federal policy, local funding initiatives, and the stability of the housing market in the Pacific Northwest. Real estate professionals—including lenders, estate planners, and realtors—must closely monitor the legal proceedings, as the outcome will dictate the long-term viability of a substantial portion of the region’s dedicated affordable and supportive housing supply.
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: Do you think this lawsuit will be resolved soon, or will it drag on for most of the year?
CODA
Are you an agent in Portland and wonder why appraisers always do “x”?
A homeowner with questions about multifamily income properties, GRMs, or income calculations?
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.
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.
Oregon’s 9.5% rent cap for 2026 combines with Portland’s relocation assistance rules, creating distinct valuation considerations for rental properties across the metro area.
When I appraise 2–4 unit residential income properties in the Portland metro area for estate, trust, or probate purposes, the single largest value depressant is almost always a long-term tenant paying far below-market rent. Oregon’s statewide rent-stabilization law and Portland’s additional relocation-assistance requirements combine to make it expensive and slow for heirs to reset those rents after the original landlord passes away.
How Below-Market Rents Survive Inheritance
Oregon law limits rent increases to once every 12 months and caps the allowable increase at 7% plus the Consumer Price Index (CPI), with an overall hard cap of 10%. For calendar year 2026, this limit is 9.5%. Certain units—such as regulated affordable housing and buildings less than 15 years old—are exempt. No-cause evictions are prohibited after the tenant’s first year of occupancy.
Many inheritors lack the cash or desire to front relocation fees and perform renovations, so the low-rent tenancy often remains in place for years. (I go into more detail in my discussion of Oregon rent control laws and the overlays the City of Portland adds.)
Appraisal Impact: Contract Rent vs. Market Rent
In the income approach for 2–4 unit residential properties, appraisers derive a gross rent multiplier (GRM) by dividing comparable sales prices by their monthly (or annual) scheduled rents, typically resulting in a three-digit figure (e.g., 165–195 in most Portland metro submarkets at present). Appraisers may also cross-check conclusions with a direct capitalization approach when income and expense data are reliable.
That GRM is then applied to the subject property’s actual contract rent. When contract rent lags 20–40% behind market—a common range in inherited portfolios— the indicated value is often proportionally lower than the same property delivered vacant or at market rent.
Example: A duplex with market rent of $2,700 per side ($5,400/month total, $64,800/year) but current contract rent of $2,000 per side ($4,000/month total, $48,000/year) and a reconciled GRM of 180 yields:
Market-rent value: $5,400 × 180 = $972,000
Contract-rent value: $4,000 × 180 = $720,000
Result: $972,000 – $720,000 = $252,000 → Difference of approximately 26% solely due to the locked-in tenancy.
For a real-world illustration, consider a recent North Portland fourplex sale from 2024. This 1966-built property sold for $768,000 with actual gross scheduled income of $58,026 annually ($4,835 monthly average across four 2-bedroom units on month-to-month leases). The listing projected $66,120 in gross income—a 14% increase—highlighting below-market rents with “opportunity for growth.” Using the market-derived monthly GRM of approximately 159 (consistent with the listing’s implied metrics), the contract-rent value aligns with the sale price, while the projected rents suggest a potential value around $875,000, representing a 12–14% discount due to the existing tenancies and regulatory hurdles to realizing that upside.
RMLS multifamily listings display scheduled rents in the public fields, and confidential remarks may note “long-term tenants – below-market rents” as an upfront acknowledgement to a potential purchaser. Savvy buyers and appraisers run the numbers immediately and adjust offers (and appraised values) accordingly.
The Challenge Scales with Unit Count
Duplexes remain the most manageable. Under Oregon law, a new owner or an immediate family member moving in is a “Qualifying Landlord Reason” for termination. This creates a realistic path to market rent within 12–18 months. Crucially, Portland’s mandatory relocation assistance is generally NOT required if the new owner occupies one unit of a duplex as their primary residence and terminates the tenancy of the second unit. This key exception significantly lowers the cost and risk of resetting the rent on a duplex in the city.
Triplexes and fourplexes are far harder. While an owner or immediate family member can still reclaim a unit (or units) in a triplex or fourplex for occupancy, this move-in termination does trigger the full Portland relocation assistance payment for each unit vacated. The cost of reclaiming multiple units often becomes the practical—and high-cost statutory—constraint. As a result, at least one protected tenant and their below-market rent often remains in place, sometimes indefinitely.
Regulatory Scenario
Duplex (Owner-Occupied)
Triplex / Fourplex
State Law Termination (Owner Move-In)
Allowed (with 90-day notice)
Allowed (with 90-day notice)
Portland Relocation Fee Required?
NO (Exempt under PCC 30.01.085.G.3)
YES (Full fees apply)
Cost to Recoup 1 Unit
Minimal (Time/Legal fees)
$4,200 – $4,500+ (plus legal fees)
Practical Guidance for Heirs and Estate Professionals
Inherited small income properties with long-term, below-market tenants routinely trade at meaningful discounts to physically identical buildings that are vacant or leased at market rates. The regulatory environment creates a durable “locked-in tenancy discount” that survives the death of the original landlord.
Appraisers must document both contract and market rent, then apply the market-derived GRM to the realistic income stream the property actually produces under current law. Understanding this dynamic early avoids surprise when the date-of-death value comes in lower than expected.
In many cases, keeping the stable tenant and modest cash flow is the path of least resistance—and still the highest and best use. Rents can be gradually raised each year until all units are in alignment with the rest of the market, provided increases comply with the annual cap and notice requirements; in Portland, certain increases trigger relocation assistance.
If you are an estate planning attorney, personal representative, or heir handling a 2–4 unit rental in Multnomah, Washington, Clackamas, Yamhill, Columbia, or Hood River counties, reach out. These scenarios are a routine part of my practice.
Sources & Further Reading
PortlandAppraisalBlog discussion on Oregon 2026 Rent Cap: Post
PortlandAppraisalBlog discussion on Oregon Rent Laws vs. Portland’s Tenant Protections: Post
Portland Housing Bureau Relocation Rules & Exemption Form: HOU-3.05
Oregon Law Help – Eviction & Termination Notices: Guide
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: How have the current rent control laws affected your portfolio?
CODA
Are you an agent in Portland and wonder why appraisers always do “x”?
A homeowner with questions about multifamily income properties, GRMs, or income calculations?
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.
Oregon vs Washington rent cap and relocation rules create sharply different risk profiles for 1–4 unit (conventional) and 5+ unit (commercial) investors in the Portland and Vancouver metro areas.
Via Wikimedia Commons
Why This Matters
In the Portland–Vancouver metro, rent regulations directly shape cash‑flow stability, refinance eligibility, and valuation. Appraisers rely on predictable rental streams for income approach comparables, while lenders model risk differently across state lines. For investors, the 4‑to‑5 unit threshold is pivotal: properties with 1–4 units typically qualify for conventional Fannie Mae/Freddie Mac financing, while 5+ unit buildings fall into commercial lending. Because rent‑cap rules and relocation‑assistance exposure diverge sharply at this threshold, understanding the cross‑border distinctions is critical before acquiring or refinancing multifamily assets.
No rent increase permitted during the first 12 months of tenancy
Cap: 7% + CPI (West Region), maximum 10% annually
Notice: 90‑day written notice required for any increase
Relocation assistance: applies only if landlord owns 5+ units statewide – One month’s rent paid to tenant for no‑cause terminations (ORS 90.427)
Exemption: units with certificates of occupancy issued within the prior 15 years
Portland City‑Specific Rules (PCC 30.01.085 – effective Jan 1, 2025)
Applies regardless of landlord unit count
Portland City‑Specific Rules (PCC 30.01.085 – effective Jan 1, 2025)
Applies regardless of landlord unit count
Any increase ≥5% in a rolling 12‑month period requires 90‑day notice
Increases ≥10% give tenants the right to terminate with reduced notice and receive mandatory relocation assistance – $2,900 studio/SRO – $3,300 1‑bed – $4,200 2‑bed – $4,500 3+ bed
Exemptions require advance approval from the Portland Housing Bureau (e.g., week‑to‑week tenancies, owner‑occupied duplexes)
Enforcement: non‑compliant landlords face liability for up to 3× monthly rent, damages, and attorney fees
Washington Statewide Stabilization (HB 1217 – signed May 2025)
No rent increase in the first 12 months
Cap: lower of 7% + CPI or 10% through Dec 31, 2025
Manufactured homes: 5% cap
Notice: 90 days for residential units; 180 days for mobile‑home parks
Relocation assistance: no statewide mandate (though RCW 59.18.440 allows local governments to adopt programs)
Exemptions: – New construction (<12 years old) – Nonprofit affordable housing – Owner‑occupied 2–4 plexes
Enforcement: Washington Attorney General; penalties up to $7,500 per violation. August 2025 saw inaugural fines against landlords for unlawful increases.
Key Investor Takeaways
1–4 unit owners: favorable treatment in both states; no mandatory relocation payments (except inside Portland city limits, where PCC 30.01.085 applies)
5+ unit owners: Oregon relocation exposure (one month’s rent on no‑cause moves); Portland relocation exposure even for small landlords if increases ≥10%; Washington no statewide relocation mandate, creating a material cash‑flow difference across the Columbia River
Comparison Table
Issue
Oregon Statewide
Portland (overlay)
Wash. HB 1217
Impact 1–4 Units
Impact 5+ Units
First-year increase allowed?
No
No
No
Same both states
Same both states
Rent cap (2025)
7% + CPI ≤10%
Same statewide cap
≤10% (5% Mobile/ Manufact. parks)
Effectively identical
Effectively identical
Relocation assistance required?
Only if landlord owns 5+ units
Yes on ≥10% increase or qualifying no-cause
None statewide
Portland exception
Oregon yes / WA no
New build exempt
15 years
Same
12 years
WA slightly shorter
WA slightly shorter
Owner-occupied 2–4 plex exempt?
No
Possible with PHB approval
Yes
WA more favorable
WA more favorable
Regional Implications for Appraisals
Both states prohibit first‑year increases and require ample notice, promoting predictability in rental streams.
Oregon’s relocation rules (especially Portland’s) stabilize occupancy in high‑turnover areas, dampening vacancy risk.
Washington’s broader exemptions favor newer developments, potentially accelerating value growth in Clark County compared to Oregon’s focus on small‑landlord relief.
Enforcement differences matter: Oregon emphasizes tenant remedies via damages, while Washington’s AG fines signal robust compliance.
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: Do you think other states will follow Oregon’s and Washington’s rent control laws?
CODA
Are you an agent in Portland and wonder why appraisers always do “x”?
A homeowner with questions about multifamily income properties, GRMs, or income calculations?
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.
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