The Oregon property tax deferral program offers relief to eligible seniors and disabled citizens by allowing them to delay paying their property taxes, albeit with interest. A notable drawback has been the inability of program participants to retain their deferral status while pursuing a reverse mortgage on their property. However, this obstacle is about to change, thanks to HB 2587, signed into law by Governor Kate Brown, effective September 29, 2019. The new legislation permits individuals in the state’s tax deferral program, with at least 40 percent equity in their home at the time of filing, to pursue a reverse mortgage.

The Previous Rule and Its Transformation

This legislative shift marks a significant departure from the prior rule, which prohibited homeowners from simultaneously holding a reverse mortgage and participating in the Oregon property tax deferral program. Previously, homeowners faced a challenging choice between the two options, selecting whichever seemed more beneficial. With this policy change, some homeowners enrolled in the tax deferral program gain eligibility for a reverse mortgage.

Eligibility Criteria: Fine Print

However, it’s important to note that the new law does not establish a blanket eligibility for all reverse mortgage holders to enroll in the property tax deferral program, or vice versa. Instead, only specific circumstances and conditions apply. According to the Oregon Department of Revenue:

• Homeowners qualify for deferral if they were on deferral before 2011 with a reverse mortgage from the same period (grandfathering existing law).
• If a reverse mortgage was entered into between July 1, 2011, and January 1, 2017, homeowners need at least 40% equity at the time of deferral application.
• Homes with reverse mortgages initiated on or after January 1, 2017, do not qualify for Oregon property tax deferral.

Navigating the Changes in the Oregon Property Tax Deferral Program

The application process for deferral typically reopens early in the year, usually in January. Applicants are required to provide information about debt balances on their homes to verify eligibility. If a homeowner has a reverse mortgage that began between 2011 and 2016 and holds at least 40% equity, they may qualify for an Oregon property tax deferral.

Implications for Seniors and Retirement Planning

This legislative transformation will unlock new avenues for seniors who previously faced barriers in accessing their home equity for retirement funding. The change promises a more comfortable and enjoyable retirement for many Oregon seniors who are in Oregon property tax deferral, who can now leverage their home equity to enhance their quality of life.

At Northwest Reverse Mortgage, our mission is to extend seniors’ stay in their homes, promoting longer, more fulfilling lives. This new legislation aligns perfectly with our values, enabling us to help more seniors access their equity and alleviate financial burdens that often impede retirement enjoyment.