Are Prepayment Penalties allowed on DSCR Loans in Oregon?

[Robin Simon]

Prepayment Penalty Rules for DSCR Loans in Oregon

Prepayment Penalties are Fully Allowed with Disclosure Requirements for DSCR Loans in Oregon. Oregon law restricts prepayment penalties only for consumer real estate loans, as outlined in ORS § 86A.195. This statute prohibits prepayment penalties only on loans for personal, family, or household purposes secured by real estate. DSCR Loans, which are used exclusively for business purpose, fall outside this restriction. Oregon does contain documentation requirement containing specific “notice to borrower” wording and requirement of at least 10-point bold or underlined font that DSCR Lenders in Oregon must follow when loans have prepayment penalty provisions included, however this does not restrict the ability for DSCR Loan programs in Oregon to offer all standard prepayment penalty options including Descending Prepay Penalties (i.e.“3/2/1”), Flat Prepay (i.e. 5/5/5/5/5) and California-Style (i.e. 6 Months Interest, 20% Freely Prepayable, 5 Year Duration) options.

FULL Complete 2026 Guide To DSCR Loan Prepayment Penalties

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