1. (1) The CDFI, on behalf of OHCS, shall provide guarantees of repayment of loans made to finance the construction, development, and/or rehabilitation of:

   1. (a) Housing for rental or ownership by persons with Moderate, Low and Very Low Income; or
   2. (b) The commercial component of a structure that contains both commercial property and housing for persons with Moderate, Low and Very Low Income.

2. (2) Organizational Eligibility - Any of the following (an "applicant") may apply to CDFI for a loan guarantee for a qualifying project under the Construction Loan Guarantee Program in the role of a developer, an owner or a lending institution for the project:

   1. (a) A for-profit business;
   2. (b) A local government entity including, but not limited to, a unit of local government (such as city or county) or a housing authority;
   3. (c) A not-for-profit organization, including but not limited to, a nonprofit community-based organization, a regional or statewide nonprofit entity, or a nonprofit corporation;
   4. (d) A Native American tribe; or
   5. (e) Any other entity specifically identified by OHCS as an eligible applicant in an application or award process with respect to the Loan Guarantee Program funds.

3. (3) Project Eligibility – To be considered eligible for a loan guarantee, projects must meet the following criteria:

   1. (a) No less than 50% of the units constructed, developed, or rehabilitated must be designated for Moderate, Low, or Very Low income individuals or families;
   2. (b) Affordability designations must remain on the property for a period of no less than 10 years or a period determined by CDFI and approved by OHCS or whichever is longer;

   3. (c) Properties with a commercial component are bound by the following requirements:

      1. (A) Commercial space cannot exceed 20% of the overall development budget for the project, as determined by OHCS underwriting; and
      2. (B) Commercial space must be restricted in scope through a land-use agreement to exclude business(es) that are incompatible with residential housing.
   4. (d) All projects must meet underwriting criteria as established and made easily accessible by CDFI and the participating lender.

4. (4) General Terms & Conditions of the Fund:

   1. (a) No guarantee shall be prepared or construed in such a manner as to violate provisions of Article XI, section 7, of the Oregon Constitution;
   2. (b) CDFI will not issue any loan guarantee that provides for the repayment of more than 50 percent of the original principal balance of any loan;
   3. (c) CDFI will issue any guarantee on a loan exceeding five-year terms;

   4. (d) To the greatest extent possible, the Loan Guarantee Program should prioritize projects that:

      1. (A) Further affordable housing investments in rural markets that lack market and appraisal data to support needed lending;
      2. (B) Provide access to lending to those small and culturally specific organizations that will benefit from the enhanced credit and risk mitigation a guarantee would provide;
      3. (C) Have the deepest affordability restrictions; or
      4. (D) Optimize efficiency of units per dollar guaranteed.
         

Statutory/Other Authority

HB 3395 (2023)

Statutes/Other Implemented

HB 3395 (2023) & ORS 456.270 – 456.295

History

OHCS 53-2024, adopt filed 12/30/2024, effective 01/01/2025
OHCS 25-2024, temporary adopt filed 07/31/2024, effective 08/01/2024 through 01/26/2025