Oregon offers below-market loans for mixed-income housing

The Housing and Community Services Department must run a program offering short-term loans below market rates for mixed-income housing. Mixed-income housing is multifamily housing with both homes available at market value and homes restricted for lower-income households. Department rules must set who qualifies, loan rates and terms, the share of homes restricted for lower-income households, and how long those homes stay affordable. Loans must be behind private loans on the property unless the private lender agrees otherwise. The department must adopt its initial program rules by January 1, 2027.

The law establishes a fund for the loan program and transfers $20 million into it from the Housing Project Revolving Loan Fund. The fund supports the department’s mixed-income housing loan program. The fund may also receive loan payments, state money, bond proceeds, and money from other sources. Fund money is available to the department to carry out the loan program. The transfer takes effect when the act takes effect, on the 91st day after the 2026 regular session adjourns.

For housing projects it finances, the department may finance only projects that include at least one home rented to a household earning below 120 percent of the area median income. This rule applies to housing projects the department finances, including projects with both market-value and affordable homes. The department must adopt a rule for assigning shared costs, including infrastructure and parking, to the affordable housing portion. With council approval, the department may set income limits, and the council may set a minimum number or share of qualifying homes.