Oregon has launched a new initiative aimed at unlocking financing for affordable housing projects by reducing risk for lenders and improving loan access for developers.
Oregon Housing and Community Services (OHCS) and the Network for Oregon Affordable Housing (NOAH) announced the rollout of the Construction Loan Guarantee (CLG) Program, a statewide effort designed to help builders secure construction financing for homes serving low- and moderate-income residents. The program provides financial backing to lenders, giving them greater confidence to support projects that might otherwise struggle to obtain funding.
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“This program is a critical step toward addressing Oregon’s housing shortage,” said OHCS Executive Director Andrea Bell. “The goal of this program and partnership is to concretely reduce barriers for lenders and developers, making way to get more homes built across Oregon.”
The Oregon Legislature set the stage for the program in 2023 by allocating $20 million to OHCS to create the guarantee fund. After a competitive request for proposals process, the agency selected NOAH to administer the initiative and work directly with lenders and developers.
Eligible developments include a wide range of housing types, such as single-family homes, manufactured home communities, and multifamily rental projects. By broadening the scope beyond large apartment complexes, officials hope the program will reach smaller builders and rural markets that often face the greatest financing hurdles.
“NOAH is excited to be launching this Construction Loan Guarantee Program. It is designed to give lenders more confidence to invest and help projects secure better terms to ensure more affordable housing units can be developed,” said NOAH’s Deputy Director and Director of Lending Ann Remmers. “We’re especially hopeful about the impact this will have on smaller developments and rural communities, supporting both rental homes and homeownership. We encourage developers and lenders to reach out.”
Housing advocates say rising interest rates, volatile material prices and lingering supply chain disruptions have made lenders more cautious about backing affordable developments. The CLG program seeks to offset those concerns by providing an added layer of security before construction even begins.
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By providing lenders with extra financial security up front, CLG increases their ability to make loans to projects. These loans make developing affordable housing easier, creating more certainty in the face of unpredictable factors like interest rates, material costs, or supply chain issues.
Officials believe the guarantee structure will help projects secure more favorable loan terms, lowering overall development costs and ultimately translating into more affordable rents and purchase prices for Oregonians.
Developers and lenders interested in participating can find program requirements and application information on the NOAH CLG webpage.
OHCS is Oregon’s housing finance agency. The state agency provides financial and program support to create and preserve opportunities for quality, affordable housing for Oregonians of low and moderate income. OHCS administers programs that provide housing stabilization. OHCS delivers these programs primarily through grants, contracts, and loan agreements with local partners and community-based providers. For more information, please visit: oregon.gov/ohcs.
The Network for Oregon Affordable Housing (NOAH) is a nonprofit community development financial institution (CDFI) that provides financing for the development and preservation of affordable housing throughout Oregon. Formed in 1990 to increase the supply of safe, healthy, and stable housing, NOAH now administers over $400 million of loan capital through a growing array of loan programs to support the preservation and development of new affordable housing.
Originally reported by My Central Oregon.
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