Construction Loan Guarantee Program
The Construction Loan Guarantee Program is designed to support the development of rental and for-sale housing up to 120% AMI. The Oregon Legislature approved House Bill 3395 (2023) allocated $20MM to establish a fund to be used to guarantee the repayment of loans to finance the construction of housing subject to an affordable housing covenant for low- or moderate- income households. This legislative investment aims to support development in the current financial market. A summary of terms is outlined below. A detailed term sheet can be found here.
Eligible Loan Types
- Construction loan with first lien position
- Multifamily development
- Manufactured home parks
- Clusters of single-family homes (rental or for-sale)
Borrowers
- Nonprofit organizations
- Public ownership such as a local housing authority
- Federally recognized Tribal Governments
- For profit entities
- No less than 50% of the units at 120% of AMI or below. This will be documented with a 10-year deed restriction recorded on title.
- Maximum Guarantee term: 5 years. Guarantee will terminate upon payoff of the construction loan.
- Minimum Guarantee: $1MM
Maximum Guarantee: $5MM
- 90% for loans between $1MM and $3MM, and
- 85% for loans between $3MM and $5MM.
Affordability
Guarantee Scope
Fee Structure
- UW fee of $10,000.
- One time Guarantee fee of 1% of guaranteed amount.
- Annual Servicing Fee of up to 50 bps of the guaranteed amount.
Reporting
- Monthly construction monitoring by a third party, reports to be shared with NOAH.
- Review of monthly draw requests.
- Monthly updates during stabilization.
- Borrower and/or Guarantor financials provided on an annual basis.
- Documentation of households meeting affordability restrictions.
- No limit on construction loan amount.
- Interest reserve will be required.
Loan Requirements
For more information about the loan programs
Contact .(JavaScript must be enabled to view this email address), Director of Lending
