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

Affordability

• 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.

Guarantee Scope

• 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.

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.

Loan Requirements

• No limit on construction loan amount.
• Interest reserve will be required.

For more information about the loan programs

Contact .(JavaScript must be enabled to view this email address), Director of Lending