OAR 813-140-0090
Lending Criteria


The Department’s lending criteria allows the Fund to create quality development patterns, produce a sound loan portfolio and create a sustainable loan fund.


The Department shall permit the assumption of an appropriate level of risk, maintain a reserve for losses, and provide for the periodic monitoring of reserve adequacy as follows:


An applicant for a loan shall demonstrate an ability to repay the debt through forma and other documentation submitted with the application. When applicable, the Department may offer a combination of grants and loans as well as a combination of loan products and terms, as it, in its sole discretion, deems appropriate to ensure repayment.


A loan may be for an income-producing project or for a project in an urban renewal district with available tax increment financing.


A loan may be subordinate to other loans both in terms of payment and lien securing repayment.


The Department may make the following types of loans:


Predevelopment loans for projects that are in the early stage. The purpose of these loans is to finance eligible predevelopment expenses such as architectural, engineering, environmental studies, purchase of options or other eligible expenses as determined by the department. A predevelopment loan shall have maximum term of 12 months and shall be 100% secured by collateral acceptable to the Department. The borrower shall pay a loan fee of 1% of the principal amount of the loan for the regular, or “large” Community Incentive Fund. There is no fee for Small Community Incentive Fund pre-development loan borrowers.


Short-term loans having terms not to exceed 5 years. These loans shall accrue interest at the rate of 1% per annum for the “large’ program and 3% for the Small Community Incentive Fund program. Both shall require minimum annual interest payments.


The “large” Community Incentive Fund can offer long-term loans having terms exceeding 5 years, but not exceeding 15 years. These loans shall accrue interest at a rate of 3% per annum and shall require minimum annual interest payments. The Small Community Incentive Fund does not offer long-term loans.


For existing owners remaining in the program, the Housing Preservation Community Incentive Fund can offer 2 percent interest loans with a maximum term of 20 years. Other loans will be at an interest rate and term determined by the Department through project underwriting to best meet the financial viability of the project.


A borrower shall execute such agreements, instruments and other documents that are required by the Department and that are in form and substance satisfactory to the Department. These documents may contain terms and provisions regarding required insurance coverage, loss reserve and periodic reporting requirement, financial ratios, escrow payments, late charges, defaults, priority of liens, and such other matters as the Department deems prudent or appropriate.
Last Updated

Jun. 8, 2021

Rule 813-140-0090’s source at or​.us