Oregon Housing and Community Services Launches Permanent Loan Program

Oregon Housing and Community Services (OHCS) launched its Permanent Loan Program, a new financing tool designed to help affordable housing developments move from construction to completion. By offering competitive, fixed-rate loans, the program fills a critical financing gap, helping developers advance affordable housing projects more efficiently and deliver more homes across Oregon faster.

Permanent loans are a unique and mission-driven financing tool, offering fixed-rate, first-lien permanent mortgages for affordable housing at lower interest rates and more flexible terms. Unlike construction financing, these loans fund long-term mortgages with proceeds from tax-exempt bonds once a property is stable and operational. The program includes two products: Elderly and Disabled (E&D) bonds, which serve older adults and people with disabilities, and Department of Housing and Urban Development (HUD) Risk Share, which supports households with low incomes.

The launch of this reimagined program, which provides direct loans from the state, marks the first time in almost two decades the agency will directly finance long-term mortgages for affordable rental housing development. The program represents the governor’s broader effort to pursue innovative financing solutions and strengthen the state’s ability to address Oregon’s housing needs amid an uncertain federal landscape.

OHCS previously issued $589 million in E&D bonds, supporting 355 developments and more than 7,000 units before pausing permanent lending around 2007 due to market conditions and low interest rates. With growing financing gaps in the market and new legislative direction via Senate Bill 684 (2025), the agency has modernized the program by aligning charges with conduits, enhancing underwriting, and forming a specialized credit committee.

With fixed interest rates lower than comparable private alternatives, the permanent loan program lowers financing costs and boosts project feasibility. By offering flexible prepayment options and allowing mixed-income units, OHCS aims to streamline capital financing for affordable rental housing development and is designed to adapt alongside market shifts.

Watch this video to see how Oregon is meeting this moment by increasing access to affordable housing through programs including the Permanent Loan Program.

Oregon Housing and Community Services Launches Permanent Loan Program

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