Current through Register Vol. 63, No. 9, September 1, 2024
(1) The
Department's lending criteria allows the Fund to create quality development
patterns, produce a sound loan portfolio and create a sustainable loan
fund.
(2) 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:
(a) 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.
(b) A loan may be for an income-producing
project or for a project in an urban renewal district with available tax
increment financing.
(c) A loan may
be subordinate to other loans both in terms of payment and lien securing
repayment.
(3) The
Department may make the following types of loans:
(a) 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.
(b) 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.
(c) 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.
(d)
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.
(4) 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.
Stat. Auth.: ORS
458.705 -
458.740
Stats. Implemented: ORS
458.705 -
458.740
