Oregon Housing and Community Services Launches Permanent Loan Program

Oregon Housing and Community Services (OHCS) just launched its Permanent Loan Program, a new and improved 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.

“If you were to ask most people across the country what their top concerns are, most would define them by the cost of living,” said OHCS Executive Director Andrea Bell. “For too many, it’s keeping them up at night – a home they can afford alongside groceries, gas, and childcare. This program is another way we deliver advanced housing solutions that help make life better.”

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.

"There are some good loan products with intentional lenders out there, but it's just not enough at this moment. Interest rates remain high and more capital in the system is needed. When the market cannot support affordable housing access for everyone, public funders have a responsibility to step up and step in,” comments Northwest Housing Alternatives Executive Director, Trell Anderson. “This principle is at the heart of gap financing and applies broadly across affordable housing development and asset management.”

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.

“As President Trump continues to cut services and makes daily needs less affordable, my administration is prioritizing increasing housing production and expanding ways to finance new housing for Oregonians in every corner of the state,” Gov. Tina Kotek said. “Too many families view stable housing as out of reach—I’m working to change that.”

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.