Chapter 20 Oregon Laws 2003

AN ACT

HB 2169

Relating to loan guarantees; amending ORS 458.630.

Be It Enacted by the People of the State of Oregon:

SECTION 1. ORS 458.630 is amended to read:

458.630. (1)(a) The Housing and Community Services Department shall hold and use the principal that is credited to the Housing Development and Guarantee Account under ORS 458.620 (3) [shall be held and used by the Housing and Community Services Department] as the Guarantee Fund. The department shall use the fund [shall be used] only to guarantee repayment of loans made to finance the construction, development, acquisition or rehabilitation of low income housing[.], of the commercial component of a structure that contains both commercial property and low income housing, or of both. The department, by rule, shall specify the grounds on which it may deny loan guarantees for a structure that contains both commercial and low income housing components. The grounds for denial specified by the department must include, but need not be limited to, a commercial component that is excessive in scope or that is designed for commercial activity of a type incompatible with residential housing. The State Housing Council shall review loans that are guaranteed by the fund [shall be reviewed by the State Housing Council] to [assure] ensure that [they] the loans meet prudent underwriting standards.

(b) A guarantee [shall] may not be prepared or construed in such a manner as to violate the provisions of section 7, Article XI of the Oregon Constitution.

(2) The department [shall] may not issue any loan guarantee under this section that guarantees the repayment of more than 25 percent of the original principal balance of any loan.

(3) [At no time shall] The department may not issue a loan guarantee if the guarantee would cause the aggregate dollar total of all loan guarantees issued by the department under this section to exceed two times the total amount then in the Guarantee Fund established under subsection (1) of this section. Whenever the fund principal [reaches a] decreases by five percent [loss] or more, the interest on the fund shall be deposited only to the principal account until the full amount of the fund principal is [realized] restored.

(4) In developing policy for loan guarantees under this section, the council shall give preference to loans for the construction, development, acquisition or rehabilitation of low income housing, or of structures containing both commercial and low income housing components, that would:

(a) Provide the greatest number of low income housing units constructed, acquired, developed or rehabilitated for the amount of guarantee allowed;

(b) [Insure] Ensure the longest possible use for the units as low income housing units. Pursuant to this end, the State Housing Council may adopt a formula [which] that optimizes the interests of the lender and the developer and the working life of the low income units; or

(c) Include a program of services for the occupants of the proposed housing including, but not limited to, programs that address home health care, mental health services, alcohol and drug treatment and post-treatment care, child care and case management.

[(5) The Guarantee Fund established under subsection (1) of this section shall be used to guarantee loans made to finance the construction, development, acquisition or rehabilitation of housing for low income households.]

(5) The council may adopt a policy that gives loan guarantee preference to loans for low income housing, or structures containing both commercial and low income housing components, for which the department has provided a grant, loan, tax credit or other investment.

Approved by the Governor March 25, 2003

Filed in the office of Secretary of State March 25, 2003

Effective date January 1, 2004

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