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Oregon Housing and Community Services

Predevelopment funding

Recognizing the need to support affordable housing developments before they can obtain all necessary funding sources and start construction, OHCS created the Predevelopment program in 2024. Two loans fall under predevelopment:

  • Project Feasibility Loan
  • Predevelopment Loan

The purpose of the predevelopment programs is to support smaller, nonprofit, rural, and/or culturally specific developers in addressing costs associated with getting a housing project ready for development. These organizations often face barriers to developing affordable housing in their communities because of high upfront costs to get a project started to apply for funding.

Background

The Project Feasibility Loan Program (PFLP) assists eligible organizations in Oregon with early costs that may occur when trying to figure out if an affordable housing development project is feasible. The goal is help reduce risks associated with getting a housing project development ready. Many nonprofit, often culturally specific developers, have cited costs for determining if a prospective building site meets multifamily housing conditions as a barrier to developing affordable housing.

The Predevelopment Loan Program (PDLP) is to have a funding resource available for nonprofit and/or culturally specific developers who have historically faced barriers to accessing housing development resources due to high costs and smaller organizational capacity. These organizations often have less resources, staff, and subject matter expertise to get development projects ready in order to apply for funding. PDLP offers a resource for these organizations to address these barriers.

PDLP applicants may also pair this loan with Land Acquisition Program funds or funds for predevelopment activities through a Community Development Finance Institution (CDFI). Those working with a CDFI can initiative a collaborative loan process through OHCS or through the CDFI partner. All predevelopment loans must be repaid but loan forgiveness will be available on a case-by-case basis. 

Community-based Agricultural Worker Housing Predevelopment Grants - $2.5 million: Nonprofit organizations that specialize in providing community-based housing to agricultural workers are also eligible to receive predevelopment funds in the form of a grant rather than a loan. 

PreDev Recipient List (Updated as of 12/10/2024)

Program
  
Amount
  
  
$600,000
  
$5,692,266
  
$1,258,659

Eligible entities

Project Feasibility loan

This loan is only available to small organizations whose average annual budget is less than $5 million over last three years.  In addition, they must match one of the following criteria:

  1. Culturally specific organization
  2. Nonprofit, rural developer
  3. Federally recognized Tribal Nations in Oregon

Predevelopment loan

  1. Nonprofit organizations
  2. Housing authorities
  3. Federally recognized Tribal Nations in Oregon

Eligible loan uses

Project Feasibility loan

  • Architectural and engineering services
  • Costs associated with gaining site control
  • Costs of survey
  • Environmental testing and appraisals
  • Financial modeling
  • Financing and zoning applications fees
  • Historical certifications and analysis
  • Initial feasibility and market study
  • Administrative costs associated with these uses

Predevelopment loan

Currently, loans will be offered at a 3% interest rate with payments deferred until closing of capital financing.

  • Professional services – architectural, legal, engineering.
  • Studies – market, environmental, traffic, land, zoning, Geotech, arborists, capital needs
  • Fees – entitlement, permits, application
  • Community engagement efforts
  • Other costs that can be directly connected to getting a specific development project to OHCS’s readiness standard, as approved by OHCS



How to apply

Predevelopment program loans are made available through the Oregon Centralized Application intake form on a rolling basis as funding is available. Predevelopment applicants will need to request credentials for a Procorem Workcenter via the OHCS. 

ORCA Predevelopment Loan Programs Intake Form

If you are eligible for a predevelopment program loan, there may be additional forms you are asked to fill out.

For information, contact Fatima Weir at Fatima.Weir@hcs.oregon.gov.
Download the Predevelopment Manual

Predevelopment FAQs

OHCS’ Predevelopment Loan Program provides two loan products for projects in the development pipeline that have met the requirements of the Intake Form. A project feasibility loan (PFLP) has a maximum of $50,000. The predevelopment loan (PDLP) has $750,000 maximum.

There is also a new resource called the Agricultural Workforce Capital Predevelopment Grant for projects that have agriculture workforce housing that can be accessed along with the predevelopment loan. The grant eligibility is limited to projects serving agricultural workers.

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Loans that result in confirmation of land suitability will require repayment upon reaching one of these milestones:

  • If the loan recipient has or had site control on the property
  • Disposition (sale) of the property site
  • At financial closing for project construction
  • Five years after the feasibility study or similar have been completed
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Loans that result in a determination that the property is not suitable for multi-housing development or that would require an additional investment beyond normal development costs (for that area) may be forgiven with OHCS approval provided acceptable documentation is provided.

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If an applicant incurred predevelopment costs up to one year prior to application, including design and other eligible predevelopment activities, can be eligible for reimbursement when the predevelopment loan is approved.

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This is annual. An organization is considered "small" under the PFLP if its average annual budget over the past three years has been $5 million or less, as verified by audited financial statements, Form 990s, or any other OHCS-approved method.

​If the annual budget over that period of time does not exceed $5 million, the organization is an ideal candidate for the PFLP resource.

The predevelopment funds are recycled once loans are repaid, allowing new projects to be funded as resources become available again.

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Predevelopment funding does not guarantee future OHCS funding. However, if an applicant receives funding through the ORCA process for the construction and permanent financing, the predevelopment loan must be repaid.

Since it is a revolving loan fund, once a predevelopment loan is allocated to a specific project, the funds are earmarked for that project. Upon financial closing of the project, the predevelopment loan is then repaid.

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To ensure equitable distribution of limited funds, OHCS will limit partners to having two open PFLP or PDLP loans at a time. This includes two active predevelopment loans in the ORCA Predevelopment Loan Program Intake process, but only one can be approved or drawn at a time. Once a Commitment Letter (CL) is issued for one loan, the second loan may be submitted for approval by the Finance Committee, provided the first loan is signed before proceeding with the approval of the second. To access additional PFLP or PDLP funds, any open loans must be repaid or have forgiveness approval from OHCS.​

​Yes, this does count toward the two PFLP or PDLP loans. However, the sponsor is allowed to draw down on a PFLP or PDLP loan simultaneously with a ​Community-based Agricultural Worker Housing Predevelopment Grant, as long as they are separate projects.​​