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County staff explain foreclosure risk on restrictive covenant in Foundation for Affordable Housing transaction
Summary
County property management staff told commissioners that the county’s affordable‑housing restrictive covenant would be extinguished if a lender forecloses on the property; staff said the county offered the parcel at a discount and the buyer plans 10 veteran units.
County property management staff briefed the board on a proposed transaction with the Foundation for Affordable Housing and clarified how a restrictive covenant would behave if a lender foreclosed on the property.
Christy Bollinger, Deschutes County property manager, told commissioners the county’s current restriction on the parcel is six years; she said that restriction would be extinguished if a lender foreclosed on the project and that the county and legal staff have reviewed that risk. Bollinger added the county’s restriction mirrors a 60‑year restriction used by Oregon Housing and Community Services.
Chair and commissioners discussed whether the covenant duration met the foundation’s concerns. Bollinger and county legal staff said the foreclosure caveat was the primary issue and that the parties had worked through the language. Commissioners also noted the county offered the parcel at a discount — the transcript shows an offer of $500,000 against a 2022‑23 appraised value of about $723,000 — and that the foundation’s plan adds 10 units reserved for veterans.
No formal board vote was recorded on the covenant language during the meeting; staff said they will return with finalized documents as needed.
