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Bill would expand affordable housing tax credit to mortgage funds, preservation projects
Summary
House Bill 3236 would expand the Oregon Affordable Housing Tax Credit (OHTC) definitions to include qualified mortgage loan funds and allow use of the credit for preservation/rehabilitation of distressed affordable properties, witnesses told the Revenue Committee during a May 6 hearing.
House Committee on Revenue members heard public testimony May 6 on House Bill 3236, which seeks to expand the state’s Oregon Affordable Housing Tax Credit (OHTC) to allow its use with qualified mortgage loan funds and to permit OHCS to allocate the credit to preserve or rehabilitate severely distressed multifamily properties occupied by households at or below 80% of area median income.
Bill sponsors and witnesses told the committee the change would give the OHTC new flexibility without adding a new direct appropriation. Bill Van Vliette, executive director of NOAH (Network for Oregon Affordable Housing), said the credit currently lowers interest rates on loans for affordable housing and that expanding eligibility to mortgage funds — such as community land trust (CLT) shared-appreciation models — would deepen affordability for first-time homebuyers by lowering interest costs.
“An amplify mortgage with the OHTC would drop further to 2.95%,” Van Vliette said, describing example interest-rate scenarios included in his submitted handout. Karen Saxon of DevNW and Cameron Harrington of Oregon Housing Alliance also testified in favor, saying the change would expand affordable homeownership tools and allow nonprofit owners to refinance operations at lower interest rates to protect tenants as operating costs have risen.
Witnesses described a preservation need across the state: rising insurance, utility and other costs have squeezed operating cash flow at some affordable properties, and allowing the tax credit to be applied for preservation refinancing could improve monthly operating positions and reduce the need for new direct subsidy. Jacob Fox of Homes for Good cited a local example where a tax-credit portfolio moved from $300,000 positive cash flow in 2019 to an $800,000 subsidy requirement in the current fiscal year.
Committee members asked about the existing $35 million cap on credits and whether expanding eligibility could exhaust the remaining allocation; witnesses and staff said Oregon Housing has used about half the cap but has a large pipeline and recommended further staff analysis to determine capacity.
No committee action was taken; the hearing record remains open for additional materials and follow-up analysis by staff and Oregon Housing and Community Services.
