Oregon New "Flex" Home Loan Program Delays: A Year Later Negotiations Continue with Idaho Housing Agency to Service Loans.

Oregon Housing and Community Services has been talking about replacing the long running Oregon Bond SF loan program for a long time. An October 2020 meeting packet (PDF pages 12-20) for the Oregon Housing Stability Council had some background about the planned program. Some outtakes from the briefing materials:

"Lastly, though final terms of the DPA program are subject to negotiation with the future master servicer, our plan is for low income borrowers with an Area Median Income of 80% and below to have a forgivable DPA [DOWN PAYMENT ASSISTANCE] in the form of a silent second mortgage that has no payment and no interest rate. 

We have engaged our hedge provider, our master servicer should be boarded in the first part of 2021, we are in the process of finalizing our lender application and anticipate offering the program near the beginning of Q2-2021."

Earlier this year OHCS indicated that it would NOT be seeking additional private activity bond cap for the SF bond program because of the demand for bond cap for rental projects. OHCS continues to make loans under the SF bond program using existing allocated bond cap. The current Oregon SF bond rates are: 

Rate Advantage, 4.375% and Cash Advantage [WITH Down payment Assistance] 5.625%.

A snip from a recent Housing Stability Council meeting package shows that only 434 OHCS SF bond loans were made during CY 2021 even though rates were as low as 2.25%; in 2019 1,029 Oregon bond loans were originated. 

I recently inquired about the status after noting that the RFP for a servicer of flex loans had closed a year ago in April and an June 1, 2021 notice had been posted subsequently showing the intent to award, subject to negotiations, with the Idaho Housing and Finance Association. (IDHFA services SF loans for several other loans including Washington State).

The answer I received was that

"We are working to determine a timeline, but at this moment do not have a date to share with the public". and "this is a longer than typical timeline, however, the project is not only a format and structure that is new to OHCS, but also substantially more complex as well, we are working on this diligently."

I suspect that the topic could come up at the Friday May 6th meeting of the Oregon Housing Stability Council.

Originally created and posted on the Oregon Housing Blog.