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Oregon HB 4037: Proposed Adjustments to the Affordable Housing Revolving Loan Program

Hey there, fellow Oregon landlords, property managers, and real estate investors. Christian Bryant here from the Portland Area Rental Owners Association (PAROA). As the 2026 legislative session gets rolling, House Bill 4037 is one of the early introductions focused on housing. Titled "Relating to housing; prescribing an effective date," this bill aims to adjust certain terms of an existing revolving loan program that helps cities and counties fund affordable housing projects.


Mr Portland Landlord reports this article

Introduced in late January 2026 at the request of the House Interim Committee on Housing and Homelessness for Representative Pam Marsh, HB 4037 is currently at the House Desk awaiting first reading. No committee referral yet, no amendments, and no hearings scheduled—it's in the very early stages. The full introduced text is available on the Oregon Legislative Information System (OLIS), and the catchline puts it plainly: the bill adjusts certain terms of the revolving loan program for cities and counties to fund affordable housing projects.


Official examining documents for affordable housing loans in Oregon setting.
Local governments and the Oregon affordable housing revolving loan program: Potential changes ahead with HB 4037.

This isn't creating a new program from scratch. Oregon already has mechanisms to support local governments in building or preserving affordable housing, often through low-interest loans or grants from state sources like the Oregon Housing and Community Services (OHCS) department. Revolving loan funds work by providing upfront capital that gets repaid over time, allowing the money to be lent out again—kind of like a perpetual motion machine for housing funding, minus the physics violations. The exact program targeted here appears tied to existing statutory frameworks that enable cities and counties to borrow for projects meeting affordability criteria, such as units restricted to lower-income households.


While the precise adjustments aren't detailed in expansive summaries yet (the bill text is concise), the intent is to tweak terms—potentially things like interest rates, repayment schedules, eligibility requirements, loan amounts, or project types. These changes could make the program more flexible or attractive for local governments to use. For context, similar programs in Oregon have historically funded multifamily developments, preservation of existing affordable units, or infrastructure tied to housing. If HB 4037 eases terms, it could encourage more borrowing and more projects getting off the ground.


Let's talk about what this could mean if the bill passes in something close to its introduced form. Impacts would largely be indirect for private-sector landlords, investors, and developers, since the program funds public or nonprofit-led affordable housing initiatives rather than market-rate rentals. But housing policy ripples affect everyone in the ecosystem.

For landlords and property managers with market-rate rentals: More funded affordable projects could increase overall housing supply over time, which might help ease pressure on rents in tight markets like Portland, Bend, or Eugene. On the flip side, if a surge of below-market units enters your submarket, it could draw tenants away from market-rate properties, potentially increasing vacancies or slowing rent growth. Think of a new 100-unit affordable complex opening nearby—your moderate-income applicants might qualify there instead, leaving you fishing in a smaller pool.


For real estate investors: Expanded loan access for locals could accelerate affordable development on land that might otherwise go to market-rate projects. In opportunity zones or high-demand areas, this might limit sites available for private investment or alter neighborhood dynamics. Investors in existing rentals could see stabilized or softer rent trends if supply ramps up meaningfully. Positively, more housing overall supports economic growth, which benefits occupancy rates long-term.


For developers, especially those working on mixed-income or affordable projects: Friendlier loan terms could open partnership opportunities with cities or counties. If you're a developer experienced with low-income housing tax credits (LIHTC) or similar, this might complement federal and state tools, making projects more feasible. Pure market-rate developers might face stiffer competition for subsidies or land if public entities prioritize affordable builds. In rural or smaller markets, where local governments rely heavily on such funds, changes could shift development pace.


Broader implications for investment property owners: Oregon's housing shortage is no secret, and programs like this aim to chip away at it on the affordable end. If adjustments lead to more units (say, by lowering borrowing costs or extending repayment periods), it contributes to supply—something private providers have been calling for. However, revolving funds are limited, so directing more toward regulated affordable housing doesn't directly help unsubsidized rentals. And let's be real: building affordable units often comes with strings—density bonuses, inclusionary requirements, or long-term restrictions—that can complicate private deals.


Oregon city with affordable housing construction and revolving loan funding symbols.
How adjustments to the Oregon affordable housing revolving loan program could boost local projects.

Common scenarios to consider:

  • A county borrows under improved terms to preserve an aging apartment complex as affordable. Result: Fewer naturally expiring affordable units hitting the market-rate pool, keeping upward pressure on rents elsewhere.

  • A city funds new construction in a growing suburb. If terms are more generous, projects move faster, adding supply sooner—but possibly with income restrictions that don't help middle-income renters.

  • Economic downturn hits: Easier loan terms could help locals maintain projects, stabilizing neighborhoods where your investments are.


Best-practice tips amid potential changes:

  • Stay looped into local planning processes. Cities and counties often announce funding pursuits—attend council meetings or subscribe to alerts to anticipate new projects.

  • Diversify your portfolio. If affordable supply increases in certain areas, consider markets with less public funding focus.

  • Explore partnerships. Some developers team with nonprofits or locals on mixed-use projects leveraging these funds.

  • Monitor OHCS reports on housing production; they track how state funds translate to units.


This bill ties into ongoing efforts to address Oregon's affordability crisis through public financing tools. Representative Pam Marsh has long championed housing access initiatives, and introducing this at the committee's request reflects priorities around expanding affordable options. Whether these adjustments ultimately boost production enough to move the needle statewide remains to be seen—past programs have helped but haven't fully closed the gap.


As always, early-stage bills can evolve. Tweaks in committee might clarify or expand the changes, add funding, or narrow scope.


Call to Action HB 4037 is just starting its journey—your input now can help shape it.





Let them know how changes to public affordable housing funding might affect private rental providers, supply dynamics, and investment decisions. Balanced perspectives from the ground level make a difference.


We're all in this housing puzzle together—stay informed, and reach out to PAROA with questions.


Sources:

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Portland Area Rental Owners Association

12725 SW Millikan Way
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