The Maggie Gibson Plaza in the Alberta Arts District in Portland, OR.

HUD Section 108 Loan Fund

HUD Section 108 Funds Success in Portland, OR

Portland, Oregon, combines the excitement and energy of an urban center with the easygoing charm of a small town.  A decade ago, however, sections of Portland's urban core were suffering from disinvestment, vacancy and crime.

The City of Portland's Bureau of Housing and Community Development (BHCD) saw an opportunity to breathe new life into two distressed areas:  Historic Mississippi Avenue and the Alberta Arts District on NE Alberta Street.  John Finke, NDC's West Team leader worked closely with BHCD officials to craft a creative solution to meet the City's needs.

A loan fund was established combining $8.0 million in HUD Section 108 Loan Guarantee Program funds with a $2.25 million Economic Development Initiative (EDI) grant to support new investment in the targeted areas.  These funds enable the City to write down the interest rate of each loan and to establish a loan loss reserve.  To date, six loans have been made along the two corridors and none of the borrowers have needed to tap into the loan loss reserve funds.

The loan fund provided just the boost local business owners and investors needed to bring new business and affordable and market rate housing to both neighborhoods.  Projects range from a 74-unit senior housing development with 5,000 square feet of ground floor commercial space to rehabilitation of a vacant building creating over 6,000 square feet of ground floor commercial space and nine units of affordable housing on the second floor.

Today both areas are thriving communities with significant local business investment and a strong residential core.  The BHCD creatively combined Federal funds to catalyze investment in two Portland communities, simultaneously creating new economic development opportunities and affordable housing while staying true to the sustainable planning approach that makes Portland such a unique city.