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The City of Portland, Oregon

Portland Housing Bureau

Solving the unmet housing needs of the people of Portland.

Phone: 503-823-2375

fax: 503-823-2387

1900 SW 4th Avenue, Suite 7007, Portland, OR 97201

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Cash Flow Share Loan


A Cash Flow Share Loan (CFS) provides public funding to fund development costs for new or existing affordable rental or mixed-use projects, or projects for economic development activities directly related to affordable housing.  A CFS is intended to fund the difference between the projected project costs and available sources of construction and permanent financing, including Housing Development Subordinate Loans (HDSL).


A CFS provides construction and/or bridge financing, that either partially or fully converts to permanent financing and is designed to work in conjunction with other public and private financing sources. A CFS is a financing product used only when other financing has been maximized and the housing project does not generate sufficient cash flow (after operating expenses including required replacement reserves and required senior debt service) to allow regular amortized payments to PHB. 

The following summary outlines the general product characteristics available to Project Sponsors.  For the CFS, the same general financing terms apply to the construction, bridge and permanent phases of financing.  A more detailed description of terms specific to the CFS is outlined in the Product Specific Guidelines section below. 


Funding for this loan may be through tax increment financing (TIF), other city or federal funds.  Borrower shall comply with any and all requirements related to the funding source.  For example, TIF funds must be used for infrastructure and physical improvements (including tenant improvements) of real estate projects within an Urban Renewal Area.  Federal and other city funds come with their own fund-specific restrictions and obligations.


Maximum Amount:  No maximum amount. Based on Ordinance No. 183826 passed by City Council on May 26, 2010, PHB Director may approve up to $2 million; Commissioner in Charge approval is required up to $3 million; City Council must approve amounts in excess of $3 million.

Interest Rate:  Up to 3%. The interest rate is determined by specific project requirements and subject to PHB approval. The Housing Investment Committee (HIC) may recommend an interest rate in excess of 3% if market conditions warrant.


  • Construction/Bridge Period: up to 24 months
  • Permanent Financing Period: Set term up to 60 years based on underwriting; due on unapproved sale, transfer, change of use or refinance.

Repayment: Scheduled payments based on cash flow until repaid as per term.  Project Sponsor pays PHB 50% of Excess Cash Flow (see below). 
Debt Coverage Ratio (DCR): Minimum 1.25[1] in Year 1



Project Sponsors who meet all of the following criteria may be eligible to receive a CFS:



  1. The Project Sponsor may be either for profit or nonprofit.
  2. The Project Sponsor must own the subject property or have site control.
  3. Other financing sources for the project, including primary debt and an HDSL, must be maximized.
  4. Designated Affordable Units must be affordable for 60 years (as required by Title 30 of the City Code).


Note: PHB funds are limited. PHB may not be able to provide loans to all eligible projects.


Eligible Project Sponsors: A For Profit or Eligible Non-Profit with ownership or site control of land or a rental property may apply for a CFS. 

Eligible Projects: A project providing rental housing or community facility directly related to housing that furthers the goals and objectives in Portland’s Comprehensive Housing Plan, Consolidated Plan, Urban Renewal Area plans or other applicable policy directives is eligible for a CFS.

Interest Rate: Interest rates during the construction and permanent loan periods are set up to 3%.  In cases where PHB is providing a portion of the loan funds through a credit facility with a private lender or other government entity, the Project Sponsor may receive an interest rate based on PHB's cost of funds and/or the ability of the project to repay debt.

Participating Financing: Project Sponsors must seek maximum participating financing on the best terms available.  Interest rates for superior loans should be at the current market rate or better for the financing type.  Generally, the combined debt coverage ratio for all participating financing (other than PHB financing) should be no greater than 1.25 to 1.00 in Year 1 for superior loans.  The combined loan to value ratio (LTV) for all senior financing will be evaluated by PHB in order to determine that leverage has been maximized for the project.  PHB reserves the right to condition its funding upon the terms of the external debt to prevent overleveraging. PHB evaluates bond-financed projects against current bond underwriting requirements.  In addition, projects must utilize the maximum HDSL supportable by the project prior to qualifying for a CFS.

CFS Recapture Provisions: The provisions for recapture in the CFS Note include the following two methods of repayment: 

  1. Unapproved sale, Transfer, Refinance, Exchange or Change of Use
  2. Cash Flow Payment Requirement as described in loan documents.

Security/Collateral: A Cash Flow Share note is subject to a recorded Trust Deed and does constitute a lien against the property.


[1] May increase depending on project specific risk factors