Middle-Income Housing Construction Financing
Middle-Income Housing Developers: our Middle-Income Housing Construction loans provide flexible capital of up to $5,000,000 per project to support the construction of new multifamily rental housing in Portland.
Contact: lending@prosperportland.us
Apply by Monday, May 4 for first consideration.
Filling the Gap
In collaboration with Mayor Wilson’s office, Prosper Portland has allocated $9.5 million to provide gap financing to experienced developers for the construction of new multifamily rental housing projects of 20 units or more that are dedicated to serving middle-income households in Portland.
We encourage applications from development-ready projects located in areas where workforce housing demand is strong that will expand housing opportunities near jobs and transportation and contribute positively to the surrounding community.
To be considered for funding through this program, you must submit a complete loan application request, and your requested financing terms must comply with Prosper Portland’s Middle-income Housing Construction Loan Product Guidelines (see below). Funds are limited, the first review of applications will begin on Monday, May 4, 2026.
Photos: Shortstack Mississippi, Joshua James Huff Photography
Middle-income Housing Construction Loan Product Guidelines
- Strategic Alignment – The proposed project must be in alignment with the City of Portland’s Advance Portland Plan.
- Eligible Project Locations – Within the City of Portland boundaries.
- Eligible Applicant – The legal entity owner of the real property where the proposed project will take place, or the legal entity holding a long-term leasehold in the real property where the proposed project will take place.
- Minimum Credit Standards – The borrower (and any individual owner of the borrowing entity) must be current and in good standing on all revolving and installment debt; must have no delinquent or unpaid taxes, collections or charge-offs or repossessions within the past give (5) years; may not be, or have filed for bankruptcy in the past three (3) years; and must provide satisfactory explanation for any derogatory credit information within the past three (3) years.
- Eligible Project – Shovel ready, new construction multifamily rental housing projects that will produce 20 or more units of housing affordable to households between 80-120 percent of area median income.
- Use of Funds – Construction costs associated with the development of the multifamily housing project.
- Minimum Loan Amount – $250,000
- Maximum Loan Amount – $5,000,000
- Interest Rate Index – 3 or 5-year Treasury Note Yield, depending upon the final term of the loan.
- Interest Rate Margin – The interest rate will be determined at underwriting as the sum of the Interest Rate Index and a risk-adjusted margin, subject to a minimum all-in rate of 4.00%. The rate will remain fixed for the term of the loan. For pro forma purposes, assume a margin of 3.50% in addition to the applicable Interest Rate Index.
- Origination Fee – 2.00% of the loan amount.
- Term of Loan – Up to 60 months.
- Payments – Interest only payments due monthly, an interest reserve will be established at closing to carry interest cost through stabilization, with a ballon payment of all unpaid principal and interest due at maturity.
- Collateral – Deed of trust, assignment of rents, and security agreement recorded against the subject real property. Additionally, an assignment of architectural, engineering, and construction contract(s).
- Personal Guaranty – Guaranties from all individual or entities with 20% or more in equity in the borrower.
- Minimum Debt Service Coverage Ratio (DSCR) – 1.10
- Minimum Risk Rating – C
- Policy Requirements – All projects must conform with Prosper Portland’s Green Building Policy, and Business Equity and Workforce Development Policies in effect at the time of underwriting. The Business Equity and Workforce Development Policies are currently undergoing a revision.
Confirm that your project aligns with the program guidelines above. If so, submit a complete Commercial Property Loan application with all required attachments.
Remember, funds are limited, and the first review of applications will take place on Monday, May 4, 2026.
Our interest rates are typically higher than those of conventional lenders. Rates are determined based on the risk rating of the guarantors and the business, which includes a number of factors.
Yes. Our loans can often complement bank financing, equity investment, or grants to help round out your project’s capital stack.
Yes. All projects financed through Prosper Portland must be located within Portland city limits.
Middle-income housing is defined as units that are affordable to households earning 80 to 120 percent of area median income at rent levels published by HUD annually.
The financing from Prosper Portland under this offering must be used to pay for construction costs associated with the development of new multifamily rental housing that will be affordable to households making between 80% to 120% of area median income (AMI). Visit the current HUD rent schedule for the Portland/Vancouver Metropolitan Statistical Area to learn more.
Yes, the project must be at least 20 units and will be subject to the City of Portland’s inclusionary housing policy. Preference will be given to projects that deliver the inclusionary units within the project.
Yes, this funding opportunity seeks to support development-ready projects. As such, Prosper Portland will evaluate the project’s readiness to proceed. The subject property where the project is located must be:
- controlled by the applicant (via ownership, or a binding purchase and sale or option agreement);
- have final, binding and nonappealable land use permits; and
- have plans that are complete or are nearly complete and ready to be submitted for building permits.
No, Prosper Portland retains the right, in its sole and absolute discretion, to determine which, if any, applications will be funded. Each project will be subject to Prosper Portland’s underwriting and risk analysis. Applications that successfully complete this process must then obtain the appropriate approvals, including, f applicable, by the Board of Commissioners.
Yes, you can. However, remember that funds are limited and there may not be funds remaining to consider later applications.
Work with us
The Lending Team at Prosper Portland has extensive experience in banking, lending, and related financial services and they are prepared to answer questions and ensure you have the information necessary to make informed decisions. If you are interested in applying for a loan or would like assistance understanding our offerings, please email us at lending@prosperportland.us or use the form below to get started.
