(1) The Legislative Assembly finds that:

(a) There is a significant number of rental properties in this state whose owners have obtained rural rental housing loans from Rural Development or the Farm Service Agency of the United States Department of Agriculture under 7 C.F.R. § 3560. Many of these rental properties contain rental units in which very low, low and moderate income families, elderly persons and persons with disabilities live and receive federal rental assistance.

(b) Beginning in 2015, many of the mortgage loans made to the owners of these rental properties will mature and federal rental assistance to tenants residing on the premises of these rental properties will no longer be available.

(c) Currently, there is no legal mechanism in place requiring the owners of these rental properties to provide notice of loan maturity to tenants, the Housing and Community Services Department, housing authorities as defined in ORS § 456.005 and local governments.

(d) Requiring notice at least one year before maturity of a loan described in paragraph (a) of this subsection would provide:

(A) Tenants with time to locate alternative housing and rental assistance; and

(B) The Housing and Community Services Department, housing authorities and local governments with time to work with Rural Development or the Farm Service Agency of the United States Department of Agriculture to develop arrangements that will protect the housing status of existing tenants.

(2) The owner of any rental property that has received a rural rental housing loan from Rural Development or the Farm Service Agency of the United States Department of Agriculture under 7 C.F.R. § 3560 shall provide written notice by first class mail with postage prepaid and by posting in a common area on the rental property notice of all of the following:

(a) The date upon which the loan matures;

(b) That federal rental assistance will no longer be available after the date of loan maturity with respect to the rental property that includes the premises on which the tenants reside; and

(c) That there may be other program use restrictions and rent controls that expire after the date of loan maturity.

(3) The notice required by subsection (2) of this section must be mailed to:

(a) Any tenant residing on the premises of the rental property that is the subject of the loan, mailed to the street address of the premises on which the tenant resides, on or after the date that is one year before the date of loan maturity;

(b) The Director of the Housing and Community Services Department;

(c) The housing authority that is located in the county or area of operation in which the rental property is located; and

(d) The mayor, planning department or person or entity with a similar function in the local government in the area in which the rental property is located.

(4)(a) Failure to provide the notice required by this section entitles a tenant residing on the premises of the rental property on the date that is at least one year in advance of the date of loan maturity to continue residing on the premises of the rental property without any increase in the tenant’s portion of the rent charged for up to one year after the date of loan maturity, or one year after termination of the tenant’s federal rental assistance, program use restrictions or rent controls, whichever date is later.

(b) Providing notice less than one year before the date of loan maturity entitles a tenant residing on the premises of the rental property on the date that is at least one year before the date of loan maturity to continue residing on the premises of the rental property without any increase in the tenant’s portion of the rent charged for a period of time that equals the number of days that the notice was late.

(c) If the tenant begins residency at a time that is less than one year before the date of loan maturity, the tenant must receive the notice required by this section prior to entering into a rental agreement. Failure to provide the notice required by this paragraph entitles the tenant to continue residing on the premises of the rental property without any increase in the tenant’s portion of the rent charged for up to one year after the date of loan maturity, or one year after termination of the tenant’s federal rental assistance, program use restrictions or rent controls, whichever date is later.

(5) The provisions of subsection (4) of this section are not intended to contravene the owner’s right to terminate a tenant’s residency or evict a tenant for good cause.

(6) As used in this section, ‘local government’ means cities and counties. [2015 c.182 § 1; 2021 c.57 § 6]

456.500 was enacted into law by the Legislative Assembly but was not added to or made a part of ORS Chapter 456 or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.

AFFORDABLE HOUSING DEVELOPMENT