Clackamas County tables state's moderate-income 'Merurl' loan program amid legal and financial concerns
June 16, 2026 | Clackamas County, Oregon
This article was created by AI summarizing key points discussed. AI makes mistakes, so for full details and context, please refer to the video of the full meeting. Please report any errors so we can fix them. Report an error »
County staff presented the state's Moderate-Income Revolving Loan program (referred to in the meeting as Merurl), a 2024 legislative tool that directs $75 million in state funds to local jurisdictions to offer no-interest loans for housing serving households up to 120% of area median income.
Shannon Callahan, the county's Housing and Community Development division director, described the basic mechanics: a sponsoring city or county borrows state capital and relends it to developers to close financing gaps; the county would administer underwriting, monitoring and compliance, and repayment is typically expected to come from a property-tax deferral on the improved value of project parcels over a 10-year period.
Staff flagged several practical concerns. The county assessor must determine improvement values and administer tax-deferral mechanics; local governments remain legally responsible to the state for repayment even if a developer defaults; administrative capacity would be required for underwriting and asset monitoring; and program fees are limited (a 5% administrative fee to the sponsoring jurisdiction and 1% to the assessor only when a loan issues). Presenters provided preliminary cost estimates: roughly $50,000 or ~0.25 FTE to stand up a program, about $25,000 in legal fees, underwriting at approximately $5,000 per application, and monitoring costs the presenters estimated at about $1,000 per unit per year.
Commissioners expressed a sequence of objections: the program covers households up to 120% AMI (presenters cited an example of ~ $149,000 for a family of four in the Portland metro area); the repayment model (property-tax deferral) may provide too small a revenue stream to protect the county from loan risk; and the statute is incompletely tested—no jurisdiction had yet issued a Merurl loan as of the presentation. Commissioner comments emphasized the county's exposure if projects fail and the practical administrative load.
Given the open questions and the possibility of statutory changes in the next legislative session, Commissioner Savis moved to table consideration; Commissioner West seconded; the motion passed 5-0.
The board asked staff to track state-level fixes and consider collaborating with other jurisdictions and the Association of Oregon Counties to pursue legislative refinements before re-engaging on program adoption.
If the county later pursues Merurl participation, staff said it would return with a proposed program ordinance, underwriting rules, and a clearer financial model showing loan size, repayment estimates, and responsible departments for ongoing compliance.
Shannon Callahan, the county's Housing and Community Development division director, described the basic mechanics: a sponsoring city or county borrows state capital and relends it to developers to close financing gaps; the county would administer underwriting, monitoring and compliance, and repayment is typically expected to come from a property-tax deferral on the improved value of project parcels over a 10-year period.
Staff flagged several practical concerns. The county assessor must determine improvement values and administer tax-deferral mechanics; local governments remain legally responsible to the state for repayment even if a developer defaults; administrative capacity would be required for underwriting and asset monitoring; and program fees are limited (a 5% administrative fee to the sponsoring jurisdiction and 1% to the assessor only when a loan issues). Presenters provided preliminary cost estimates: roughly $50,000 or ~0.25 FTE to stand up a program, about $25,000 in legal fees, underwriting at approximately $5,000 per application, and monitoring costs the presenters estimated at about $1,000 per unit per year.
Commissioners expressed a sequence of objections: the program covers households up to 120% AMI (presenters cited an example of ~ $149,000 for a family of four in the Portland metro area); the repayment model (property-tax deferral) may provide too small a revenue stream to protect the county from loan risk; and the statute is incompletely tested—no jurisdiction had yet issued a Merurl loan as of the presentation. Commissioner comments emphasized the county's exposure if projects fail and the practical administrative load.
Given the open questions and the possibility of statutory changes in the next legislative session, Commissioner Savis moved to table consideration; Commissioner West seconded; the motion passed 5-0.
The board asked staff to track state-level fixes and consider collaborating with other jurisdictions and the Association of Oregon Counties to pursue legislative refinements before re-engaging on program adoption.
If the county later pursues Merurl participation, staff said it would return with a proposed program ordinance, underwriting rules, and a clearer financial model showing loan size, repayment estimates, and responsible departments for ongoing compliance.
Don't Miss a Word: See the Full Meeting!
Go beyond summaries. Unlock every video, transcript, and key insight with a Founder Membership.
✓
Get instant access to full meeting videos
✓
Search and clip any phrase from complete transcripts
✓
Receive AI-powered summaries & custom alerts
✓
Enjoy lifetime, unrestricted access to government data
30-day money-back guarantee
