Unlocking the Moderate-Income Revolving Loan: Turning Complexity into Opportunity

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Oregon's Moderate-Income Revolving Loan (MIRL) program started with a straightforward premise: provide direct financing to help developers build housing attainable for households earning up to 120% of area median income. This is housing for the teachers, nurses, and service workers who earn too much to qualify for deeply subsidized housing, but can't afford market-rate homes. The program made sense on paper. However, for smaller communities that don’t have the bandwidth or team capacity to submit applications, it has been challenging to access these funds. To address this gap, the Missing Middle Housing Fund is piloting an innovative program with Stephen Brooks of Community Innovation Partners, working alongside two Oregon cities to provide the tools and processes smaller communities need to successfully navigate the application. Funding to support Stephen's work comes from the Boardman Housing Fund and Southern Oregon Coast Regional Housing.

A Capacity Problem, Not a Political One

When small and mid-sized cities like Boardman and Coos Bay first looked at MIRL, the conversation often stalled before it reached a specific project. The issue wasn't whether they needed these funds to create moderate-income housing, but whether or not they had the time and resources to apply for it.

“As a Boardman resident of 10 years, housing has always been the topic of conversation,” says Brandon Hammond, City Manager of Boardman. “And now as City Manager, that desire to solve it has only intensified-- so when I heard of the MIRL program I thought, this is it. A program that focuses on bringing housing prices down without losing the quality, and a funding source that can have an impact.”

Nichole Rutherford, City Manager of Coos Bay, saw it the same way. “With MIRL, it started out with, ‘Hey, there’s this new program and I think it’s something that could work,” she recalls. “Stephen dove in really deep, picked it all apart, and then broke it down in a way I could understand and helped me navigate all the necessary pieces to get it in front of council.”

Under the original structure, cities were expected to underwrite loans, negotiate and process grants, structure repayment terms, monitor affordability compliance for at least a decade, and report back to the state. For a city of 15,000 people or less, running lean, that's not a side task. Stephen Brooks, who has spent the last two years helping Oregon cities navigate MIRL, puts it plainly: "Smaller cities operate with a kind of just-in-time manufacturing mentality. They have just enough people to cover all the stuff that needs to get done and no more. This program is a part-time job for somebody, even if they only do one project a year. Somebody still has to understand it and know how it works. And small cities just don’t have that extra capacity."

The state's program documents are all publicly available. But as Stephen notes, "somebody has to look at that and understand, 'How does that work? How do I get knowledgeable at how the whole system works?” The rational response for many cities may be simply to pass.

Aggregation, Not Just Collaboration

Some of MIRL's early obstacles were genuinely technical. Certain grant provisions inadvertently created taxable income for private developers; a developer who needed $1 million might effectively receive only $640,000 after taxes. Lien structures conflicted with conventional mortgage financing, creating potential issues for homebuyers to secure loans on MIRL-assisted properties. Legislative fixes were required, and some are still working through the process. But beneath those technical problems was a structural one. Oregon has dozens of small cities that could theoretically use MIRL. If each one builds its own underwriting process, legal documents, and compliance system from scratch, the result is duplicated effort and inconsistency, with no single city getting much return on the investment.

Stephen draws a clear distinction between the obvious solution and the right one: "It's collaboration versus what I call aggregation. If you get an aggregator, a single system, then everybody can use the same system. It's hugely efficient." His earlier work incubating nonprofit programs under a single administrative umbrella gave him a template: instead of 50 organizations each building their own infrastructure, one organization runs 50 programs. The efficiency gains are substantial.

Applied to MIRL, that means a centralized administrator (in the pilot case, an economic development district serving three coastal Oregon counties) handles underwriting, loan administration, compliance oversight, and state reporting. Cities still approve projects and sign agreements, but they're no longer expected to build and maintain the financial infrastructure themselves.

The benefit flows to the state agency, too. Instead of interfacing with dozens of jurisdictions running slightly different interpretations of the program, Oregon Housing and Community Services will work with one experienced administrator using standardized documents. Fewer errors, faster timelines, cleaner data.

Why Moderate-Income Housing Needs Different Mechanics

MIRL operates in a part of the housing market that is neither deeply subsidized nor fully market-rate and that distinction matters for how the financing has to work. Affordable housing at 60% AMI relies on layered financing: Low Income Housing Tax Credits, HOME funds, and multiple sources stacked together. That ecosystem has decades of established administrators, legal templates, and compliance frameworks behind it. Moderate-income housing at 120% AMI doesn't. It has to function more like conventional real estate finance with disciplined underwriting, clean lien positions, and repayment structures that don't conflict with senior debt.

What $70 Million Can Realistically Do

At full deployment, MIRL's $70 million allocation will likely support less than 100 projects statewide, which is modest relative to Oregon's overall housing shortage. But although the program is currently modest, Stephen still believes the program will "keep projects percolating along that otherwise would get stalled out. And particularly for smaller communities, it may make the difference between a project going forward and not going forward."

That's the honest case for MIRL. Not that it solves everything, but that it moves projects that are almost viable across the finish line. For smaller cities especially, the gap between nearly feasible and actually financeable is often narrow. A well-structured loan at the right moment is sometimes all it takes.

The Infrastructure Is the Point

The most durable outcome of this work may not be the dollars deployed, but the system built to deploy them. A centralized underwriting and administration model that works for MIRL can work for the next program too. Lowering transaction costs, shortening timelines, and giving smaller cities access to specialized capacity they could never justify building on their own.

For the Missing Middle Housing Fund, that's the throughline. As Stephen puts it, the goal is making sure "smaller towns don't bear the burden of managing a system they really can't sustain." Capital without the systems to use it efficiently doesn't move housing. Building those systems is what turns policy into production.