PDF document

- 1 -

                                    Schedule OR-LENDER Instructions                                           2023 
                                          Lender’s Tax Credit

This publication is a guide, not a complete statement, of Oregon Revised Statutes (ORS) and Oregon Administrative 
Rules (OAR). For more information, refer to the laws and rules at www.oregon.gov/dor.

                                                                 housing payments, regardless of other subsidies pro-
What types of lenders can claim these                            vided to the housing project.
credits?                                                        •  The loan can be made to individuals who participate in 
                                                                a community rehabilitation program. To qualify, the bor-
These credits can be claimed by any bank, mortgage bank-
                                                                rower must own the dwelling and be certified by a local 
ing company, trust company, savings bank, or savings and 
                                                                government or its designated agent as having an income 
loan  association that  maintains  an office  in  Oregon  and 
                                                                level of less than 80 percent of the area median income.
makes a qualified low-interest loan.
                                                                •  The loan can be made to refinance an existing loan that 
                                                                meets the requirements listed above.
What types of loans qualify for the 
                                                                •  The credit can be claimed over the shorter of the term of 
credit?
                                                                the loan or the period approved by HCSD not to exceed 
Energy conservation measures (loans made on or after Jan-       20 years.
uary 1, 1982 and before January 1, 2012). ORS 317.112.          •  The lending institution can sell the loan to a qualified 
•  The loan must be for the purchase and/or installation          assignee and retain the credit.
of items primarily designed to improve the efficiency of        For certifications issued on or after September 27, 2007 the 
space heating and energy utilization of a dwelling. Please      following criteria apply:
see  Oregon Department of Energy (ODOE) Administra-
tive Rule 330-060-0010 for qualifying items. The term           •  The loan can be made to a qualified borrower to finance 
“dwelling” includes mobile homes, floating homes, and           construction, development, acquisition, or rehabilitation 
apartments, but does not include recreational vehicles.         of housing. To qualify, the project must receive certifica-
                                                                tion from the HCSD that:
•  The loan must be made to the owner of an oil- or wood-
heated dwelling.                                                — It will be occupied by households earning less than 80 
                                                                 percent of the area median income, and
•  The borrower must have obtained an energy audit con-         — The full amount of savings from the reduced interest rate 
ducted by a fuel oil dealer, investor-owned utility, pub-        provided by the lending institution is or will be passed 
licly owned utility, or through ODOE.                            on to the tenants in the form of reduced housing pay-
•  A credit is not allowable to the extent the loan exceeds      ments, regardless of other subsidies provided to the 
the following for a single dwelling unit:                        housing project.
— $2,000 to a corporation operating a nonprofit home for        •  The loan can be made to a qualified borrower to finance 
 the elderly described in ORS 307.375, or                       construction, development,  acquisition,  or acquisition 
— $5,000.                                                       and rehabilitation of a manufactured dwelling park. To 
                                                                qualify, the project must receive certification from the 
Affordable housing (loans made on or after January 1, 1990 
                                                                Oregon Housing and Community Services Department 
and before January 1, 2026). ORS 317.097.
                                                                that the housing will be operated as a manufactured 
For certifications issued before September 27, 2007 the         dwelling park for the time period that the credit will be 
following criteria apply:                                       allowed.
•  The loan can be made to a qualified borrower to finance      •  The loan can be made to a qualified borrower to finance 
construction, rehabilitation, or development of housing.        acquisition or acquisition and rehabilitation of housing 
To qualify, the project must receive certification from the     consisting of a preservation project. To qualify, the proj-
Oregon Housing and Community Services Department                ect must receive certification from HCSD that:
(HCSD) that:
                                                                — It will be occupied by households earning less than 80 
— It will be occupied by households earning 80 percent           percent of the area median income, and
 or less of the area median income, and                         — The housing has a rent assistance contract with the 
— The full amount of savings from the reduced inter-             United States Department of Housing and Urban 
 est rate provided by the lending institution is or will         Development or the United States Department of 
 be passed on to the tenants in the form of reduced              Agriculture.
150-102-125-1 (Rev. 10-05-23)                                 1                          2023 Schedule OR-LENDER Instructions

- 2 -

• The loan can be made to an individual who participates Affordable housing. Taxable years and loans made begin-
in a community rehabilitation program. To qualify, the ning on or after January 1, 1990 and before January 1, 2026.
borrower must own the dwelling and be certified by a
local government or its designated agent as having an
income level of less than 80 percent of the area median What happens if the credit exceeds the
income. tax?

• The loan can be made to refinance an existing loan that Credits. For tax years beginning on or after January 1, 2001
meets the requirements listed above. a taxpayer claiming a credit against tax must claim the full
• The credit can be claimed over the shorter of the term of amount of any credit that is allowed for the tax year, to the
the loan or the period approved by the Oregon Housing extent of the tax liability.
and Community Services Department not to exceed 20 Energy conservation measures. Tax credits for loans made
years. on or after September 29, 1991 are not refundable but are
• The lending institution can sell the loan to a qualified eligible for a 15-year carryforward.
assignee and retain the credit. Affordable housing. The excess credit allowed within the
4 percent limitation can be carried forward for up to five
What interest rate can be charged years. Unused credits from tax years starting before January
1, 1995, may be carried forward 5 years.
on a qualified loan?

Energy conservation measures. The interest rate can’t What evidence must the lender keep on
exceed 6.5 percent annually.
file and provide with tax return to verify
Affordable housing. The interest rate charged must be less
the claimed credit?
than the market rate for a similar nonqualifying loan made
at the same time under like terms and conditions as the Energy conservation measures. The lender must retain a
qualifying loan. copy of the loan application and a copy of the energy audit
and space heat certification. Also, provide a copy of the cer-
tification with your tax return.
How is the amount of credit computed?
Affordable housing. The lender must retain a copy of the
Energy conservation measures. The credit is the difference loan application and a copy of the certificate issued by
between the interest charged at 6.5 percent on qualifying HCSD, a local government entity, or its designated agent.
loans and the interest that would have been charged calcu- Also, provide a copy of the certification with your tax
lated as follows: For each qualifying loan, use the lesser of return.
the interest rate set by ODOE prior to making the loan or
the interest rate charged on nonqualifying loans made at In addition, for all qualifying loans, the lender must pre-
the same time. pare and retain a list of all loans made (by type) and show
each borrower’s name, address, and Social Security number
Note: For loans made after September 27, 1987 interest (SSN) or federal identification number (provided the bor-
charged on any loan fee included in the body of the loan rower has signed an authorization to disclose this informa-
must be included in computing the credit. tion) and the amount and date of the loan. If the borrower
Affordable housing. The credit is the difference between has not signed a disclosure authorization, then the loan
the finance charge (including the loan fee) for the loan number should be entered in lieu of name, address, and
and the market rate finance charge that would have been SSN or federal identification number.
charged by the lender on similar nonqualifying loans made
at the same time under like terms and conditions. The dif-
Do you have questions or need help?
ference is limited to 4 percent of the average unpaid bal-
ance of the loan during the tax year for which the credit is www.oregon.gov/dor
claimed. 503-378-4988 or 800-356-4222
questions.dor@ dor.oregon.gov
When can the credit be claimed? Contact us for ADA accommodations or assistance in other
languages.
Energy conservation measures. Taxable years and loans
made beginning on or after January 1, 1982 and before Janu-
ary 1, 2012.

150-102-125-1 (Rev. 10-05-23) 2 2023 Schedule OR-LENDER Instructions

PDF file checksum: 1925726659

(Plugin #1/9.12/13.0)