Reach Community Development, one of Oregon’s largest affordable housing landlords, has finalized a $12.6 million deal to offload 66 homes, a move it says will help stem cash flow problems and help its tenants become homeowners.

The transaction will see Reach partner with Minneapolis nonprofit Brick By Brick Housing Corp. and the national Housing Partnership Network to form Rose City Fund LLC, which will work over the next two years to repair and sell the 66 “scattered site” single-family, duplex and multiplex homes to new buyers — many of them current tenants, the nonprofit said.

About a third of the units stand vacant, and many require extensive repairs to get them into good enough condition that a bank will approve a mortgage for them, Reach CEO Margaret Salazar said in an interview.

Without this deal, Reach said it would have needed to either take on more debt to finance those repairs — and raise rents to market rates to pay off the debt — or continue to await city subsidies it’s applied for through the Portland Clean Energy Fund. The scattered site rentals are not beholden to all the same rent-restriction rules as the bulk of the nonprofit’s 2,700-unit rental portfolio.

“It’s one thing to fix some plumbing in a kitchen,” Salazar said. “It’s another thing to really get into the home and make system upgrades.”

Of the occupied rentals, 22 tenants have expressed interest in buying and will be referred to the Portland Housing Center for mortgage counseling, paid for by Reach, Salazar said.

Prices will vary depending on whether a buyer takes the home as-is or fixed up, but Reach expects to sell most homes for between $350,000 and $600,000. Current tenants will have right of first refusal.

Next in line would be first-time homebuyers and households making less than 120% of the area median income. The median income for a four-person household is $124,100, so 120% would equal just under $149,000, according to the latest data from the Portland Housing Bureau. Reach said it is working with local organizations Proud Ground, Portland Housing Center, the Urban League of Portland and the Native American Youth and Family Center to reach those buyers.

Scott Fergus, CEO of Brick By Brick, said in a statement his organization “has worked with communities across the country to preserve affordability and expand access to homeownership, and we are honored to bring this experience to Portland.”

Willamette Week first reported in March that Reach was in talks to shed its scattered site portfolio, with residents telling the paper they worried the sales would displace them.

“We know it won’t be the right fit for everyone,” Salazar said. “We’re not trying to sugar coat this. Change is hard for folks.”

Residents who can’t afford to purchase the homes will receive relocation assistance of either $12,000 if they leave by the end of January 2026, or $7,200 if they leave by the end of that June, she said. Meantime, those who buy can apply the $12,000 from Reach toward their down payment.

The nonprofit notified residents of the sale of the homes to Rose City Fund LLC by letter, noting its staff will still handle property management, communications and maintenance.

“For over four decades, REACH has owned and managed these scattered-site homes,” the letter stated. “With repair costs increasing and limited preservation funds available, this change allows us to create new opportunities for residents to become homeowners, while also reinvesting funds back into REACH’s affordable multifamily rental housing so that families across Portland can remain stably housed.”

Reach and other affordable housing providers are experiencing increasing strain in the aftermath of COVID-19, they say, as operating and insurance costs skyrocket. That’s left them scrambling for fresh revenue — even if one-time cash infusions don’t last long — and ways to get languishing assets with high repair bills off their books.

While deeper cuts to its rental portfolio are not immediately planned, Salazar said, “it’s not off the table.”