Bend, OR – First Time Home Buyer Programs
Are you looking to purchase your first home? Our first time home buyer programs might be the perfect solution to help you obtain the financing you need to purchase the home you desire. We provide excellent home financing options, and encourage you to compare our offered loan terms to other mortgage lenders.
Bend, OR – First Time Home Buyer Loans
There are 5 types of first time home buyer loans. You may select different loan terms, such as a fixed rate or adjustable rate mortgage, and the number of years to repay the loan (such as a 30 year fixed rate mortgage).
Types of Mortgages:
- Conventional Loans – Conventional loans offer the best loan terms to borrowers with good or excellent credit, as well as those who can afford to place a larger down payment. If you are able to put 20% or more down, you will be able to avoid paying private mortgage insurance (PMI). However, conventional loans also offer low down payment options, such as programs that only require 3% down.
- FHA Loans – FHA loans are a good option for borrowers who may not be able to qualify for a conventional loan. The qualification requirements for FHA loans are much more lenient than conventional loans. This includes options for home buyers with credit scores as low as 500 (in order to qualify for a 3.5% down payment, you must have a credit score of at least 580).
- USDA Loans – USDA loans provide home buyers the opportunity to purchase a home without any down payment. These loans are intended for borrowers with low-to-moderate income. In addition to not requiring any money down, you can also finance the closing costs into the loan. This means you can essentially buy a home with no money out of pocket!
- VA Loans – Active duty military members and veterans can apply for a VA loan which allows you to buy your first home without any down payment. These loans are not available to the general public, but exclusively to military/veterans.
- Jumbo Loans – Any loan that does not meet the conforming or FHA loan limits is a jumbo loan. The FHA loan limits for Bend (Deschutes County) are as follows: Single unit: $409,400. Two units: $524,100. Three units: $633,500. Four units: $787,300. For conforming loans, which are used for conventional and VA loans, the maximum loan limits are: Single unit: $484,350. Two units: $620,200. Three units: $749,650. Four units: $931,600. If you want to buy a more expensive home, and have the income to qualify, we provide what are known as jumbo loans up to $2,000,000.
The above 5 types of loans are the main first time home buyer options that exist. We can help you determine which loan is the right fit for you based on your particular needs and eligibility.
Bend, Oregon – Down Payment Assistance Programs
Bend is eligible for a number of down payment assistance programs offered in Oregon. This includes national first time home buyer incentives offered through HUD, as well as a statewide program. In addition to national and Oregon state programs, the city of Bend offers an exclusive down payment assistance program. You can view both the Oregon statewide and Bend first time home buyer down payment assistance program below:
Oregon Housing and Community Services – Residential Loan Program
Periodically, Oregon Housing and Community Services will issue mortgage revenue bonds as a way to assist eligible households in obtaining lower than market rate interest loans on their first home. More commonly referred to as the Oregon Bond Loan, this program helps families both make a house purchase and keep monthly payments low enough to afford.
It is split into two distinct choices eligible applicants can choose from. These are:
- Cash Advantage, is the down payment assistance loan. It gives borrowers a fixed rate loan of lower interest along with cash assistance of up to 3% of the loan itself. These fund can then only be used to pay for down payment and closing costs.
- Rate Advantage, simply helps give borrowers the lowest fixed rate possible as a way to maximize property purchasing potential through affordability.
How to qualify for the Residential Loan Program:
- Household income levels must fall under the limits set forth by Oregon Housing.
- Borrowers can only be first-time homebuyers, meaning they cannot have owned any sort of principal residence in three years prior to closing. This is waived, however, if the property is located in a designated area.
- Borrowers must be Oregon residents and must agree to inhabit the home primarily.
- Applicants cannot have been discharged from bankruptcy in the past two years or have suffered foreclosure in the past five years.
- Mortgage length may vary from 15 to 30 years. This loan may be an FHA insured, USDA Guaranteed Rural or Conventional Uninsured.
- Eligible properties must be located in Oregon and can be either existing or newly constructed. Units include site-built homes, condos, homes in a planned development and manufactured homes permanently tied to foundations. If it is a manufactured home, it must have been built after 1976 and offer its residents a living area of at least 400 feet.
- A recapture fee is in effect for properties that are sold or refinanced within the first nine years.
Bend – Community Development Block Grant Homebuyer Assistance Program
More commonly referred to as the CDBG, Bend uses this program to provide its local residents with down payment assistance once they are ready to buy a home. It is awarded as a loan with 0 to 3% interest based on the financial status of the applicant. This can then be amortized or deferred. The loan itself can be a maximum of $50,000 while the down payment and closing cost assistance cannot be lower than $1,000. Like many assistance program, the loan is immediately due in full should there be a refinance, default or vacating of property.
- Eligible applicants can only purchase a single-family home. This home may be a one unit building, condo or manufactured home. Should it be manufactured, the borrower must own the land the home is on.
- The property must be made the main residence within 60 days of acquisition.
- At the time of application, borrowers must meet HUD’s low- to- moderate income levels. Proof of this will be required.
- A homebuyer education course must be completed.
- Borrowers must qualify for a first mortgage that is a fixed rate loan that has no negative amortization, adjustable rate features or balloon payments.
- The total debt to income ratio cannot be more than 40%, following the inclusion of CDBG assistance. Should the loan be requested for a 30% ratio, approval must be obtained.
- Assistance is limited to only properties located within Bend, Oregon.
- Including CBDE assistance, the total debt accrued by the mortgage cannot exceed 100% of the price of the property.
- The property must meet all code requirements and standard. Should it be older than 1978, it must be inspected for lead paint. Should this paint type be found, it must be properly disposed of prior to closing.
- The City of Bend Economic Development Department must pass the property during an environmental review.
- Should the property be located in a dangerous area, it is required to maintain all eligible forms of insurance with the City of Bend as the Mortgagee.
Frequently Asked Questions About Buying Your First Home
How much do I need for a down payment?
It depends on the type of loan you want. USDA and VA loans often will not require any down payment. FHA loans require a 3.5% down payment, which if you get down payment assistance, only .5% is required. Conventional loans typically require either 3% or 5%.
How do I know if I am ready and prepared to own a home?
It is critical to consider the often unexpected expenses of buying a home. This includes repairs, maintenance, and of course furnishing the home, monthly utilities, and all other expenses that are associated with homeownership. A common mistake is to just look at the difference in rent to your total mortgage payment. Almost every year, you can expect to have to pay for various upkeep to keep the property functional. This can include anything from repairing a hot water heater that broke, to landscaping, and various maintenance.
Something else financial consultants advise is that you have at least 3 months of reserves. This means that you could afford to make your new mortgage payment for at least 3 months in the event that you lose a job or have some other unforeseen circumstance that the savings would be needed for. This is not a requirement for most home loans, but it is good advice to consider.
How much can I afford to borrow?
The amount that you can borrow depends on your particular loan type and income. There are maximum loan limits which are set at the county level. Conforming loan limits are the maximum lending amount allowed for conventional mortgages. FHA loans have their own loan limits. You can search the maximum loan amount for your county for each particular loan type by entering your zip code (or any zip code for the county you want to buy a home in). This will display the maximum amount available for all loan types. This is not necessarily how much you can borrow though, but the max amount in your location. Your personal limits will be based upon your income and how much debt you have. For instance, with most loans, you can not have a mortgage payment and debts exceed 43% of your income.
Can I buy a home without a real estate agent?
It depends on your state and the type of loan program. For some states, you must use an agent. In other states, you are not required to use a real estate agent for many loan program, such as conventional mortgages. However, some loan types require that you use a real estate agent regardless of your location, such as USDA loans.
Can I buy a home if I owe tax debt?
For government-backed loans, such as FHA, VA, and USDA loans, you can buy a home with tax debt as long as you have made a payment plan with the IRS and are not behind on the payments. Any federal debt must be in good standing in order to get a government-based mortgage. If your tax debts have moved into the status of a tax lien, this will prevent you from getting a home loan until it is resolved.
Can I buy a home if I have student loans?
As long as you are not delinquent on the student loan payments and the monthly payments do not cause excessive debt-to-income ratios, you can still get a mortgage.
Can I buy a home without my spouse?
A common question is if you can buy a house without your wife or husband. The short answer is yes. There are numerous reasons someone may want to exclude their spouse from a mortgage application, such as lower credit, lack of job history or income, or one spouse having excessive debt that could prevent an approval. You may be able to qualify and get a home loan without your spouse.
Have more questions about buying your first home? Give us a call at 1-800-731-3560.