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Medford, Oregon First Time Home Buyer

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Medford, 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.

Medford, 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 Medford (Jackson County) are as follows:  Single unit: $320,850.   Two units: $410,750.  Three units: $496,500.  Four units: $617,000.  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.

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Medford, OR – Down Payment Assistance Programs

Medford 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 Medford offers an exclusive down payment assistance program.  You can view both the Oregon statewide and Medford first time home buyer down payment assistance program below:

Medford – RVAR/OAR HOME Foundation First Time Homebuyer Assistance Program & Home Ownership Assistance Program (HOAP)

Known as ACCESS, this branch of Medford’s government is dedicated to creating affordable housing options for those families that aren’t making a lot of money. Currently, they have two programs.

The first, the RVAR/OAR program is one funded by the Rogue Valley Association of Realtors and the Oregon Association of Realtors. It works as a grant that offers up to $1,000 in assistance funds to put toward down payment and closing costs.

The second, HOAP, is another grant program for low- to moderate-income first-time homebuyers.

Qualifications
RVAR/OAR

  • Recipients must contribute at least $500 of their own funds toward the down payment total.
  • Homebuyers must attend an education class and meet with a Certified Homeownership Counselor provided by ACCESS.
  • Buyer must work with a Real Estate Agent and Lender that are active member of the Southern Oregon Multiple Listing Service.
  • Recipients must be first-time homebuyers. They cannot have held property for the past three years.
  • Recipients must obtain pre-approval for a conventional or government insured mortgage.
  • Household income cannot exceed the State of Oregon’s median income.
  • Eligible properties must be located with Jackson or Josephine County.

HOAP
Though similar to the RVAR/OAR, there are a few key differences.

  • Household income cannot exceed 80% of the median area income based on location and size of family.
  • Lender must be willing to apply to the ACCESS Homeownership Center on buyer’s behalf.
  • The property must be real.

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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.

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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.

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