Oregon First Time Home Buyer – 2019 Loan 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.
Oregon 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 (620 credit score or higher), 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 in Oregon range from $314,827 to $474,950. The conforming loan limits, which are applicable to conventional and VA loans, is $484,350. If you want to buy a more expensive home than what these limits will allow, 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.
Oregon Down Payment Assistance Programs
First time home buyers in Oregon may be eligible to receive down payment assistance. This includes programs that are available statewide, as well as some locally offered programs (available at the city or county level).
Oregon Bond 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.
- Cash Advantage – This 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.
- 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.
You can learn more about this program on the Oregon Housing and Community Services website.
Clackamas County – Clackamas Homebuyer Assistance Program (CHAP) & North Clackamas Revitalization Area (NCRA)
Clackamas County offers its residents two forms of down payment assistance. Though both are similar, they have their key differences. CHAP is offered to all that reside within Clackamas County and is awarded on a first come, first served basis. Funded by HUD, it is a 0% deferred payment loan that offers the greater of either $14,000 or 6% of the purchase price. The NCRA is only available for those purchasing properties within the NCRA boundaries. It follows the same loan limits as the CHAP but is forgivable. Provided all rules are met after a 10 year period, the loan total is entirely forgiven.
- You must be a first time home buyer.
- It is required that you complete a homebuyer education course.
- The loan amount is due in full should the property be sold, the title transferred or the first mortgage refinanced.
- You must contribute at least $1,000 from your own funds (can not be gifted).
- Any applicable homeowners insurance must be maintained while the property is occupied.
- Both forms of assistance can be combined with other down payment assistance programs. The two can be used simultaneously if the property is in the NCRA designated area.
- You can not have had a foreclosure within the last 5 years. For a bankruptcy, it must have been discharged at least 2 years before closing.
- First mortgage can be up to 30 years in length and can only be fixed-rate.
- The purchase price must not exceed $335,000.
- Income maximum can only be 80% of the area’s median adjusted based on family size. This is 120% for NCRA applicants. You can view the income limits on this program brochure.
To learn more about this program, please visit the Clackamas County website.
Corvallis First Time Homebuyer Program
This program offers low-income first-time homebuyer families no interest loans of a maximum of $20,000. This total is used to help pay down payment and closing costs that typically arise during the purchase of a property.
- Buyers are required to complete a homeownership education program provided by Willamette Neighborhood Housing Services.
- Because the money offered is government money, all applicants are expected to comply with the Uniform Relocation Act (URA). This act states that a property cannot be purchased if an amicable agreement cannot be met, the owner does not want to sell or sale of the property would result in the displacement of other occupants.
- Low-income applicants are those that make no more than 80% of the average median income level in Corvallis based on the size of the family. You can view these income limits below.
- 1 person: $47,150
- 2 people: $53,850
- 3 people: $60,600
- 4 people: $67,300
- 5 people: $72,700
- 6 people: $78,100
- 7 people: $83,500
- 8 people: $88,850
You can learn more about this program on the City of Corvallis website.
Portland Housing Bureau – Down Payment Assistance Program
Designed for first-time homebuyers seeking residence in the Lents Town Center Urban Renewal Areas and Portland’s Interstate Corridor, this loan works as a second mortgage used in conjunction with a first mortgage provided by a participating lender. The total amount awarded ranges from $48,000 to $61,000 with an added grant of 25% of the amount of the loan for home improvements. This totals out to be about $12,000 to $16,000. It is a 30-year loan and earns 0% per year with a 0.012% Annual Percentage Rate (APR). There is a $500 underwriting fee so that the borrower’s risk assessment can be determined.
- Eligible applicants are first-time homebuyers that have not owned a house in the past three years.
- The property must be continually used as the primary residence.
- Household income must be below 80% of Portland’s median income.
- Borrower must be able to secure a first mortgage.
- Assets can be no more than $10,000 in total by time of closing.
- Borrower must be a legal resident of the United States.
- Applicant is required to complete a HUD-approved homebuyer education course.
- No less than $500 of applicant’s money must be put toward the loan. Gift funds are acceptable.
- The property itself must be located either on the East or West side of the Interstate Corridor or the Lents Town Center Urban Renewal Areas.
- Only single-family units are acceptable, including town homes and pre-existing condos. New condos are not covered by this loan.
- Short sales are not allowed unless the buyer can prove that all lien holders have agreed to the price of sale and closing is possible in the typical range of time.
You can learn more about this program on the city of Portland website.
City of Gresham WELCOME HOME Program
First time home buyers in Gresham may be eligible to receive up to $20,000 in down payment assistance. The funds are provided as a deferred loan with a 0% interest rate. After 15 years, the loan will be completely forgiven (which means you do no longer owe anything).
- Be a first time home buyer.
- The home must be located within the city limits of Gresham.
- Contribute at least $1,000 cash from your own funds.
- The maximum sales price allowed is $329,000.
- Meet the household income limits, which are outlined below.
- 1 person: $45,600
- 2 people: $52,100
- 3 people: $58,600
- 4 people: $65,100
- 5 people: $70,350
- 6 people: $75,550
- 7 people: $80,750
- 8 people: $85,950
To learn more about this program, please visit the city of Gresham website.
Oregon First Time Home Buyer Tax Credits
The Mortgage Credit Certification (MCC) tax credit provides you an opportunity to reduce your tax bill, as well as enhance your home loan application by reducing your debt-to-income ratios. How this works, is you can deduct up to $2,000 off your federal tax bill each year. The MCC allows up to 35% of your annual interest to be eliminated (with the cap being at $2,000). Some great news, is this can be used in addition to standard mortgage interest deductions!