Homebuyers in Oregon face some of the most unique challenges in the entire United States. With a May 2022 average home price of $509,539 according to Zillow, it can feel next to impossible to save up a down payment.
Bidding wars, relatively high interest rates, and external factors like student loan debt make this even more difficult.
Luckily, the state has implemented programs to bridge this gap.
Programs for Oregon first-time home buyers
As an Oregon first-time home buyer, you'll want to become familiar with the Oregon Housing and Community Services organization (OHCS). OHCS offers below-market interest rate mortgage loans in addition to closing cost and down payment assistance.
We actually told a little fib in the title. There are actually three OHCS programs to learn about. These are:
OHCS Rate Advantage Home Loans
OHCS Cash Advantage Home Loans
Oregon Down Payment Assistance
Both of these programs are funded by bond sales through the Oregon Bond Residential Loan Program.
Within the program, you are free to use one of an array of mortgages with the OHCS assistance programs, including conventional, USDA, VA, and FHA loans.
Related: A first-time home buyer guide
Oregon Rate Advantage Home Loans
OHCS' Rate Advantage program carries the lower interest rate of the two programs, and requires a down payment of at least 3% in order to qualify for the lower rate. This combination of putting a little money down and locking in a lower interest rate typically mean lower monthly payments.
Due to the more competitive interest rate, the Rate Advantage program does come without the financial assistance of the Cash Advantage program.
Oregon Cash Advantage Home Loans
The Cash Advantage program is a little different. Its goal is to lower the closing costs required to purchase and get into your new house. As such, it does not require any down payment whatsoever, though the monthly payments could be a little higher than what you would find under Oregon's Rate Advantage program.
Like with the Rate Advantage program, you'll need to be purchasing a house for the first-time or have not owned a home in the previous three years.
You'll receive a grant worth 3% of the value of the mortgage loan.
Oregon Bond Residential Loan eligibility
Both of the above programs have the same eligibility requirements to meet. They are as follows:
Must reside in the state of Oregon
Eligible homes include single-family homes and condominiums
Must meet program income limits, which vary by county
Purchases adhere to Oregon Bond Residential Loan purchase price limits
Oregon Down Payment Assistance
Oregon Housing and Community Services is also a great resource on the state's main down payment assistance programs. This program provides at least $15,000 for participants to use towards their own down payments and closing costs, if applicable. The program does require that at least $1,000 of the down payment/closing expenses comes from your own money.
OHCS does more in the down payment space beyond just one program too. They provide funding to other down payment assistance programs across the state to support their own programs. Among the many OHCS funded down payment assistance programs are:
African American Alliance for Homeownership
Community in Action
Native American Youth and Family Center
Portland Housing Center
Applying for the Oregon Bond Residential Loan Program
Applying to take part in the Oregon Bond Residential Loan Program requires you to work with a participating lender within the state.
You can find participating lenders by using the OHCS help tool. They even have loan officers fluent in languages such as Spanish, French, Chinese, and many more.
It's as simple as that.
Other Oregon state programs
The state offers additional programs beyond those within the scope of OHCS. The most notable of these is the Oregon First Time Home Buyer Savings Account.
Oregon First Time Home Buyer Savings Account
Under Oregon state law, residents can use this special savings account as a way to lower their tax liability and save up for their first home at the same time. This program can be used for a maximum period of ten years, and allows you to deduct up to $5,000 each year for deposits you make into a first time homebuyer savings account.
The best part is that couples that are married and filing jointly can deduct up to $10,000 per year. To be eligible, you must:
Be a resident of Oregon who has never purchased a single-family home (in last three years)
Use your savings for down payments, closing costs, appraisals, or other qualifying real estate fees
As of this time, accounts must be used to purchase a home within ten years of opening the account.
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