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Oregon First Time Home Buyer Program GUIDE [2022] | 🏠 Oregon Down Payment Assistance, Grants & First Time Buyer Loans {data, programs, tips, etc}

Are you ready to buy a house in Oregon? As a first time buyer, you already know it can be an uphill battle. The median home price in Oregon is $534,000 or $293 per square foot – well above the national average and up more than 12% year-over-year. The Portland housing market has been tight and left buyers with limited options, stiff competition, and skyrocketing prices.

Fortunately, you can qualify for many first time home buyer programs in Oregon that put homeownership within reach. This guide covers everything you want to know to get down payment assistance in Oregon, first time home buyer grants, and first time buyer mortgages with the best rates.

First Time Home Buyer Programs in Oregon | Down Payment Assistance & Grants for First-Time Home Buyers

Struggling to save up enough money to buy your first house? These first time home buyer programs Oregon offers can help you bridge the gap with a grant or 0% interest loan you can use toward closing costs and your down payment!

Oregon First Time Home Buyer Savings Account | Oregon Department of Revenue

The First-Time Home Buyer Savings Account Oregon law lets Oregon residents reduce their tax liability while saving up for their first home. You can deduct up to $5,000 from your Oregon taxable income for deposits you make into a First-Time Home Buyer Savings Account per year for up to 10 years. The deduction is up to $10,000 for couples filing jointly.

To qualify, you must be an Oregon resident who has not owned or purchased a single-family home in the last three years prior to the date you plan to buy a home in Oregon. The money saved in your account can be used toward a down payment, closing costs, real estate agent fees, appraisals, and loan origination fees.

Note that the account must be opened by December 31, 2026 and the money must be used to buy a home within 10 years of opening your account. If you do not use the funds for buying a home as a first-time buyer, you are charged a 5% penalty and may face the retroactive tax liability for the deduction.

Many banks and credit unions offer an Oregon first time home buyer savings account. Here are some popular options with current rates and important terms.

HomeStart Down Payment & Closing Cost Assistance | FHLB Des Moines

Federal Home Loan Bank of Des Moines offers a Home$tart program that lets eligible buyers receive up to $7,500 in closing cost and down payment assistance in Oregon. The first time home buyer assistance is offered by FHLB Des Moines through member financial institutions.

To qualify for the Oregon down payment assistance, your household income cannot exceed 80% of the area median income for the location where you are buying a home. You must complete a home buyer education course and qualify for a home loan with a participating lender. You will need a signed Purchase and Sale Agreement to enroll in the program.

As one of the best Oregon first time home buyer grants, the funds can be used toward your closing costs or down payment. It can also be used for repairs related to the purchase.

Note that you are required to repay a prorated portion of the grant if you sell your home within 5 years.

Funds for the Home$tart program tend to run out quickly. For 2022, the Home$tart funding schedule is $1.5 million on January 4, April 1, July 1, and October 3. If you are interested in the program, try to get qualified and approved as soon as possible after a funding date.

Down Payment Assistance | Oregon Housing & Community Services (OHCS)

OHCS offers Oregon down payment assistance for first-time buyers of up to $15,000. OHCS does not directly provide Oregon first time home buyer grants; instead, funds are awarded to several organizations to create or support their down payment assistance programs. Here are some of the most popular first time home buyer programs in Oregon for down payment assistance in the Portland metro area.

Hacienda Community Development – Camino a Casa

  • Washington, Clackamas & Multnomah counties
  • Home buyer education and coaching
  • First time home buyer grants and down payment assistance loans

Hacienda Community Development is a Latino Community Development Corporation that develops affordable housing and provides a range of educational resources and homeownership assistance. Their Camino a Casa program helps you prepare for homeownership through financial fitness workshops, one-on-one coaching, education, and funding.

Hacienda Community Development offers a 3:1 match savings plan to partially or completely cover your closing costs and down payment. You can also qualify for a larger down payment assistance loan.

Portland Housing Center

  • Columbia, Clackamas, Washington, Yamhill & Multnomah counties
  • Down payment assistance grants and loans
  • Savings match programs
  • First time home buyer loans (statewide)

Portland Housing Center offers the largest number of Portland, Oregon first-time home buyer programs. They serve the Portland area including surrounding communities with down payment assistance in the form of Oregon first time home buyer grants, matched savings, and second mortgages (down payment assistance loans). They also offer affordable loans for first time buyers and Community Land Trust (CLT) homes for sale.

Portland Housing Center first time home buyer loans are open to all qualified buyers in Oregon. Their affordable mortgages have a low, fixed rate with conventional, VA, and FHA loan options.

You can qualify for a variety of Oregon down payment assistance programs as an Oregon first time home buyer. To qualify for first time home buyer assistance, you must be a Portland Housing Center registered home buyer.

The Mortgage Assistance Program (MAP 100) offers qualified home buyers a closing cost and down payment assistance loan of up to $80,000. The loan can cover up to 20% of the home purchase price to eliminate the need for upfront mortgage insurance (FHA loans) or private mortgage insurance (PMI). First time home buyers can qualify with income up to 100% of the area median with a down payment of at least $500.

Individual Development Accounts (IDAs) are matched savings accounts. The Portland Housing Center IDA allows you to save up for a down payment over 6 to 24 months and receive up to $6,000 as a grant. Your savings are matched 5:1.

Proud Ground – Opening Doors

  • Washington & Multnomah counties
  • Affordable homes for sale through a Community Land Trust
  • Down payment grants

Opening Doors program is designed to help People of Color and lower-income families with affordable homeownership. It’s one of the largest Community Land Trusts (CLTs) in the country. When you buy a home through a CLT, you own your home, but the land is owned by the CLT and leased to you. Homeowners get a home at below-market price because the land is not included, and the CLT can control resale prices to make sure the community stays affordable.

Proud Ground offers homes for sale through the CLT and down payment assistance. To qualify, you must meet income limits based on your household size and complete an 8-hour first time home buyer class.

Down payment assistance grants are also occasionally available on a first-come, first-serve basis for qualified buyers.

 

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DevNW

  • Benton, Lane, Lincoln, Linn, Marion, Polk & Clackamas counties
  • Savings match program
  • Oregon down payment assistance

DevNW is a nonprofit founded in 2019 to revitalize neighborhoods, support small businesses, and help residents buy homes. They assist with viable paths to homeownership and home maintenance with affordable homes for sale and rent and first time home buyer assistance.

Their Individual Development Accounts (IDAs) offer a 5:1 match on your savings for one, two, or three years. The DevNW IDA savings match program requires an annual DevNW membership which is $75 for a household. To qualify, you must have household net worth under $20,000 and household adjusted gross income at or below 80% of the county median.

DevNW also offers down payment assistance for a first time home buyer in Oregon. Receive up to $15,000 through the Oregon first time home buyer program if you are at or below 100% of the area median income, meet for homeownership consultation, and complete the DevNW Homebuying Foundations class. You must buy a home in one of the counties they serve.

Oregon Home Loans for First Time Home Buyers

Your down payment and closing costs are just two of the barriers to homeownership as an Oregon first time home buyer. Getting approved for a mortgage that will be affordable in the long-run is also crucial. Here are Oregon first time home buyer loans that offer competitive, fixed interest rates and more flexible underwriting.

Oregon Bond Residential Loan Program | OHCS

Oregon Housing and Community Services (OHCS) issues mortgage revenue bonds that fund first time home buyer loans with below-market interest rates. Loans are made by OHCS-approved OregonBond lenders.

There are two Oregon first time home buyer loans available through the program:

  • Rate Advantage Home Loan offers below-market interest rates to maximize your purchasing power. Enjoy a very low fixed rate for lower mortgage payments and long-term savings.
  • Cash Advantage Home Loan. This option has a higher but still competitive interest rate with 3% cash closing cost assistance to reduce your cash-to-close amount.

To be eligible, you must be a first time home buyer with gross income that does not exceed the limit for your household size and county. The first-time buyer requirement is waived if you buy a home in a targeted area which includes parts of Portland, Medford, Eugene, and Albany and several counties and cities. There is a maximum purchase price based on the county.

Oregon Veteran Home Loan | Oregon Department of Veterans’ Affairs (ODVA)

Oregon is one of just 5 states with its own veteran home loan program which is separate from the federal VA mortgage. ODVA offers eligible Oregon veterans fixed-rate home loans on single-family homes up to the Fannie Mae limit. The benefit can be used up to four times during your life.

The ODVA home loan is a conventional mortgage not affiliated with the federal VA loan guarantee. Up to 95% loan-to-value mortgages are available but private mortgage insurance (PMI) will be required for loans exceeding 80% LTV. ODVA home loans have 15, 20, and 30-year terms with no income restrictions as long as you show capacity to repay the loan.

There are several benefits of an ODVA loan vs a federal VA loan:

  • Lower interest rates. ODVA funds the program with tax-free bonds. Rates are usually 0.5% to 0.75% lower than VA loans with rates and fees set by ODVA.
  • There is no funding fee. Federal VA loans have funding fees of 1.5% to 3.3% that is often rolled into the mortgage.
  • Mortgages are serviced by ODVA, not sold after the loan closes.
  • More flexible underwriting.

You do not need to be an Oregon resident to qualify, but you must buy a home in Oregon you intend to occupy as your primary residence. The maximum ODVA loan amount is $647,200 for 2022.

You can get started by downloading the ODVA Eligibility Application form to verify you are eligible. This form and documentation can then be submitted online.

Other Oregon Home Loans – National Mortgage Programs

Here are other options that are popular with first time buyers.

  • USDA loans require 0% down and no mortgage insurance. You can also use rent and utility payments if you do not have traditional credit history. These loans are for suburban and rural areas, but many areas in the Portland metro area quality.
  • FHA loans are very popular with first time home buyers because underwriting standards are looser in terms of credit. Your down payment can be as low as 3.5%. However, FHA loans are costly thanks to upfront mortgage insurance and an annual mortgage insurance premium (MIP) for the life of the loan.
  • VA loans are an excellent option for qualifying military members, families, and veterans with a low funding fee, no mortgage insurance, and no down payment required.
  • Fannie Mae HomeReady requires a down payment as low as 3% to buy a foreclosed home in as-is condition. You can apply to have 3% of your closing costs returned.
  • Freddie Mac HomeOne also requires a down payment of just 3%.
  • Conventional 97 loan is designed for first time buyers with a loan-to-value ratio up to 97% which means a down payment of just 3%.
  • Good Neighbor Next Door offers a 50% discount on select HUD properties in foreclosure for law enforcement, firefighters, EMTs, and pre-K to K teachers.
  • Habitat for Humanity offers affordable home loans and helps lower income households in need buy an affordable home through sweat equity.

Portland First Time Home Buyer Programs

As a Portland first time home buyer, you can qualify for a number of grants, second mortgages, home loans, and tax credits that make buying a home more affordable! Here are some of the best programs for a first time home buyer in Portland, Oregon.

  • Down Payment Assistance Loan (DPAL) program. Portland first time home buyers can qualify for a DPAL mortgage with favorable terms. The loan is a second mortgage funded by the Portland Housing Bureau and provides a loan of up to $100,000 at 0% interest for 30 years with forgiveness starting after 15 years. It can be used as a first mortgage instead.
  • Mortgage Credit Certificate (MCC) program. Sponsored by the City of Portland, this Oregon first time home buyer tax credit is worth 20% of the annual mortgage interest you pay to reduce your federal income taxes. The MCC is currently unavailable because city did not receive federal funds to continue the program in 2020, but it may return.
  • Home Purchase Assistance Program from the Portland Housing Bureau is currently unavailable but offers down payment assistance to first time home buyers in Portland.

Make sure you check the programs above that offer first time home buyer loans and grants in Multnomah County for additional programs in Portland!

If you’re buying a house in the Portland area outside the city limits, check for other first time buyer assistance programs. For example, the city of Corvallis offers a 0% loan of up to $20,000 to cover closing costs and your down payment! Springfield offers a loan of up to $7,000 toward your down payment which is interest-free and does not need to be repaid until the home is sold or transferred.

First Time Home Buyer Programs Oregon FAQs

Who is considered a first time buyer in Oregon?

An Oregon first time home buyer is someone who has not purchased or had ownership in a home in the past three years. If you recently owned a home with a former spouse, you may qualify if you have children or are a displaced homemaker.

What programs are available for first time home buyers in Oregon?

Oregon first time home buyer programs include up to $100,000 in zero-interest down payment assistance loans, up to $15,000 or more in forgivable first time buyer grants, and loans for first time buyers with low interest and flexible underwriting.

Are first time home buyer programs worth it?

An Oregon first time home buyer program can give you thousands in forgivable grant money or a 0% interest loan to cover your down payment and closing costs. You can also qualify for a loan with a low interest rate and terms designed for first time buyers. You generally only need to complete a course and meet general guidelines then work with your lender to take advantage of the program.

Ready for buying your first home in Oregon? Once you’re working with a lender to qualify for one of these programs and started the home buying process, give us a call at PDX Movers. We’re ready to make moving day as easy as possible so you can start enjoying the dream of homeownership!

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