How To Become A First-Time Home Buyer In Oregon

Are you a fan of gorgeous landscapes and endless water activities? Does approximately 363 miles of coastline sound appealing to you when you envision your first home? Mountains, lakes, beaches and a plethora of other desirable traits make The Beaver State a desirable place to call home.

Here, we’ll outline everything a first-time home buyer in Oregon needs to know about all the various loan and assistance programs they should consider on their way to homeownership. This includes national loan types, Oregon-specific loans, borrower-specific loans and down payment assistance programs.

Buying Your First Home In Oregon

After a quick search for Oregon homes for sale, it becomes pretty clear that buying your first home there won’t likely be cheap. Budget is one of the most common barriers for first-time home buyers throughout the country, but it’s even more of an issue in desirable locations like Oregon.

Luckily, there are a number of national first-time home buyer programs, grants and resources available to you no matter where in the country you’re looking. In addition, there are programs available specific to the state of Oregon as well as programs specific to different counties within the state.

Aside from geography, the type of borrower you are can open the doors to a number of other programs both nationally and Oregon-specific, too.

While we dive into a few of the programs you may want to consider, keep in mind that it can be a lot to navigate on your own. You may want to consider finding a housing counselor in Oregon who can help you go over your options.

Who Is A First-Time Home Buyer?

Before we get into programs you might want to check out, let’s define what we mean by first-time home buyer. For the purposes of this article, as well as most of the programs covered, a first-time home buyer is defined as a person purchasing a primary residence who has not owned a residential property in the last 3 years. This is relevant to the do’s and don’ts of buying your first house because you don't want to waste time investing in first-time home buyer programs only to realize you don’t qualify.

Conversely, you don’t want to miss out on programs or benefits like the first-time home buyer tax credit of 2021 and other tax credits for homeowners just because you didn't realize that you qualify as a first-time home buyer.

What National Home Loan Programs Are Available To Oregon First-Time Home Buyers?

Before we zoom in on Oregon first-time home buyer programs, let’s look at a few national resources that might benefit you.

The Fannie Mae HomeReady^® and Home Possible^® from Freddie Mac loan program offers mortgages to qualified borrowers that feature low down payment amounts (3%) as well as allowing funds from friends and family that can be used to cover down payments and closing costs.

To qualify, borrowers must take a homeownership education class. In addition, their income must be 80% or less than the area median income in the area they are purchasing a home in. To see what the income requirements are in Oregon (or anywhere in the country), you can use this area median income lookup tool.

Our friends at Rocket Mortgage^® have some special deals on HomeReady and Home Possible given that rates remain elevated. Which option is right for you will come down to whether you like having the money upfront to save on closing costs and down payment or monthly payment savings.

Welcome Home RateBreak is a 2-1 temporary interest rate buydown covered by Rocket Mortgage.¹ For the first year of your term, your rate will be 2% lower than your note rate. In the second year, your payment is 1% lower. Your normal rate kicks in for the third year. This could give you the opportunity to save on your payment now and refi if rates are lower down the line.

The other option is to take a pricing adjustment of 1% of the loan amount up to $3,500. If the loan is below $200,000, the credit will be $2,000 as opposed to 1%. If you make 50% or less of the area median income, you qualify for a $2,500 grant. This could help you save on down payment and closing costs.

FHA loans are another good option to consider no matter where in the country you’re looking to buy a house. FHA loans have the benefit of being backed by the Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD). This means if you default on your loan, the government will secure it. Lenders like this because they aren’t left holding the bag, so to speak.

Due to this reduction in risk for lenders, they can offer credit score, income, and down payment requirements that are less restrictive than other types of loans. FHA loans can be obtained with a down payment amount as low as 3.5% and a borrower credit score as low as 500, depending on the lender. For example, our sister company Rocket Mortgage requires a minimum credit score of 580. The less restrictive requirements of this type of loan helps HUD fulfill its goal to make housing more affordable for low- to moderate-income families.

If you’re a first-time home buyer or refinancing without taking cash out, the Freddie Mac HomeOne loan is another option to consider. This loan requires only 3% down and has no geographical or income requirements, but it does have home buyer education requirements for first-time home buyers.

The Good Neighbor Next Door program from HUD offers a huge discount if you’re in a specific profession. Teachers (pre-k through 12th grade), emergency technicians, law enforcement officers and fire fighters can receive a 50% discount on the sales price of their home as long as they commit to live there for at least 3 years after they purchase it. There are geographic restrictions and a low inventory of homes that changes frequently, so check the listings for your state.

Habitat for Humanity is also a good resource to investigate when purchasing a home if you have low to moderate income. HUD defines this status as incomes that are 60% or less than the median income of the area they’re looking for a home. Further eligibility requirements vary based on the individual community you’re looking to live in, so dig deeper with some local level research if you think you may qualify.

The government also backs USDA loans, which provide competitive interest rates and low down payment requirements. These are offered to low- or moderate-income Americans and are very location-specific. Visit the USDA’s eligibility site to see if a home you’re interested in qualifies.

The U.S. The Department of Veteran Affairs (VA) backs VA loans, which are intended to provide low interest and no down payment loans to veterans, active military service members and qualifying surviving spouses.

What Are The First-Time Home Buyer Programs Available In Oregon Only?

Now let’s zoom in on Oregon to cover some first-time home buyer programs specific to the state. The first step is to familiarize yourself with Oregon Housing and Community Services (OHCS).

OHCS is a housing agency that provides financial support and programs geared toward creating quality, affordable housing for low- and moderate-income Oregon residents. Recently, OHCS has created a Statewide Housing Plan that provides a glimpse into the current affordable housing issues facing the state and a 5-year vision for how OHCS is going to help create improvements.

First-Time Home Buyer Savings Accounts

The Oregon Department of Revenue offers a savings account for first-time home buyers that allows them to deduct the money they’re saving to buy a home in Oregon from their taxable income. Individuals can deduct up to $5,000 annually for up to 10 years. Meanwhile two people who file taxes jointly can deduct up to $10,000 annually.

Down Payment Assistance Programs And Help With Closing Costs

The Home Ownership Assistance Program (HOAP) and Construction Excise Tax (CET) fund local organizations in specific communities throughout the state to provide future homeowners with down payment and closing cost assistance. The maximum amount available to eligible home buyers is the lesser of 20% of the home’s purchase price or $60,000. The amount of assistance and eligibility requirements vary depending on the area and local organization.

Loans From The Portland Housing Center

The Portland Housing Center (PHC) offers fixed-rate loans with appealing terms to people looking to purchase property in Portland, Oregon. Fees and interest rates are low, and they offer conventional, FHA and VA loans.

What Programs Are Available To Certain Groups Within Oregon?

Throughout the state of Oregon, there are resources available to you depending on the type of buyer you are as well as the area you are interested in living. These include county-specific programs, programs for lower income buyers, programs for Portland first-time home buyers, programs for rural Oregonians and programs for veterans.

County-Specific Programs

Oregon offers a number of county-specific home buyer assistance programs (check out the full list here). As an example, if you’re looking to buy a home in Baker, Oregon, you might want to check out the Community Connection of Northeast Oregon. They offer a plethora of assistance programs geared toward helping Oregonians buy a home as well as programs geared toward helping homeowners facing hardships keep their homes.

Programs For Lower Income Buyers

The Oregon Homeowner Stabilization Initiative’s (OHSI) programs help Oregonians find and stay in homes with a few great programs. These include financial counseling, foreclosure prevention programs, home buying counseling programs, reverse mortgage counseling, homebuyer education workshops, and a homeless drop-in center.

Programs For Portland First-Time Home Buyers

In addition to the aforementioned loans from The Portland Housing Center (PHC), there is also a down payment assistance program specific to the city of Portland. Funded by the Portland Housing Bureau (PHB), the Down Payment Assistance Loan (DPAL) assistance works as a second mortgage and is used in tandem with the loan you use to buy a home within the city limits of Portland.

Programs For Rural Oregonians

The USDA Rural Development Office in Oregon offers a variety of programs.  These include rural business development grants, single family home loans, renewable energy grants and value-added producer grants (for farmers).

Programs For Veterans

The Oregon Department of Veterans Affairs (ODVA) offers loans not associated with federal VA loans. In fact, the loans offered by ODVA are conventional loans. The program details are pretty extensive and the requirements are different from federal VA loans, so read up before you apply.

The Bottom Line: Become a First-Time Home Buyer in Oregon

When it comes to deciding where to buy your first home Oregon could be a great choice. The combination of vibrant cities and majestic landscapes is pretty hard to beat. This dream location doesn’t have to be out of reach. Investigate the first-time home buyer assistance programs we’ve outlined here and see if it’s possible now or in the future. Ready to get moving? Check out our Home Buyer’s Guide and start your mortgage approval with our friends at Rocket Mortgage today!

¹ The 2-1 temporary buydown offer is funded by Rocket Mortgage. Clients will receive an effective rate reduction of 2% below the note rate in the first year and 1% below the note rate in the second year. Offer only valid on HomeReady® or Home Possible® loans. Maximum loan amount of $350,000. Buydown funds may not be redeemed for cash or credit and are nontransferable. This offer cannot be retroactively applied to any loans in process or closed loans. Offer is subject to changes or cancellation at any time at the sole discretion of Rocket Mortgage. Additional restrictions/conditions may apply. This is not a commitment to lend.