Oregon First-Time Home Buyer Programs of 2021

By NerdWallet 
Updated
Edited by Amanda Derengowski
Oregon First-time Home Buyer Programs of 2018

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Soaring Northwest prices can make purchasing a home in the Beaver State daunting for first-time home buyers. There’s help, though, whether you have your eye on a bungalow in Bend, a farmhouse in Fossil or a pied-a-terre in Portland’s Pearl District.

National programs make owning a first home more affordable. And Oregon Housing and Community Services’ below-market-rate mortgages and down payment and closing cost assistance programs offer still other avenues. You’re considered a first-time buyer if you have not owned a home in three years.

Here’s what to know about national and OHCS state programs and how to qualify.

National first-time home buyer programs

First-time home buyers in any state may use these national mortgage programs to make homeownership more affordable.

Conventional mortgage

Best for:

Low down payments, limited mortgage insurance premiums

What you need to know:

A conventional mortgage is a home loan that isn’t guaranteed or insured by the federal government. Conventional mortgages that conform to the requirements set forth by Fannie Mae and Freddie Mac allow down payments as low as 3% for first-time buyers or lower-income home buyers. Unlike FHA loans, conventional loans allow borrowers to eventually cancel their mortgage insurance or avoid mortgage insurance altogether if they put at least 20% down.

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VA loans

Best for:

Military, low down payments

What you need to know:

The U.S. Department of Veterans Affairs helps service members, veterans and surviving spouses buy homes. VA loans are especially generous, providing competitive interest rates, often requiring no down payment or mortgage insurance. Although there is no official minimum credit score, most VA-approved lenders require scores of at least 640.

FHA loans

Best for:

Low credit score, low down payments

What you need to know:

This is the go-to program for many first-time home buyers with lower credit scores. The Federal Housing Administration allows down payments as low as 3.5% for those with credit scores of 580 or higher. The FHA will insure loans for borrowers with scores as low as 500 but requires a 10% down payment for a score that low. Mortgage insurance is required for the life of an FHA loan and cannot be canceled.

USDA loans

Best for:

Low down payments, rural home buyers

What you need to know:

A USDA home loan is a zero-down-payment mortgage for eligible rural and suburban home buyers. USDA loans are issued by the U.S. Department of Agriculture through the USDA Rural Development Guaranteed Housing Loan Program. There are income limitations, which vary by region. Applicants with credit scores of 640 or higher receive streamlined processing. Those with scores below that must meet more stringent underwriting standards.

OHCS highlights and eligibility requirements

Oregon sells bonds through its Oregon Bond Residential Loan Program to help finance its Rate Advantage and Cash Advantage Home Loans, below-market-interest mortgages for eligible first-time home buyers.

The program offers below-market fixed interest rates to help first-time home buyers qualify for homes with affordable monthly payments. While details may vary by program and county, here are some general guidelines. A low-rate mortgage can be a conventional mortgage with 20% down or an FHA or USDA home loan.

Highlights

  • Below-market interest rates for first-time borrowers.

  • Down payment assistance grants of up to $15,000.

  • 3% closing-cost assistance grant with a lower-rate mortgage.

Eligibility

  • Limits on borrower income and purchase price vary by county and target area.

  • First-time home buyer requirement waived for homes purchased in target areas.

  • Complete home buyer education before mortgage closing.

OHCS first-time home buyer loan programs

Oregon RateAdvantage Home Loan

Best for:

Low mortgage rates

What you need to know:

OHCS’ lowest fixed interest rates are offered with the Rate Advantage mortgage. Borrowers may use a FHA or USDA loan, or a conventional mortgage with a 20% down payment.

Oregon Cash Advantage Home Loan

Best for:

Closing cost assistance

What you need to know:

Cash Advantage Home Loans with a below-market interest rate are available to eligible first-time home buyers. Cash assistance equal to 3% of the mortgage amount can be applied toward closing costs. Limits on income and purchase price vary by county.

This assistance is in the form of a grant, increasing the mortgage interest rate slightly. FHA, USDA loans or conventional mortgages with a 20% down payment may be used. The assistance may not be used to fund the minimum investment required with an FHA loan.

Oregon Down Payment Assistance

Best for:

Down payment assistance

What you need to know:

Down payment assistance grants of up to $15,000 are available from qualified local organizations. Grant amounts and requirements vary by provider. Applicants must complete homeownership education and follow-up counseling. Income limits apply. The funds may be used with any type of mortgage.

Summary: 2021 OHCS first-time home buyer programs

  • Oregon RateAdvantage Home Loan for OHCS' lowest interest rates on a fixed-rate loan.

  • Oregon Cash Advantage Home Loan for below-market interest rates paired with closing cost assistance.

  • Oregon Down Payment Assistance for a grant of up to $15,000 to put towards your home purchase.

If one of these OHCS programs seems right for you, you can get started by contacting an approved lender to get details and apply. Lenders can identify target areas and help assess your eligibility.

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