Oregon First Time Home Buyer – 2022 Loan Programs
Are you a first time home buyer looking to purchase a home in Oregon? On this page you can learn about the different types of mortgage programs that are available to first time home buyers. You may also view the different down payment assistance programs that are currently being offered in Oregon.
Oregon First Time Home Buyer Loans
Below are some of the potential mortgage options that may be available to you.
Types of Mortgages:
- Conventional Loans – Conventional loans offer the best loan terms to borrowers with good or excellent credit (620 or higher credit score), 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 rural 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 mortgage that does not meet the conforming loan limits is a jumbo loan. You can lookup the 2022 conforming loan limits for your county using this conforming loan limits lookup tool. If you want to buy a more expensive home, and have the income to qualify, jumbo lenders offer loan amounts up to $5,000,000.
- Non-Prime Loans – If you do not qualify for any of the above types of loans, you may consider a non-prime loan. These programs are helpful to people with a variety of credit issues (such as low credit scores, or a recent bankruptcy). Non-prime loans do not require any waiting periods after a bankruptcy, and most non-prime lenders allow credit scores as low as 500. Regardless of your situation, you should consider learning more about non-prime loans if you do not qualify for any of the other types of mortgages featured above.
These are some of the mortgage options that are available to first time home buyers.
Would You Like to Get Pre-Approved for a Mortgage?
Click Here to Get Pre-Approved for a Home Loan
Upon receiving your request, we will match you with a mortgage lender that offers first time home buyer loans in Oregon. You will be provided with a free consultation, and the opportunity to get pre-approved for a mortgage.
Oregon Down Payment Assistance Programs
First time home buyers in Oregon may be eligible to receive down payment assistance. This includes programs offered throughout the entire state, as well as several locally offered programs. You can learn more about the statewide programs below.
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.
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!
Are You Eligible for Down Payment Assistance?
A mortgage specialist can help you check your eligibility for down payment assistance. If you would like to receive some help checking what down payment assistance programs you may be eligible for, fill out this form. We will match you with a mortgage lender that can help you see if you qualify for any down payment assistance.
First Time Home Buyer Questions
Below are some of the most frequently asked questions about first time home buyer loans:
How much do I need for a down payment?
The minimum down payment requirement will depend on the type of mortgage program. USDA and VA loans do not require any down payment. FHA loans only require a 3.5% down payment (and allow down payment assistance to be used). Conventional loans typically require either 3% or 5% down. The minimum down payment for a non-prime loan is usually at least 10% (or higher).
What is the maximum loan amount that I can qualify for?
The amount that you will be allowed to borrow will depend mostly on your income, as well as the particular type of loan you are interested in. There are maximum loan limits for each type of mortgage program which are set at the county level. Conforming loan limits are the maximum loan amounts allowed for conventional mortgages. FHA loans have their own loan limits. This is not necessarily how much you can borrow though, but the maximum amount allowed in your location. The amount that you can personal qualify for will be based upon your income, and how much debt you have. For most loans, your monthly mortgage payment, along with your monthly debts may not exceed 43% of your income.
Can I buy a home without a real estate agent?
It depends on your state and the type of loan program. For some states, you must use an agent. In other states, you are not required to use a real estate agent for many loan program, such as conventional mortgages. However, some loan types require that you use a real estate agent regardless of your location, such as USDA loans.
Are there mortgage loan options for borrowers with bad credit?
Yes, both FHA loans and non-prime loans are available to borrowers with lower credit score, and other credit challenges. The minimum credit score required for an FHA loan is 500. For non-prime loans, there are lenders that allow a borrower to have a credit score even below 500. Non-prime loans also do not have any waiting periods after a bankruptcy.
Can I buy a home if I owe tax debt?
For government-backed loans, such as FHA, VA, and USDA loans, you can buy a home with tax debt as long as you have made a payment plan with the IRS, and are not behind on the payments. Any federal debt must be in good standing in order to get a government-based mortgage. If your tax debts have moved into the status of a tax lien, this will prevent you from getting a home loan until it is resolved.
Can I buy a home if I have student loans?
As long as you are not delinquent on the student loan payments, and the monthly payments do not cause excessive debt-to-income ratios, you can still get a mortgage.
Can I buy a home without my spouse?
A common question is if you can buy a house without your wife or husband. The short answer is yes. There are numerous reasons someone may want to exclude their spouse from a mortgage application, such as lower credit, lack of job history or income, or one spouse having excessive debt that could prevent an approval. You may be able to qualify and get a home loan without your spouse.
How can I find out if I qualify for a mortgage?
A loan representative can help you determine what mortgage programs you may qualify for, and also check your eligibility for down payment assistance. If you would like to receive a free consultation, we can help match you with a mortgage lender that offers first time home buyer loans in Oregon.