What to know about buying a house in Oregon
Being a first-time home buyer in Oregon can feel like running uphill. Because home prices in the state are undeniably high. And saving enough to become a homeowner can be a real challenge.
But don’t despair. Because Oregon has a mountain of help for you, including home buyer education and counseling along with state and local mortgage programs.
And, best of all, you could be in line for serious cash assistance to top up your down payment savings.
In this article (Skip to ...)
- OR home buyer overview
- Home loan options
- OR home buyer programs
- First-time buyer grants
- Buying in Oregon’s cities
- OR mortgage rates
Oregon home buyer overview
The median home sale price in Oregon in September 2021 was $510,000, according to Redfin. That may not be the highest statewide price in America, but it’s much higher than the average nationwide.
And that can make it difficult for an Oregon first-time homebuyer to save enough for a down payment and closing costs. So read on to discover programs that might provide you with cash assistance.
|Oregon Home Buyer Overview|
|Average Home Listing Price in OR||$510,000|
|Minimum Down Payment in OR (3%)||$15,300|
|20% Down Payment in OR||$102,000|
|Average Credit Score in OR1||727|
|Maximum OR Home Buyer Grant2||Up to $100,000 forgivable loan in Portland only|
Down payment amounts are based on the state's most recently available average home sale price. “Minimum” down payment assumes 3% down on a conventional mortgage with a minimum credit score of 620.
If you're eligible for a VA loan (backed by the Department of Veterans Affairs) or a USDA loan (backed by the US Department of Agriculture), you may not need any down payment at all.
First-time home buyer loans in Oregon
If you’re a first-time home buyer in Oregon with a 20% down payment, you can get a conventional loan with a low interest rate. And you never have to pay for private mortgage insurance (PMI).
Of course, few first-time buyers have saved enough for 20 percent down. But the good news is, you don’t need that much. Not by a long shot.
Borrowers can often get into a new home with as little as 3% or even 0% down using one of these low-down-payment mortgage programs:
- Conventional 97 — From Freddie Mac or Fannie Mae. 3% down payment and 620 minimum credit score. You can usually stop paying mortgage insurance after a few years
- FHA loan — Backed by the Federal Housing Administration. 3.5% down and a 580 minimum credit score. But you’re typically on the hook for mortgage insurance until you refinance to a different type of mortgage, move, or pay off your loan
- VA loan — Only for veterans, active military members, reservists, and National Guard. Zero down payment is required. Minimum credit score varies by lender but often 620. No ongoing mortgage insurance after closing. These are arguably the best mortgages available, so apply if you’re eligible
- USDA loan — For those on low-to-moderate incomes buying in designated rural areas. Zero down payment required. Credit score requirements vary by lender but often 640. Low mortgage insurance rates
- OHCS loan — May include competitive interest rates and can be used with down payment assistance. More information below
Note that most of these programs require you to buy a primary residence. That’s a home you’ll live in full-time, not a vacation home or investment property.
Depending on the mortgage loan you choose, you could potentially get into your new house with minimal cash out of pocket.
These programs even let you use gifted money or down payment assistance (DPA) to cover the down payment and closing costs.
If you’re not sure which program to choose for your first mortgage loan, your lender can help you find the right match based on your finances and home buying goals.
Oregon first-time home buyer programs
Oregon Housing and Community Services (OHCS) offers the Oregon Bond Residential Loan program. This “helps low and moderate-income families in Oregon buy their first home.”
If you qualify, you can expect some very generous assistance. Indeed, it boasts that you might even get a mortgage “with as little as zero cash down payment.”
OHCS has two main programs. Cash Advantage helps with your down payment. And Rate Advantage gets you a lower mortgage rate, which means you can afford a better home.
In order to qualify for an OHCS mortgage, you must:
- Be an Oregon first-time home buyer
- Choose a participating lender from the OHCS’s approved list
- Complete a home buyer education course
- Have a household income that’s at or lower than the caps set by the OHCS
- Use a housing counselor
To find out whether you qualify, speak to a housing counselor or approach one of the lenders on the approved list.
Those conditions are common for down payment assistance programs. And others you find will likely have similar ones. Of course, income limits and approved lenders may vary by program
Oregon first-time home buyer grants
The OHCS says “Eligible homebuyers who have completed Homebuyer Education and the recommended coaching from a qualified organization, may qualify for up to $15,000 in down payment and/or closing costs assistance.”
You can expect the conditions listed above to apply. You may access OHCS funds through an approved lender and from a range of local programs that are listed at that link.
But the OHCS doesn’t reveal some key details. Is this a grant or a loan? If it’s a loan, do you have to repay it or is it forgiven after x years? You’ll have to pose those questions to a counselor or approved lender.
Buying a home in Oregon’s major cities
None of Oregon’s Big three cities has low home prices. Unsurprisingly, the most expensive was Portland. But there’s some good news for those buying there: It had the slowest increase in home prices over the 12 months ending in August 2021.
Eugene and Salem had lower prices but higher rates of price increases.
Whichever city (or county) you’re buying in, you should check out local down payment assistance programs. Because one of those may offer you better help than the OHCS’s statewide one.
Portland first-time home buyers
The median list price in Portland was $539,000 in August 2021, according to Realtor.com. That was up 6.8% year over year.
At that median prices, your down payment options might fall between:
- $16,170 for 3% down payment
- $107,800 for 20% down payment
The City of Portland also has a potentially generous down payment assistance program.
Assuming your household income is at or below 100% of Portland’s current Area Median Income (AMI), adjusted for family size, you can get up to $80,000 across the city. And up to $100,000 in certain targeted areas.
This comes as a 30-year loan (second mortgage) with a 0% interest rate and no monthly payments. If you sell the home, move out, refinance, transfer, or pay down your main mortgage during the first 15 years, you have to repay the loan in full. But 50% is forgiven at the end of year 15. And then more is forgiven in succeeding years until, come year 30 when your main (“first”) mortgage is fully paid down, you owe nothing.
That’s a good deal if you’re going to stay in residence for 15 years, and a great deal if you stay for 30 years. Click that link above for more details.
Salem first-time home buyers
The median list price in Salem was $389,900 in August 2021, according to Realtor.com. That was up 15% year over year.
If you want to buy a home at that median price, your down payment options might fall between:
- $11,700 for 3% down payment
- $77,980 for 20% down payment
The City of Salem says that its HOME Investment Partnership Program can assist with home buyer acquisition costs. And that help can come in the form of a grant, deferred-payment loan, or below-market-rate loan.
However, it provides no details nor any eligibility criteria. So call the program on (503) 540-2494 for more details.
Eugene first-time home buyers
The median list price in Eugene was $440,000 in August 2021, according to Realtor.com. That was up 17.3% year over year.
If you want to buy a home at that median price, your down payment options might fall between:
- $13,200 for 3% down payment
- $88,000 for 20% down payment
Some sources say the City of Eugene has a down payment assistance program. However, if that’s true, we weren’t able to find it on the city’s website.
We’d suggest you call or email for more information. But the city gives only a street address under “contact us” on its website: City of Eugene, Oregon, City Manager’s Office, 101 West 10th Avenue, Suite 203, Eugene, OR 97401.
Where to find home buying help in Oregon
All the organizations we’ve listed above should provide advice freely to any first-time home buyer in Oregon or their local area.
In addition to our selection, the U.S. Department of Housing and Urban Development (HUD) provides a few lists for statewide, regional, and local resources.
Statewide and regional home buyer programs in Oregon
- Oregon Housing and Community Services — Homebuyer programs, including down payment and closing cost assistance
- Habitat for Humanity — Through volunteer labor, builds and rehabilitates houses for families in need
- USDA Rural Development Office — Homebuyer programs in rural communities
- Housing Counseling Resources
- Oregon Department of Veterans Affairs
- Home repairs — Money for home improvements and repairs
Oregon home purchase programs by area
Also, click the link to discover Oregon Realtors’ list of down payment assistance programs by county.
What are today’s mortgage rates in Oregon?
You can see today’s live mortgage rates in Oregon here.
When you’re ready to start the home buying process, make sure you get personalized rate quotes from at least three mortgage lenders.
Don’t just look at advertised rates online; actually apply for preapproval and compare the interest rates and fees you’re offered. That’s the only way to know you’re getting the best deal possible on your new home loan.
1 Source: Experian.com 2021 study of 2020 data
2Based on a review of the state's available DPA grants at the time this was written