What to know about buying a house in Oregon
Home prices in Oregon are undeniably high which can present a real challenge for first-time home buyers in the state. But make sure you explore all your options. Oregon offers a wide variety of programs that can help first-time buyers, from education and counseling to financial assistance. Here’s how to get started.
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 was $480,900 in February 2023, according to Redfin. That was an 1.4% decrease year over year. Oregon may not have the highest average home price in the U.S., but it’s still higher than the average nationwide.
That can make it difficult for an Oregon first-time home buyer to save enough for a down payment and closing costs. Read on to discover programs that might provide you with cash assistance.
Oregon home buyer stats
|Average Home Listing Price in OR1||$480,900|
|Minimum Down Payment in OR (3%)||$14,427|
|20% Down Payment in OR||$96,180|
|Average Credit Score in OR2||731|
|Maximum OR Home Buyer Grant3||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% 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: Backed by Freddie Mac or Fannie Mae. 3% down payment and 620 minimum FICO score. You can usually stop paying mortgage insurance after a few years once you reach 20% home equity
- FHA loan: Backed by the Federal Housing Administration. 3.5% down and a 580 minimum credit score. But you’re on the hook for mortgage insurance premiums (MIP) until you refinance to a different type of mortgage, move, or pay off your loan
- VA loan: Only for veterans and active-duty service members. 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
- Oregon Housing and Community Services (OHCS) loan: May include competitive interest rates and can be used with down payment assistance. More information on OHCS fixed-rate loans below
Note that government loan programs (including FHA, VA, and USDA home loans) require you to buy a primary residence. That means you can’t use these loans for a vacation home or investment property.
In addition, most programs let you use gifted money or down payment assistance (DPA) to cover your down payment and closing costs. Depending on your mortgage loan, you could potentially get into a new house with minimal cash out of pocket.
If you’re unsure which program to choose for your first mortgage, 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)4 offers the Oregon Bond Residential Loan program. This “provides competitive rates helping eligible families increase their home purchasing power and keep their monthly house payments affordable.” If you qualify, you can expect generous homeownership assistance.
OHCS has two main home buyer assistance programs.
- Cash Advantage: Borrowers receive competitive interest rates and up to 3% of their loan amount to use towards closing costs
- Rate Advantage: Borrowers get a competitive interest rate and lower mortgage payment, 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-approved list5
- Purchase a single-family home, condo, or manufactured home
- Meet local purchase price limits
- Meet household income limits set by the OHCS
- Complete a home buyer education course
- Use a housing counselor
Those conditions are typical for down payment assistance programs. And others you find will likely have similar requirements. To find out whether you qualify, speak to a housing counselor or approach one of the lenders on the approved list.
Oregon Flex Lending Program
The Flex Lending Program uses down payment assistance (DPA) to help low- to moderate-income borrowers, including those in rural areas, obtain funds for a down payment and closing costs to buy a home.
The Flex Lending Program provides a fixed-rate first mortgage in combination with a second mortgage in the form of either a silent forgivable second lien or an amortizing repayable second lien. Eligible buyers may be able to receive 4% or 5% of the first mortgage loan amount as down payment assistance.
Oregon first-time home buyer grants
First-time buyers may qualify for down payment assistance loans or grant money to help with their closing costs. There are two homeownership programs to note in Oregon; one is offered by the state government and the other is run by OHCS.
OHCS Down Payment Assistance
The OHCS says “Eligible homebuyers who have completed Homebuyer Education and the recommended coaching from a qualified organization, may qualify for down payment and/or closing costs assistance.”6 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.
First-Time Home Buyer Savings Account
The Oregon Department of Revenue offers tax-advantaged savings accounts that first-time home buyers can use to save for a down payment on a single-family home.
Cash you put into that savings account can be used towards a down payment, closing costs, real estate agent commissions, and/or home appraisal fees. And you can deduct any deposits or interest earnings from your taxable income for up to 10 years. You can learn more about this program in its online brochure.
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: home prices there remained flat over the 12 months ending in February 2023. Similarly, Eugene did not experience any changes in home price appreciation over that same period.
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 statewide one.
Portland first-time home buyers
The median list price in Portland was $525,000 in February 2023, according to Realtor.com. That was flat year over year.
At that median price, your down payment options might fall between:
- $15,750 for 3% down payment
- $105,000 for 20% down payment
The City of Portland also has a potentially generous down payment assistance loan program. Assuming your household income is at or below 100% of Portland’s current Area Median Income (AMI), adjusted for family size, you could get up to $80,000 across the city or $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 more is forgiven in succeeding years. At the end of year 30, when your primary mortgage is paid off, you owe nothing on the down payment assistance loan.
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. Check out the resource section below for more details.
Salem first-time home buyers
The median list price in Salem was $433,000 in February 2023, according to Realtor.com. That was up 6.4% year over year.
If you want to buy a home at that median price, your down payment options might fall between:
- $12,990 for 3% down payment
- $86,600 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 does not provide details or eligibility criteria. So call the program at (503) 588-6178 to learn more.
Eugene first-time home buyers
The median list price in Eugene was $475,000 in February 2023, according to Realtor.com. That was flat year over year.
If you want to buy a home at that median price, your down payment options might fall between:
- $14,250 for 3% down payment
- $95,000 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 of 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
- Oregon Flex Lending Program
- Home repairs: Money for home improvements and repairs
Oregon home purchase programs by area
You can also check out the 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, get personalized rate quotes from at least three mortgage lenders. Don’t just look at advertised rates online. 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.
1Source: Redfin.com Oregon Housing Market Report
2Source: Experian.com study of 2021 and 2020 data
3Based on a review of the state's available DPA grants at the time this was written
4Oregon Housing and Community Services