First-Time Homebuyer Programs in Oregon

The down payment on a new home is often the biggest hurdle for first-time homebuyers. With an average home value of $495,042 in Oregon, you'd need $99,008 to avoid buying private mortgage insurance.

First-time homebuyer programs in Oregon help make homeownership more accessible. Some mortgages let you make a smaller down payment, but they often have income limits and require mortgage insurance. MoneyGeek explores several state-specific and government-backed first-time homebuyer programs for people from different financial backgrounds.

Oregon offers grants and loans to assist first-time homebuyers with down payments and closing costs. We compiled first-time homebuyer programs provided by Oregon Housing and Community Services (OHCS) to help you find the best option for your needs and situation.

The Oregon Bond Residential Loan Program provides fixed-rate loans to help low and moderate-income residents buy homes. Borrowers can choose between these mortgage options:

• Cash Advantage: Offers 3% of the loan amount for closing costs (not for FHA-required down payments)
• Rate Advantage: Features below-market fixed rates for lower monthly payments

The Flex Lending Program provides fixed-rate first mortgages and flexible down payment assistance (DPA). DPA options include a forgivable "silent" second mortgage with no payments or a repayable second lien. These funds can cover up to 100% of closing costs, including down payments, prepaid items and fees, reducing out-of-pocket expenses for homebuyers.

The Down Payment Assistance Program helps low to moderate-income buyers by providing funding through statewide organizations. It can cover up to 100% of down payment and closing costs, using silent forgivable loans or amortizing second liens. Funding comes from document recording fees and some jurisdictions' Construction Excise Taxes.

In addition to Oregon's statewide first-time homebuyer programs, some cities offer their own assistance to help residents achieve homeownership. The table below highlights a city in Oregon with a program for first-time homebuyers.

Oregon offers zero-down-payment loan programs that don't require a down payment when purchasing a home. USDA and VA loans are government-backed loans with this benefit.

USDA loans make homeownership more accessible for those in eligible rural communities. The U.S. Department of Agriculture issues these loans through its Rural Development Guaranteed Housing Loan program.

USDA loans offer several benefits to eligible homebuyers. They require no down payment, reducing the upfront cost. They also offer lower interest rates and mortgage insurance costs than conventional loans, making monthly payments more affordable.

To qualify for a USDA loan, the property must be 2,000 square feet or below and located in a USDA-eligible rural area with a population of less than 35,000. Income limits vary by location. For instance, in Coos County, Oregon, the income limit for a four-person, low-income household is $64,700, whereas in Umatilla County, Oregon, it's $68,250.

VA loans from the US Department of Veterans Affairs assist veterans, active-duty service members and eligible surviving spouses in purchasing homes. These loans offer a range of benefits that make homeownership more accessible for those who have served the country.

VA loans come with several advantages, including a no-down payment option. They don't require private mortgage insurance (PMI), reducing monthly payments. VA loans also typically offer lower interest rates than private loans. As of November 2024, the APR for a 15-year fixed-rate VA loan in Oregon is 6.06%, while a 30-year fixed-rate VA loan has an APR of 6.21%.

Eligibility depends on several factors, including service length or commitment, duty status and character of service. Applicants must also meet location-based income limits and have a valid certificate of eligibility (COE).

First-time homebuyers in Oregon can access low-down-payment loan programs that allow them to finance their homes with a down payment of 3.5% or less. These programs include conventional, FHA and FHA 203(k) loans.

FHA and conventional loans are often compared, as they're the most common types of mortgages. FHA loans require at least a 3.5% down payment, while conventional loans can require as low as 3% for first-time homebuyers. Conventional loans typically have stricter credit score and debt-to-income ratio requirements, making FHA loans more accessible to borrowers with lower credit scores.

As of November 2024, the APR for a 15-year fixed-rate conforming loan in Oregon is 6.04%, while a 15-year fixed-rate FHA loan has an APR of 6.56%. FHA loans often have higher APRs due to more fees and costs associated with government-backed borrowing.

Use our FHA vs. conventional loan calculator below to compare both mortgage programs and determine the best option.

We answered frequently asked questions about first-time homebuyer programs in Oregon to help you choose the best option and move closer to homeownership.

Explore additional MoneyGeek resources for first-time homebuyers in Oregon to help you with the homebuying process.