Despite the slump in the housing market over the last several years home ownership is still the American dream for lots of our country's young people. In the state of Oregon, homeownership is alive and well, as is that dream. Yet many first time home buyers are searching not only for that perfect house, but also first time home buyer programs that will help make the purchase possible.
In Oregon there is both good news and bad news. The bad news is that there aren't as many first time home buyer assistance programs in that state as there are in some others. But the good news is that the programs that do exist are thriving.
Oregon Housing and Community Services
Most states have a government agency assigned the task of overseeing housing opportunities. In most cases these agencies don't necessarily provide direct assistance through loans and down payment programs. Rather, they are the collection point and organizational structure used to administer federal grants, state grants, and private funding sources. In Oregon that agency is known as Oregon Housing and Community Services (OHCS).
OHCS is a relatively new agency when compared with other states. It was formed in 1991 when the state government decided to merge the Department of Community Services and the state Housing Authority. Since then, the agency has assisted thousands of Oregon families in purchasing their first homes. Currently OHCS administers two programs through certified participating lenders.
Oregon Rate Advantage Home Loan
The Rate Advantage Home Loan provides a low-cost mortgage to qualified buyers. As a general rule this mortgage is significantly lower than the current prime rate. As of September 2011 it was 3.875%. There are some very specific requirements for this loan, not the least of which is income eligibility and the purchase price of the home.
Unlike similar programs in other states which allow several different types of mortgages under a single program, this program allows only mortgages backed by FHA or the USDA's Rural Development program. If applicants are not eligible for one of these two mortgages they will not be eligible for the Rate Advantage program. All approved home buyers will have to purchase mortgage insurance unless the total loan amount ends up being 80% or less of a home's total value.
Oregon Cash Advantage Program
The second program offered by OHCS is known as their Cash Advantage Program. This is similar to the Rate Advantage program except that it adds additional cash to help pay for closing costs. Qualified buyers can receive up to 3% of the loan's total value to be used towards down payment or closing costs. However, there is a trade-off to this program. While interest rates are still below the current prime rate they are higher than the Rate Advantage loan. As compared to Rate Advantage's 3.875%, the Cash Advantage rate as of September 2011 was 4.40%.
Otherwise the programs are relatively the same including the eligibility requirements. For both programs homes are subject to certain sale price limitations except in specific areas designated by the state as being in need of further development. Otherwise homes cannot exceed a certain mean value, and incomes cannot exceed a percentage of the mean income for the area in which the property is being purchased. All of the details are available from your mortgage lender or the OHCS.
Other First Time Home Buyer Programs
Some states offer a variety of other first time home buyer programs administered by counties, local municipalities, and nonprofit groups. At this time there are some available in Oregon, but they are few in number. According to HUD, there are limited programs available in the following areas at this time:
- Corvallis
- Eugene
- Medford
- Portland
- Springfield
- Salem
- Clackamas County
- Washington County
Keep in mind that this information may or may not be currently up-to-date. Also remember that many local programs have limited resources and specific deadlines dictating that funds are not available year-round. You should call your local municipality to inquire about whether or not these programs are still in force. Also keep in mind that many of these local programs are designed to rehab certain neighborhoods. You may be required to make the home your primary residence for a certain amount of time in order to be eligible. You may also be subject to certain rehab requirements as well.