The state of Oregon and various local non-government organizations provide several first-time home buyer assistance programs to help you on your path to homeownership.

These programs can assist first-time home buyers with:

• Lower mortgage rates
• Down payments
• Closing costs

First-time home buyers may also qualify for grants to cover a portion of their down payment or closing costs.

Many first-time home buyer programs in Oregon can be good alternatives to conventional loans if you don't have a down payment saved up, have a low credit score, have low income, or live in an expensive area.

Keep reading for more information on how to achieve your goal of buying your first home.

What are first-time home buyer requirements in Oregon

Savings needed | Credit score | Debt-to-income ratio

A first-time home buyer is someone who has never owned a home or who hasn’t owned and occupied their home in the last three years, according to the U.S. Department of Housing and Urban Development (HUD).

To qualify for a first-time home buyer program through the Oregon Housing and Community Services (OHCS), you must also be an Oregon resident. An Oregon resident is someone who has lived in Oregon for 12 months or more.

What shape do my finances need to be in?

You'll need savings to cover the down payment and closing costs, in addition to having a qualifying credit score.

For the down payment, you'll need at least 3–10% of the home purchase price if you're getting first-time home buyer assistance. For conventional loans outside of Oregon's first-time home buyer programs, some lenders require a down payment of 20%.

A down payment of less than 20% may mean you need to purchase private mortgage insurance (PMI).

For the closing costs, plan on needing 3–6% of the home purchase price.

If your finances aren't in tip-top shape, you may need to look for additional ways to save money on your home purchase. One option is Clever, which can match you with top-rated agents who can score you a great deal on your new home.

Eligible buyers will also get cash back after closing. While you can't use this money to fund your purchase, you can use it to cover upgrades or living expenses after you close.

How much should I have saved?

Based on the median Oregon sale price of $486,642, anticipate saving $29,198–126,526 to cover your down payment and closing costs.

The down payment would be between $14,599 (3% of the price) and $97,328 (20%).

The closing costs would be $14,599–29,198 (between 3–6% of the home price).

You also need to budget for your monthly mortgage and unexpected expenses. The average homeowner shells out an additional $15,405 each year on top of their mortgage for maintenance and repairs, utilities, and property taxes.

If saving thousands of dollars to buy a home feels unattainable, don’t give up! Several programs can help you with the costs.

What credit score does a first-time home buyer need?

In Oregon, many lenders require a minimum credit score of 620. However, the credit score requirement for a first-time home buyer depends on a variety of factors.

For example, lenders may be lenient on your credit score if you have a low debt-to-income ratio (DTI) or a lot of savings. When it comes to buying a home, nearly everything is negotiable.

Some of Oregon’s first-time home buyer programs don't explicitly state a minimum credit score requirement because they're willing to be flexible with buyers.

» LEARN: How to Fix Your Credit Score in 6 Months

What debt-to-income ratio (DTI) does a first-time home buyer need?

Generally speaking, lenders prefer a DTI of 43% or less. Some Oregon programs accept up to 50% DTI. Since 2017, Oregon has been more lenient about DTI requirements for its state programs.

Let’s say you earn the median family income in Oregon, which is $89,700. Your monthly income would be approximately $7,475. A 43% DTI would mean you have less than $3,214 in debt payments per month. A 50% DTI would mean you have less than $3,737 in debt payments per month.

The DTI you need depends on the first-time homebuyer program you're applying to, your credit score, and the amount of money you have in savings.

What are first-time home buyer programs in Oregon

The main government programs for first-time home buyers are operated through the Oregon Housing and Community Services (OHCS). As a first-time home buyer, check first with OHCS for assistance.

In general, Oregon first-time home buyer programs assist with several things:

• Securing a favorable interest rate
• Coming up with cash to cover down payment
• Coming up with cash to cover closing costs

Many of these programs are designed to help low-income residents own their first home.

» JUMP: Down payment assistance | Mortgage assistance | Tax credit programs | Grants | Closing costs

What are first-time down payment assistance programs in Oregon?

In Oregon, several government and non-government programs help first-time home buyers cover down payment costs. A program can do one of two things:

• Reduce the down payment from 20% to a lower percentage
• Cover a percentage of the down payment

The down payment for a home in Oregon without home buyer down payment assistance is usually 20% of the purchase price. With down payment assistance, you may be able to get that to 3–10% of the price.

Considering the median home price in Oregon is $486,642, this means you'd probably need anywhere from $14,599–48,664 for the down payment if you qualify for a down payment assistance program.

Down payment assistance programs are helpful if you haven't been able to save up the cash to cover these costs.

Down payment assistance programs

Oregon Housing and Community Services (OCHS) disperses funds to various non-profit organizations throughout the state to provide closing cost assistance to qualified first-time home buyers.

The following organizations can provide a loan of up to $15,000 to assist with closing costs if you meet their requirements. Contact the organization in the county where you're buying a home for more information.

If you don't see your county listed, call or email OCHS to inquire about a program in your area.

Additionally, the city of Portland offers a down payment assistance program. The Portland Down Payment Assistance Loan (DAPL) covers a down payment amount up to $80,000 -100,000. The loan is a 30-year term with a 0.012% APR. DAPL offers an option for forgiveness at the 15-year and 30-year mark.

Non-government down payment assistance programs

In addition to the programs listed below, check with your local city or county organizations for additional assistance. The Oregon Realtors’ website has a round-up of programs by county.

What are first-time mortgage assistance programs in Oregon

First-time mortgage assistance programs help with securing an affordable, fixed interest rate loan. A fixed interest rate means the rate won't change over time, providing a stable monthly mortgage payment. That's not the case with a variable interest rate.

First-time mortgage assistance programs can also reduce your down payment, sometimes as low as 0%.

The first place to check for first-time mortgage assistance programs is Oregon Housing and Community Services (OCHS), which has two offerings. Then check your local county and your local credit union.

What credit score do I need for these mortgage assistance programs?

First-time mortgage assistance programs generally require a credit score of at least 620. However, Oregon's programs rarely mention credit score requirements, and a lot of the program aspects are county or city specific. It's best to call and ask for details on the programs.

Government programs

Government programs

What are first-time home buyer tax credit programs in Oregon?

The Mortgage Credit Certificate (MCC) program allows low-income families who are first-time home buyers to claim a dollar-for-dollar tax credit for a portion of the mortgage interest paid per year, up to $2,000.

A tax credit essentially reduces your federal tax bill, leaving more money in your pocket.

Individual Oregon cities run MCC programs, and they vary by city. For example, Portland offers 20% MCC. Call your city directly to see if MCC is available.

What are first-time home buyer grant programs in Oregon?

A variety of grant programs are available to first-time home buyers in Oregon. A grant provides funds to cover specific home buying costs.

These grant funds are 0% interest and forgiven. In other words, it's free money you don’t have to pay back. Grant programs are often given based on location.

Government home-buyer grant programs

City and county governments are your best bet in Oregon, as the state doesn't appear to offer statewide grants.

Community in Action, for instance, is a down payment assistance grant available to first-time home buyers in Malheur County. The grant is up to $15,000. To qualify, you must meet the income limits. For example, your annual income can't exceed $29,050 for a one-person household or $41,500 for a household of four.

Non-government home-buyer grant programs

What are first-time home buyer closing costs assistance programs in Oregon?

Closing costs assistance programs, which are often loans to help to cover the expenses associated with finalizing the real estate transaction, are available through several programs in Oregon.

Closing costs typically range from 3–6% of the home purchase price. Using the median home price in Oregon of $486,642, this means that you should anticipate saving $9,732–24,332 for the closing costs.

Closing cost assistance programs

Oregon Housing and Community Services (OCHS) disperses funds to various non-profit organizations throughout the state to provide closing cost assistance to qualified first-time home buyers.

The following organizations can provide a loan of up to $15,000 to assist with closing costs if you meet their requirements. Contact the organization located in the county where you're buying a home for more information.

If you don't see your county listed, call or email OCHS to inquire about a program in your area.

Non-government closing cost assistance programs

What assistance is available for first-time home buyers with low income in Oregon?

Many state, local, and non-profit programs in Oregon are available to folks with low income looking to buy a home.

Low-income buyers can find help with:

• Down payments
• Closing costs
• Low-interest loans

What defines a low-income home buyer in Oregon?

The definition of a low-income buyer varies by city in Oregon. The factors include location and number of members in the family.

For example, in Portland, the low-income limit is $67,830 for a one-person household and $96,900 for a four-person household. In Springfield, it's $35,950 for a one-person household and $51,300 for a four-person household.

What assistance is available for first-time home buyers with disabilities in Oregon?

Oregon doesn't offer specific programs for buyers with disabilities.

However, the HomeReady Mortgage by Fannie Mae is a federal program that offers special assistance for persons with disabilities.

What's the process of buying a house for the first time in Oregon?

These eight steps can guide you through the process of purchasing your first home.

Step 1: Evaluate your financial situation

Check your credit score and your savings. Ask yourself, "Am I prepared to cover 3–20% down payment costs and the 3-6% closing costs?"

Step 2: Choose the right neighborhood

Think about the things you need in your neighborhood. This could be public transportation, a quality public school system, arts and cultural activities, or a high walkability score.

Write these down and keep them in mind as you assess the different homes you're viewing.

Step 3: Find a great real estate agent in Oregon

Take your time to interview real estate agents. A great real estate agent is helpful because they can potentially introduce you to properties that are not available on public listings and they may have connections to local lenders who could set you up with a first-time home buyer program that is not widely known.

At Clever, we connect you with top local agents who can help you get a great deal on your first home.

Step 4: Get pre-approved for a mortgage

You'll need to know how much home you can afford for your realtor to be able to best support you in the home-buying process.

Step 5: Start house hunting in Oregon

Check out a ton of open houses to get a sense for what you like and what's available on the market.

Step 6: Make offers

In Oregon, you’ll want to move quickly with your offer because homes are selling fast.

Before you submit your offer, get clear on what aspects of your offer you're willing to be flexible on and which ones you're unwilling to negotiate. If there's a counter-offer, you'll know where you stand.

Step 7: Inspections and appraisals

Always go through the inspection process. Otherwise, you may end up with an expensive headache if you later find issues with the home that require you to spend a lot of money to fix.

Step 8: Final walkthrough and closing

Sometimes hiccups come up in the closing process, and the opportunity to buy the home falls through. That's ok. Keep pushing, and you’ll soon land the home of your dreams.

When you close, pop the champagne and celebrate.

FAQs for first-time home buyers in Oregon

Related reading

Oregon Real Estate Market in 2021: Forecasts + Trends

Oregon home values have decreased -0.07% to $483,939 this month. Learn about more Oregon real estate market trends and what they mean for you.

The post First-Time Home Buyer Guide for Oregon appeared first on Semya-Moya.

The state of California and local non-government organizations offer several first-time home buyer assistance programs to help you move into the home of your dreams.

These programs can assist first-time home buyers with:

• favorable mortgage rates
• down payments
• closing costs
• learning the ins and outs of buying a home through educational programs

Additionally, first-time home buyers may qualify for grants to cover a portion of their down payment or closing costs. Grants are free money that you don't have to pay back if you meet the grant’s requirements, such as remaining in the home you buy for a certain number of years.

Many of these first-time home buyer programs can be good alternatives to conventional loans for buyers who don't have a down payment saved up, have a low credit score, have low income, or live in an expensive area.

Keep reading for more information on how to achieve your goal of buying your first home and building wealth in the process.

What are first-time home buyer requirements in California

Residency requirements | Credit score | Debt-to-income ratio | Savings needed

A first-time home buyer is someone who hasn't owned and occupied their own home in the last three years. That means if you've never owned a home, you're a first-time home buyer.

You also qualify as a first-time home buyer if you owned and sold a home three or more years ago.

What are first-time home buyer residency requirements in California?

To qualify for California's first-time home buyer programs, the home you purchase must be your primary residence. You can't rent it out or use it as an investment property.

In California, you don't have to be a resident to qualify for the first-time home buyer programs. A resident is an individual who has lived in the state for at least 12 months.

What credit score does a first-time home buyer need?

In California, many lenders require a minimum credit score of 620. However, the credit score requirement for a first-time home buyer will depend on a variety of factors.

For example, the minimum credit score required to apply to California’s California Housing Financial Agency (CalHFA) programs ranges between 620-680, depending on the program you are applying to.

» LEARN: How to Fix Your Credit Score in 6 Months

What debt-to-income ratio does a first-time home buyer need?

Many lenders in California require a debt-to-income ratio (DTI) of 43% or less to qualify for your first home purchase.

Let’s say your income matches the median household annual income in California of $77,358, which is approximately $6,446.50 per month. And 43% of $6,446.50 is $2,772. This means that your monthly debt payments could not exceed $2,772 per month in order to remain under the 43% DTI threshold.

What shape do my finances need to be in?

You'll need to have adequate savings to cover the down payment and closing costs, in addition to having a qualifying credit score.

You'll need to save at least 3-10% of the home purchase price for the down payment. For conventional loans outside of first-time home buyer programs, some lenders require a down payment of 20%.

You should also save 11% of the home sale price to cover the closing costs, according to the California Land Title Association.

On average, closing costs nationally are between 3–6% of the purchase price, but if you're buying in California anticipate needing closer to the 11% recommended by the California Land Title Association.

Closing costs can be higher in California than other states because the fees related to the closing costs — including the commission, loan processing, escrow, title insurance, and inspections — can be more expensive than other states.

Connect with top local agents who can help you get a great deal on a new home. Eligible buyers will also get cash back in their pocket after closing.

» MORE: Find top local agents and save with Clever Cash Back

How much should I have saved?

A home at the median California price of $796,570 would mean you should anticipate saving between $23,898–159,314 for the down payment, and an additional $87,622 for the closing costs. This is a total of $111,520–246,936 in total savings.

You'll also need to budget for your monthly loan payment (mortgage) and unexpected expenses such as maintenance costs.

The average U.S. homeowner spends $15,405 each year on maintenance, home improvements, and other hidden costs. This is an additional $1,283.75 in potential monthly costs.

If saving tens of thousands of dollars feels overwhelming or unattainable, don’t give up! Several first-time home buyer programs can help you with the costs.

What are first-time home buyer programs in California?

The California Housing Finance Agency (CalHFA) provides first-time home buyer programs that can assist with the down payment, closing costs, or securing a favorable interest rate for your mortgage.

Many of these first-time home buyer programs are designed to support those with low-income to get into the first home and build wealth.

Down payment assistance | Mortgage assistance | Tax credit programs | Help with closing costs

What are first-time down payment assistance programs in California?

Various government and non-government programs can help lower your down payments. A program can either:

• Reduce the percent of a home's purchase price lenders like buyers to pay from 20% to a lower percentage
• Cover a percentage of the down payment

In California, expect your down payment to be 3-10% of the home purchase price. (For conventional loans, some lenders require a down payment of 20%.)

As an example, the median home price in California is $796,570. This means that you should anticipate saving between $23,898–$79,657 for the down payment.

If saving more than $20,000 for a down payment feels overwhelming, these programs can help cover the cost.

Government down payment assistance programs

In addition to the programs in the chart below, check with your local city or county government for additional assistance in your area.

Non-government down payment assistance programs

In addition to the programs in the chart below, check with your local city or county for non-profits, organizations, or credit unions for additional assistance. None of the following programs state a minimum credit score

What are first-time mortgage assistance programs in California?

CalHFA and other local programs can assist with securing a more favorable interest rate for your mortgage than you might get with a lender outside of a program. Some programs may also have a reduced private mortgage insurance (PMI) or relaxed credit standards.

In addition to CalHFA, check your local city and county for other mortgage assistance programs. You can also check with your current bank.

Government first-time mortgage assistance programs

Borrowers must:

• Occupy their property as a primary residence
• Complete home-buyer education counseling and obtain a certificate of completion through an eligible counseling organization

There are no minimum credit scores stated.

Do these first-time mortgage assistance programs have income limits?

Yes. The income limits are based on the city and county where the buyer resides. The CalHFA USDA program has more restrictive limits.

As you review these income limits, if you find that you earn above the income threshold but could still use financial assistance, check out the Home Buyer Empowerment Loan Program in the Bay Area or the Moderate Income First Time Homebuyers Program in Los Angeles.

Below is a chart of the ten most populated counties in California and their income limits as of June 2021. If you don’t see your county listed, check the CalHFA income limits page for your county’s information.

Non-government first-time mortgage assistance programs

What are first-time home buyer tax credit programs in California?

The Mortgage Credit Certificate (MCC) program allows families with low income who are first-time home buyers to claim a dollar-for-dollar tax credit for a portion of the mortgage interest paid per year, up to $2,000.

A tax credit essentially reduces your federal tax bill, leaving more money in your pocket.

Individual California counties run MCC programs. Each county determines the percentage of the interest that you can claim as a tax credit. Check with your county to see if MCC is available and the percentage of the interest that you can claim as a tax credit.

What are first-time home buyer grant programs in California?

A variety of organizations provide first-time home buyer grant programs.

Government home-buyer grant programs

City and county governments are your best bet in California, as the state doesn't appear to offer statewide grants.

The Homeownership Grant Program in San Diego, for instance, offers closing cost assistance of up to 4% of the purchase price, not to exceed $10,000. The funds are forgiven at escrow closing. In order to qualify, home buyers can't earn more than 80% of San Diego’s area median income (AMI). In San Diego, 80% AMI for a single person is $67,900 and for a family of four it's $97,500.

Additionally, federal grants are available for first-time home buyers. Visit the U.S. Department of Housing and Urban Development (HUD) HOME Investment Partnerships Program for information.

Non-government home-buyer grant programs

The California Association of Realtors (CAR) offers $10,000 grants to help with closing costs for first-time home buyers. In addition to being a first-time home buyer, you must meet other requirements, including being a member of an underserved community and you must buy a single-family residence. CAR has a list of the complete program criteria.

In addition to grants, check your local city for deferred loan programs or zero interest loan programs. With deferred loans, you don’t have to make a payment on the assistance from the program until your home is sold, refinanced, or paid in full.

While deferred loans aren't "free" money like grants, they do offer significant savings.

What are first-time home buyer closing costs assistance programs in California?

Closing costs assistance programs, which are loans to help to cover the expenses associated with finalizing the real estate transaction, are available through several programs.

Closing costs typically range 3-6% of the home purchase price. In California, however, closing costs can hover around 11%, according to the California Land Title Association. While your closing costs may be less, it's best to prepare to pay 11%.

Closing costs can be higher in California than other states because the fees related to the closing costs, including the commission and loan-processing fees, can be more expensive than in other states.

Most government programs that offer closing costs also offer down payment assistance.

Government closing cost assistance programs

What assistance is available for first-time home buyers with low income in California?

State, county, city, and non-profit organizations all offer programs for low-income first-time home buyers. This assistance includes relaxed credit standards, reduced down payment requirements, and more favorable mortgage interest rates.

What defines a low-income home buyer in California?

Income limits throughout California range from $118,550–248,000. They vary by program and by city and county.

Generally speaking, low income is measured as 80% of the area median income (AMI). However, some counties in California allow income limits higher than the stated definition of 80% of AMI to accommodate the increasing housing costs.

Below is a chart of the ten most populated counties in California and their income limits as of June 2021. If you don’t see your county listed, CalHFA’s income limits will provide your area’s information.

Government programs for low-income first-time home buyers

CalHFA offers three programs for folks with low incomes, all of which have no minimum credit score requirements.

In addition to the programs above, check your local community for additional assistance. Below are two examples of local, non-government programs that provide mortgage assistance to first time home buyers with low incomes.

Non-government programs for low-income first-time home buyers

What assistance is available for first-time home buyers with disabilites in California?

California doesn't offer specific programs for buyers with disabilities.

However, the HomeReady Mortgage by Fannie Mae is a federal program that offers special assistance for persons with disabilities.

What's the process of buying a house for the first time in California?

Below are eight home buying steps to guide you in the process of purchasing your first home.

Step 1: Evaluate your financial situation

Check your credit score and your savings. Ask yourself, "Am I prepared to cover 3–20% down payment costs and the 11% closing costs?"

Step 2: Choose the right neighborhood

Think about the things you need in your neighborhood. This could be public transportation, a quality public school system, arts and cultural activities, or a high walkability score.

Write these down and keep them in mind as you assess the different homes you're viewing.

Step 3: Find a great real estate agent in California

Take your time to interview real estate agents.

Step 4: Get pre-approved for a mortgage

You'll need to know how much home you can afford in order for your realtor to be able to best support you in the home-buying process.

» GET PRE-APPROVED: Get pre-approved by a licensed lender

Step 5: Start house hunting in California

Check out a ton of open houses to get a sense for what you like and what's available on the market.

Step 6: Make offers

In California, you’ll want to move quickly with putting in an offer because homes are selling fast. However, balance this need for speed with doing your due diligence in the inspection process (Step 7).

Step 7: Inspections and appraisals

Always go through the inspection process. Otherwise you may end up with an expensive headache if you later find issues with the home that require you to spend a lot of money to fix.

Step 8: Final walkthrough and closing

Sometimes hiccups come up in the closing process and the opportunity to buy the home falls through. That's ok. Keep pushing and you’ll soon land the home of your dreams.

When you close, pop the champagne and celebrate.

FAQs for first-time home buyers in California

Related reading

California Real Estate Market in 2022: Forecasts + Trends

California home values have increased 0.59% to $746,055 this month. Learn about more California real estate market trends and what they mean for you.

The post First-Time Home Buyer Guide for California appeared first on Semya-Moya.

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