Buying a home is a major life event. It allows people to build equity, invest in their financial futures, and provide a stable home for their families. The U.S. Government encourages homeownership as a way to achieve economic stability while encouraging social responsibility in neighborhoods and cities across the country. Toward this end, the Federal Housing Authority (FHA) offers down payment assistance programs to help people buy homes. These programs, called DPAs, come in the form of grants and low-interest loans and are available to people at the state and local levels.
Oregon DPA Programs
There are hundreds of down payment assistance programs available nationwide as well as those specific to individual states and municipalities. In Oregon, these funds go to various organizations to help them expand their DPA programs. Qualified homebuyers in Oregon may receive up to $15,000 to help cover their downpayment and the closing costs associated with the purchase of the home. The money Oregon provides to these organizations comes from fees and taxes collected by the state. A portion of the funds also goes to help low-income families and veterans.
What Types of DPA Programs are Available in Oregon?
DPA funds are available as both grants and loans. A grant provides funds to homebuyers free and clear—no repayment required. Loans, of course, need to be paid back. DPA loans act as a second mortgage on the home.
Some loans are paid down along with the primary mortgage, but others defer payments until the home is sold, the primary mortgage is refinanced, or the owner no longer resides there. The third type of loan is forgiven after a period of five years or up to 20, however, selling, refinancing, or moving will require repayment. Some loans are interest-free while others have interest rates that could be higher, lower, or the same as the first mortgage.
Each DPA in Oregon is different. Some may be offered only to first-time buyers while others are targeted to those with low to moderate incomes. Others may require that the home buyer works with a lender the organization approves of. Contact the individual organization to learn more about the requirements for their down payment assistance programs.
Oregon Down Payment Assistance Programs
Below is a list of Oregon down payment assistance programs. For more information on the requirements and eligibility of each program, visit the corresponding websites.
Willamette Neighborhood Housing Services
Willamette Neighborhood Housing Services (WNHS) helps Oregon homebuyers with education and counseling in addition to financial assistance. They help renters become homeowners who can then build equity in their new homes. WNHS offers two types of interest-free loans. The Extra Step Loan and the Project Reinvest Loan both provide assistance in DPA funds to qualifying home buyers. The programs are offered on home purchases in Linn, Benton, or Lincoln Counties.
Portland Housing Center
The Portland Housing Center provides homebuyer education, guidance, and financial services, and resources to Portland-area residents. They help people obtain loans and grants but also offer matched savings accounts for savings put towards a home purchase as well as community land trusts which pay for the cost of the land thus reducing the total purchase price. In addition, the organization works to get people tax credits and exemptions which reduces their tax burden.
City of Corvallis Home Buyer Assistance Programs
The City of Corvallis Home Buyer Assistance Programs helps folks buying homes within the city limit of Corvallis. Their First Time Home Loan Program offers a loan of up to $20,000 at zero interest to qualifying low-income, first-time buyers. The funds can be used to cover the down payment or mortgage closing costs. The program considers a first-time buyer to be anyone who hasn’t owned a home in the past three years unless they lost ownership as a result of divorce proceedings. Additionally, applicants must have an annual household income that is less than 80 percent of HUD’s area median income. Completion of their homebuyer education program is also required.
HOME Foundation Buyers Assistance Grant
It is often difficult for low-income residents to save up for the downpayment of a home. The Oregon Association of Realtors (OAR) gives funds to each MLS board that help individuals get out of the “renter’s trap”. The HOME Foundation Buyers Assistance Grant puts qualifying recipients one step closer to homeownership with up to $1,000 in funds. This money can be used for closing costs or to help cover the down payment.
The grant is available to first-time buyers who purchase a home in Oregon. It’s open to those who have not owned a home in the past three years. They must also have pre-approval for a home loan and meet certain income requirements and attend a homebuyer education class in addition to other requirements.
Portland Housing Bureau
The Portland Housing Bureau (BHB) works with several community partners to provide DPA loans to first-time homebuyers purchasing a home in Portland. The loan is funded by the PHB and acts as a second mortgage.
The down payment assistance loan offered by the PHB is designed to assist first-time homebuyers in the purchase of a home within Portland city limits. Funding is subject to availability and the funding source will determine where in Portland the home must be located. To qualify, you must be a first-time homebuyer and work with a home buying counselor at one of the community partners. You must be a U.S. citizen or legal resident and complete a homebuyer education class approved by the Department of Housing and Urban Development (HUD). Visit their website for eligibility information and to see a list of their community partners.
DPA loan has a forgiveness option that starts at the loan’s 15th anniversary when 50 percent of the loan is forgiven. Starting at the 16th anniversary, three percent of the original loan amount is forgiven annually. At the end of 30 years, the remaining balance is forgiven. Homeowners must maintain the property as their primary residence as well as maintain homeowner’s insurance on the property as well as stay in compliance with the loan note.
Oregon Housing and Community Services
The Oregon Housing and Community Services (OHCS) helps low to moderate-income first-time buyers make a home purchase with funds up to $15,000. This assistance is available through loans and grants from community-based providers. The organization places special focus on historically underserved populations. These funds are intended for low-income families and individuals.
Homebuyer counseling helps educate people on what is sometimes a very complicated process. Organizations throughout Oregon provide education and one-on-one counseling to people interested in buying a home in Oregon counties. Read the OHCS list of housing counselors by county. You can also use their Lender Locator to search for lending partners available in the county where you wish to purchase a home.
Housing and Urban Development
While The U.S. The Department of Housing and Urban Development (HUD) does not provide DPAs directly to the citizens of Oregon, they do fund various organizations around the state. In addition, their website is a valuable resource for finding information on loans and programs. They offer information on resources for individuals looking for housing counseling as well as the American Dream Downpayment Assistance initiative.