Yes, Oregon has first-time home buyer programs!
Both VA and USDA loans may allow you to buy a home without a down payment.
There are also some great programs to help you cover a down payment when required. These are often called Down Payment Assistance programs. The most popular Down Payment Assistance programs available statewide are the OHCS Flex Lending Programs: FirstHome and NextStep. We also offer a proprietary Pathways Down Payment Assistance Program that is available statewide and has no income limit.
Each of these programs may enable you to buy a home without needing to save up a down payment, and little to no money out of pocket.
This is your up-to-date guide for these programs. Much of what is currently published on the internet is out of date. For example: many sites still reference the “Cash Advantage” and “Rate Advantage” programs. Those programs no longer exist and have been replaced by the Flex Lending programs that we will discuss here. NW Capital Mortgage is approved to offer you these OHCS programs as well as many other programs.
TRUE STORY: W & K were stuck. They wanted to buy a home but did not have a down payment. They had talked with other lenders who could not help them since their income was over the OHCS income limits for their county. Then they talked with NW Capital Mortgage; we used our proprietary Pathways Down Payment Assistance program and got them into the home they wanted.
Does Oregon have a first-time home buyer program?
Absolutely! In fact, we have several different programs to choose from. Here are several of the most popular programs:
- VA - If you are a veteran of the US Armed Forces (including Coast Guard and National Guard), you may be able to use a VA loan. If eligible, these loans can help you buy a home with no down payment at all. We can help you determine if you are eligible.
- USDA - These loans are available in rural areas to home buyers who meet income limits that vary by county and size of your household. This program requires no down payment. This is a great program for those who can qualify, but qualifying can be difficult. If you want to buy in a rural area, ask us to help you determine if this is the right program for you.
- Pathways - This is an excellent program that does not have an income limit. It has no first-time homebuyer requirement. Further, it will even allow you to buy a 2-unit owner-occupied property. This program provides a second mortgage, so you don’t need to save a down payment.
- Oregon Flex Lending FirstHome - This is a great program if you have not owned a home in the past 3 years. This program provides a second mortgage so you don’t need to save a down payment. There are household income limits and price limits that vary by county.
- Oregon Flex Lending NextStep - This Program does not have a first-time home buyer requirement. However, you cannot own any other real estate. This program provides a second mortgage so you don’t need to save a down payment. It also has a statewide applicant income limit of $125,000.
PRO TIP: The income limits for the FirstHome and NextStep programs are determined differently. FirstHome uses all household income (even counting a 19-year-old son who is not on the loan application). NextStep only counts income of the loan applicants. In some cases, a home buyer may qualify for NextStep and not FirstHome even though NextStep may have a lower income limit.
The "Cash Advantage" and "Rate Advantage" programs are no longer available. Don’t fall into the trap of pursuing these programs. There are many outdated web pages in serious need of an update!
Who Counts as a First-Time Home Buyer in Oregon?
If you have not owned a home in the past 3 years, you are considered a first-time home buyer.
Example: If you are buying a home that will close on 9/15/2026, you are considered a first-time home buyer even if you sold a home as recently as 9/14/2023.
If you have owned a home in the past 3 years, there are several exceptions worth knowing:
- VA and USDA loans do not have a first-time home buyer requirement at all.
- The FirstHome Program has some first-time home buyer exceptions for targeted areas.
- Pathways and NextStep also have no first-time home buyer requirement.
What Are the Best First-Time Home Buyer Programs in Oregon?
The best first-time home buyer program in Oregon depends on your situation. While I’m going to give some general guidance here, the best way to be sure you are getting the right program is to reach out and let us guide you through the decision process. In the meantime, here are a few guidelines that may help.
|
|
OK if owned within 3 years |
Income limits |
Multi unit |
|
VA |
yes |
No limits |
one to four |
|
USDA |
yes |
122,800-147,550** |
no |
|
FirstHome |
no* |
92k-153k*** |
no |
|
NextStep |
yes |
125k |
no |
|
Pathways |
yes |
No limits |
one or two |
* with some small exceptions
**varies by county (1-4 household members)
***varies by county
Qualify for a VA Loan? Use It!
If you qualify for a VA loan, you will typically want to go that direction. VA loans have great rates and no mortgage insurance. Most of our clients who are eligible for a VA loan find this to be their best option. Of course, we will offer other options if they are worth considering.
TRUE STORY: Landon recently bought his first home using a VA loan. With our help, and the help of his realtor, he was able to negotiate to have the seller pay almost all of his closing costs. Amazingly, Landon actually received a large portion of his earnest money deposit back at closing.
USDA Loans Are Excellent But Have Tight Debt-to-Income Limits
USDA loans are a great alternative for non-veterans buying in rural areas if they can meet the program's tighter qualifications. With the tightest debt-to-income limits of any of these programs, it can be hard to have enough income to qualify for a USDA home loan without going over the county income limits of the USDA program.
FirstHome and Pathways Can Help You Buy With No Downpayment
If you do not qualify for either the VA or USDA programs, and you meet the income limits for the FirstHome program, that is probably your best choice. These income limits vary between $92,040 in Josephine County up to $153,960 in the counties near Portland. If you do not meet the income limits of the FirstHome program, the Pathways program is probably your best bet.
TRUE STORY: Mathew recently got a raise that increased his income to just over the income limit for his county. Pathways to the rescue. He was able to buy the home he wanted with no savings required for down payment.
Are There Down Payment Assistance Programs for Oregon First-Time Home Buyers?
Yes, both the FirstHome and NextStep programs offer Down Payment Assistance (DPA) in Oregon.
Oregon Flex Lending DPA
For both the FirstHome and NextStep programs, the amount of Down Payment Assistance is typically 4% of the first mortgage loan amount. That is usually more than enough to cover all of the required down payment of 3 or 3.5% (depending on the underlying loan program). Some “Focused Demographics” can get Down Payment Assistance of 5% of the purchase price. This applies to you if you meet 2 of the following 4 criteria:
- Household of 4 or more people
- A household member with a qualifying disability.
- A housing cost-to-income ratio of 28% or higher.
- A sole Head of Household with a qualifying dependent (dependent is under 18, or has a disability, or 62 or older)
What if you earn too much for OHCS programs?
NW Capital's own Pathways DPA has no income limit at all. This Program allows you to choose if you want Down Payment Assistance of 3.5% of the purchase price, or 5% of the purchase price. In most cases, this is at least enough to cover your total down payment and perhaps even some closing costs. When paired with seller-paid closing costs, many of our clients can purchase a home with virtually no money due at closing. The flexibility of this program makes it one of our most popular Down Payment Assistance solutions.
TRUE STORY: B & M’s household income was over the county limit for both of the OHCS Flex Lending Programs. With the Pathways program and help negotiating some seller-paid closing costs, they were able to get almost all of their earnest money deposit back at closing. In fact, they were able to get a Home Warranty included as well.
What Types of First-Time Home Buyer Loans Are Available in Oregon?
Here we need to make an important distinction. Down Payment Assistance is not a separate loan type. Down Payment Assistance is something that is layered on top of another loan, typically an FHA loan or a Conventional loan. That said, most lenders that offer Down Payment Assistance typically require that you use a special version of the underlying loan that is “teamed up” with the Down Payment Assistance.
While it is possible to use Down Payment Assistance with a VA or USDA loan, this is rarely done since these loans do not require a down payment. Also, a home buyer can typically get a slightly lower interest rate on a VA or USDA loan if they do not use Down Payment Assistance.
As mentioned previously, most Down Payment Assistance is layered on top of an FHA or Conventional loan. The choice of which loan type we will layer Down Payment Assistance on top of depends on each home buyer’s situation. Factors that affect this decision are most often:
- Credit profile: Stronger credit profiles are more likely to be layered on top of a conventional loan.
- Overall debt-to-income ratio: Higher debt-to-income ratios are more likely to use an FHA loan.
- Two-unit properties: The Pathways FHA program supports Down Payment Assistance for two-unit properties.
Can You Buy a Home in Oregon with No Down Payment?
YES! We have several home loan programs that may allow you to buy a home with no down payment! These programs include VA and USDA loan programs. In addition, Down Payment Assistance can also allow you to buy a home without needing to save the money for a down payment. These programs include the Pathways DPA program and the Oregon Flex Lending FirstHome and NextStep programs.
Both VA and USDA loans may allow you to buy a home without a down payment. In most cases, these loans will allow you to finance 100% of the property’s purchase price. There are a few exceptions, though. The most common exception is when the appraiser determines the property's value is less than the negotiated purchase price. In this case, either the seller would need to lower the price to the appraised value, or the buyer would need to make up the difference between the appraised value and the sales price with acceptable funds. Those funds could come from their asset accounts or perhaps a gift from an eligible family member.
When VA and USDA loans are not available for a client, we often turn to Down Payment Assistance “teamed-up” with an FHA or Conventional loan. In most cases, the amount of Down Payment Assistance is more than enough to cover the required down payment. This effectively means that many home buyers using Down Payment Assistance do not need to save for a down payment.
When we couple Down Payment Assistance with seller-paid closing costs, we often see a client get into a new home with very little money being spent (often less than $1000) to purchase the home.
When buying a home, there are some up-front cash outlays. When a seller accepts your offer, it is customary to deposit some earnest money with the title company (typically $500 to 1% of the price). Most buyers also choose to do an inspection (which is mandatory with some programs). Finally, a home appraisal is required.
TRUE STORY: N & S recently bought a home using our Pathways Down Payment Assistance program. They put down a $1000 earnest money deposit. They then paid about $600 for a home inspection, and finally about $825 for their appraisal. Since their realtor negotiated that the seller would pay most of their closing costs, we were able to reimburse them for the appraisal and refund them all but $22 of their earnest money. In the end, they were able to move into the home with a final cash outlay of less than $700.
Here are a few more important points:
- Some programs have a minimum investment requirement (perhaps $500).
- Down Payment Assistance is applied at the end of the home purchase process, so it cannot be used for up-front costs of earnest money, inspections, or appraisals. In some cases, you may be able to be reimbursed for some of those costs, but you will need your own funds for those up front.
- Down Payment Assistance cannot be used to make up the difference between the home purchase price and a lower appraised value.
- In most cases, Down Payment Assistance comes in the form of a repayable second mortgage. While this helps remove the obstacle of saving the money up front for a down payment, it is not free money.
There are many different ways the Down Payment Assistance gets paid over time.
- Typically, a small payment is required. Depending on income, it might be repaid over 10, 20, or 30 years.
- The lowest-income earners may qualify for a DPA that does not require a monthly payment.
- In some cases, the DPA second mortgage may be forgiven for lower-income earners if you live in the home long enough (15 or 30 years depending on the situation).
- In virtually all cases, the down payment assistance must be paid in full when you sell the home, pay off the first mortgage, or no longer live in the home.
Oregon First-Time Home Buyer Income Limits and Requirements
As you will see from the information below, there can be a lot to consider when determining which Oregon First-Time Home Buyer program is the best fit for you. Feel free to reach out to us and let us do the work for you. Since we have years of experience with all the programs we are discussing, we can quickly and correctly determine which program is best for you.
Income Limits
Some First-Time Home Buyer Programs have income limits. Many do not. Here is a quick guide:
VA loans and the Pathways DPA loans do NOT have income limits. While you typically need to be an eligible Veteran to get a VA loan, the Pathways program is available to anyone who qualifies.
USDA Home Loans have household income limits that vary by county and the number of people in your household. For households of up to 4 people, most counties have an income limit of $122,800, but some are higher, the highest being the Portland Metro area at $147,550. For larger households, the limits range between $162,100 and $194,800.
The OHCS Flex Lending programs also have income limits:
- The applicant income limit for the NextStep program is $125,000 statewide.
- The household income limits for Down Payment Assistance with the FirstHome program vary by county. From $92,040 in Josephine County to $153,960 in the Portland Metro area.
Other Requirements
Each of these programs has extensive underwriting guidelines that we will walk you through, so we will not try to list all requirements here. That said, here are a few key considerations:
- Credit scores of at least 620 are required for the OHCS Flex Lending programs.
- While VA, USDA, and Pathways Programs often allow lower scores (as low as 580 in some cases), other requirements such as debt-to-income ratio and amount of assets in reserve become very important with lower credit scores and damaged credit profiles.
- Typically, USDA loans have the strictest debt-to-income (DTI) ratios. The OHCS programs limit DTI to 50%. Pathways can often go up to 55% DTI with a strong file. VA loans can often go above 60% DTI if the residual income calculation is satisfactory.
- All of these loans are designed for owner-occupied situations.
- The OHCS Flex Lending and Pathways programs have home-buyer education requirements in most cases.
Pro Tip: There are many different home buyer education courses out there. Each program has its own requirements. Let us help you determine which program you will want to use before you take your education course. That way, you will take the correct course for the loan program you will be using.
How To Get Pre-Approved as a First-Time Buyer in Oregon
First, Let’s discuss the difference between a Pre-Approval and a Pre-Qualification.
The pre-approval process is much more complete than pre-qualification. For pre-qualification, the loan officer asks you a few questions and provides you with a pre-qual letter. These are typically not worth the paper they are printed on. A “full-doc” pre-approval includes all the steps of a full loan approval, except for final underwriting, the appraisal, and title search. Experienced Realtors know the difference between a pre-approval and a pre-qualification. In many cases, realtors won’t even accept an offer if you do not have a full pre-approval letter. We recommend you work with a lender that does a “full-doc” pre-approval.
Now for the process:
- Decide on the lender you would like to do your “full-doc” loan pre-approval. Understand their process before you submit a loan application. Make sure they initially do a free “soft” credit inquiry that does not affect your credit score. At NW Capital Mortgage, we do only a soft credit inquiry in the early stages. We follow that up with the hard credit inquiry only when everything else looks good. This helps protect your credit score while giving us the information we need to guide you through the process.
- Submit your loan application.
- We will review your loan application and ask you for the documentation that we need for your specific case. The documentation we need will vary depending on your situation.
- Once you have sent in your documentation, we will contact you to go over your situation and complete your loan pre-approval. We will let you know the amount of your pre-approval, the terms, and alert you to any special things you can be doing to improve your pre-approval and make your home buying process easier.
- With your permission, we will contact your realtor to go over your loan pre-approval. This is very helpful in eliminating issues later in the process. If you do not have a realtor, we can recommend someone based on our years of experience in the area.
- When you find a home that you want to make an offer on, we create a custom pre-approval letter for your specific offer amount. There is usually nothing to be gained by telling a seller you are pre-approved for more than you are offering. In fact, sometimes that invites a counter-offer where they try to increase the price you pay for the home.
The pre-approval process (steps 1-5) usually takes from 1-3 days. Much of that depends on how quickly you send us the information we need.
What Oregon First-Time Buyers Usually Don't Know
The Oregon Bond program is no longer available.
The Cash Advantage and Rate Advantage programs are no longer active. The Oregon Flex Lending programs have replaced them. If anyone is talking about those legacy programs, they are not up to speed with the latest information. Don’t walk—Run away!
Down payment assistance cannot cover the difference between your purchase price and a low appraisal.
This is often called an “appraisal gap.” In this case, either the seller would need to lower the price to the appraised value, or the buyer would need to make up the difference between the appraised value and the sales price. Those funds could come from the buyer’s asset accounts or perhaps a gift from an eligible family member.
Determine your Loan Program before taking your required home buyer education.
There are many different home buyer education courses out there. Each loan program has its own requirements. Let us help you determine which loan program you will want to use before you take your education course. That way, you will take the correct course for the loan program you will be using.
You can buy a duplex as a first-time buyer.
This can be achieved with only a few programs. A regular FHA (3.5% down payment) loan is one program that allows this. So does $0 down VA. USDA does not. The OHCS programs do not. Probably the best option for most people is the Pathways DPA program. With this program, you can buy a duplex with none of your money going toward down payment (since it comes from the Down Payment Assistance). Also, a portion of the rent you receive from the rented unit gets added to your income. This may allow you to qualify for a slightly more expensive duplex than if you were buying a regular single-family home.
"First-time buyer" doesn't mean "never owned."
If you have not owned a home in the past 3 years, you are considered a first-time home buyer.
Example: If you are buying a home that will close on 9/15/2026, you are considered a first-time home buyer even if you sold a home as recently as 9/14/2023.
Most Down Payment Assistance is a second mortgage, not free money.
While there are some cases when your Down Payment Assistance can be forgiven over time, this is not typically the case. For example, the OHCS FirstHome program can forgive the Down Payment Assistance for very low-income applicants after either 15 or 30 years. That said, it is often hard to qualify for the purchase price of a typical home if your income is that low.
Buying in Oregon vs. Washington
Do you live and work near the Oregon/Washington border? Are you not sure if you’ll find a house in Oregon or Washington? Here are a few factors to consider.
Oregon has income tax and no sales tax; Washington has sales tax and no income tax. Understand how living in each state will affect your financial situation. Remember, if you live in Vancouver but work in Portland, your wages are still subject to Oregon income tax.
Ready to Get Started?
Owning a home is part of the American Dream! Isn’t it time that you take the next step in buying a home?
NW Capital Mortgage not only offers OHCS Flex Lending programs, but we also have our own proprietary Pathways Down Payment Assistance program that often works when Flex Lending doesn’t. Add to that our expertise with VA, USDA, FHA, and Conventional loans, and we clearly have all the tools and experience you need to help you buy your first home.
FAQ Section
Does Oregon have a first-time home buyer program?
Yes, there are several programs to help first-time home buyers. We offer OHCS Flex Lending programs FirstHome and NextStep. We have the Pathways Down Payment Assistance program that has no income limit. We also offer VA, USDA, and Conventional loans designed for first-time home buyers.
What are the best first-time home buyer programs in Oregon?
The best first-time home buyer program for you depends on your situation. If you are eligible for a VA home loan, that is probably your best bet. If not, and you want to buy in a rural area, we should consider USDA. If neither of those fit your situation, and you meet the OHCS Flex Lending income limits for your county, we should look at those programs. And if your income is above the county income limits for OHCS programs, we should look at the Pathways DPA program.
What types of first-time home buyer loans are available in Oregon?
There are several programs to help first-time home buyers. We offer OHCS Flex Lending programs FirstHome and NextStep. We have the Pathways Down Payment Assistance program that has no income limit. We offer VA, USDA, and Conventional loans designed for first-time home buyers.
Is there an Oregon first-time home buyer assistance program?
Yes, the OHCS Flex Lending Programs are specifically designed for Oregon. The FirstHome program is designed for home buyers who have not owned a home in the past 3 years. The NextStep Program is designed for buyers who have owned a home in the past 3 years. Both of these programs have income limits. If you exceed the income limits of these programs, you should look at our Pathways DPA program.
What programs assist first-time home buyers in Oregon?
There are several programs to help first-time home buyers. We offer OHCS Flex Lending programs FirstHome and NextStep. We have the Pathways Down Payment Assistance program that has no income limit. We offer VA, USDA, and Conventional loans designed for first-time home buyers.
Which Oregon first-time home buyer programs have the lowest down payment requirements?
Several programs effectively eliminate the need for you to save a down payment. Both VA and USDA loans may allow you to buy a home without a down payment. There are also some great programs to help you cover a down payment when required. These are often called Down Payment Assistance programs. The most popular Down Payment Assistance programs available statewide are the OHCS Flex Lending Programs: FirstHome and NextStep. We also offer a proprietary Pathways Down Payment Assistance Program that is available statewide and has no income limit.
What are the best mortgage options for first-time buyers in Oregon?
The best first-time home buyer program in Oregon depends on your situation. While I’m going to give some general guidance here, the best way to be sure you are getting the right program is to reach out and let us guide you through the decision process. In the meantime, here are a few guidelines that may help.
- If you qualify for a VA loan, you will typically want to go that direction. VA loans have great rates and no mortgage insurance.
- USDA loans are a great alternative for non-veterans buying in rural areas if they can meet the program's tighter qualifications. If not, we have other great options below.
- If you do not qualify for either the VA or USDA programs, and you meet the income limits for the FirstHome program, that is probably your best choice. If you do not meet the income limits of the FirstHome program, the Pathways program is probably your best bet.
How do I get pre-approved for a home loan as a first-time buyer in Oregon?
The best way to get pre-approved is to submit a loan application with a lender who does a “full-doc” pre-approval, and who also has access to all the programs we discuss in this article. A “full-doc” pre-approval takes a bit more time, but it avoids negative surprises later in the process. It also carries much more weight with realtors and home sellers when you are competing for a popular home.
Are there down payment assistance programs for Oregon first-time home buyers?
Yes, OHCS offers the Oregon Flex Lending FirstHome program. This is a great program for first-time home buyers in Oregon. If you do not meet the income limits of the FirstHome program, the Pathways DPA program is a great choice.
What are the income limits for Oregon first-time home buyer programs?
The Pathways DPA and VA loan programs do not have any income limits. The Oregon Flex Lending FirstHome Program has income limits that vary by county. The limits range between $92,040 in Josephine County up to $153,960 in the counties near Portland.
What credit score do I need to buy a first home in Oregon?
Typically, a credit score of 620 or better works for most programs. Some programs can go as low as 580 if the rest of your application is strong. The best way to determine if you qualify is to submit a loan application. If you do not qualify, our NW Capital Mortgage loan officers can often give you advice to help you qualify in the future.
Do I have to be a first-time buyer to get down payment assistance in Oregon?
No, you do not need to be a first-time home buyer to get Down Payment Assistance. Both the Pathways DPA program and the NextStep Program do not have a first-time home buyer requirement. Also, most programs count you as a first-time home buyer if you have not owned a home for the past 3 years (even if you owned a home before then)
Do I have to repay Oregon down payment assistance?
Yes, in most cases. Most Down Payment Assistance is a second mortgage, not free money. While there are some cases when your Down Payment Assistance can be forgiven over time, this is not typically the case. For example, the OHCS program can forgive the Down Payment Assistance for very low-income applicants. That said, it is often hard to qualify for the purchase price of a typical home if your income is that low. Additionally, you must keep the home and the loan for 15 or 30 years (depending on the situation) for it to be forgiven.
Can I buy a home in Portland or Salem with no money down?
Absolutely! For eligible Veterans, we have the VA home loan program that does not require a down payment. In addition, Down Payment Assistance can also allow you to buy a home without needing to save the money for a down payment. These programs include the Pathways DPA program and the Oregon Flex Lending FirstHome and NextStep programs.