Down Payment Assistance Programs and Grants for Home Buyers: 2021 Update
We know the home buying process can seem obscure, even formidable. But one of the great benefits of navigating the Portland real estate market is that so many programs are in place to help out first time home buyers and encourage home ownership regardless of income level. If you dream of buying a home of your own but feel like you don’t have the funds – think again. It’s very possible you may qualify for a number of down payment assistance programs that can give you a foot in the door to your new home.
Down payment assistance programs are a murky territory, though. They come at federal, state, county, and city levels (often with overlapping stipulations). Today we’ll lay out the best down payment programs available in the Portland metro and how you may qualify for them.
What Is Down Payment Assistance?
Down payment assistance can come in many forms, and qualifications for it can vary. But in essence down payment assistance consists of grants, also termed as cash assistance, to help lower income buyers meet a minimum down payment. Generally, these programs are offered to “first time home buyers” (but the definition of that includes any individual who has not owned and occupied a primary residence in at least three years).
At a national level, the widest reaching program for down payment assistance is an FHA loan. An FHA loan allows you to purchase a home with a down payment of only 3.5% of the purchase price (rather than the standard 20%). This is an excellent opportunity for aspiring home owners to enter the market and increase their assets. Take note, though, that it also requires that you purchase mortgage insurance.
But don’t let that stop you. The state of Oregon and the city of Portland offer some of the best incentives towards home ownership you can find. Keep reading to find out how to take advantage of Portland’s most advantageous down payment assistance programs.
Oregon Bond Residential Loan Program
The Oregon Bond Program epitomizes Oregon’s tradition of community support. Using funds from previous bonds, it allows first time home buyers to secure a below-market interest rate and/or cash assistance.
Right now the interest rates are at a record low. For their Rate Advantage Program, the current rate is 2.125%. For the Cash Advantage Program, which includes cash assistance, the rate stands somewhat higher at 2.875%.
To Qualify for Oregon Bond You Must:
- Be resident of Oregon
- Be a first time home buyer (not owned a home for at least three years)
- Meet income requirements (though for targeted areas, those limits are waived)
- Find an approved lender
Oregon Individual Development Accounts
Another excellent resource for those looking to grow a nest egg is to seek out an Oregon Individual Development Account, or IDA. For qualifying individuals, an IDA will help you set a savings goal. When you meet your benchmarks, they will match it using funds from business and personal donors.
IDAs aren’t specifically used for down payments, but they’re an exceptional way to build funds for your new home with assistance. Managed by Neighborhood Partnerships, IDAs help low income individuals reach (and at least double) savings goals.
To Qualify for an IDA You Must:
- Be an Oregon resident over 12 years old
- Meet the program’s income eligibility
- Have a net worth below $20,000
- Commit to a monthly savings plans, including financial education, with an IDA provider
Portland Down Payment Assistance Program
The Portland DAPL is designed to encourage home ownership specifically in the Interstate Corridor Urban Renewal Area. It’s a second mortgage loan funded primarily by the Portland Housing Bureau that also partners with a number of local organizations to bring affordable home ownership opportunities to Portlanders.
To Qualify for DAPL You Must:
- Be a first time home buyer
- Through one of the community partners linked above be approved for a first mortgage
- Maintain an annual household income at or below 100% of Portland’s current Area Median Income
- Have no more than $10,000 in liquid assets
- Contribute an investment of at least $500
- Complete a home buyer education course approved by HUD
Portland Housing Center’s Mortgage Assistance Program
The nonprofit Portland Housing Center has been investing in affordable housing for individuals and families since 1991. In addition to providing education around the home buying process, they also offer services such as competitive mortgages and down payment/closing cost assistance.
Talk to a Top Portland Buyers Agent
My team is familiar with these programs and more. Contact our top 1% Portland buyers team today at 503-773-0000.February 6, 2021