Buying a Home in Oregon With Less Than 5% Down: It’s Doable

December 6, 2017
Last updated:
January 31, 2022
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Many people think it’s impossible to buy a home in Oregon with a down payment less than 5%. The truth is, there are several financing options that allow borrowers to do exactly that, and this article will provide more information about them.

Gathering up a large down payment to put towards the purchase of a home in Oregon can be tough. But you don’t necessarily have to put up a 20% down payment to secure a mortgage. Here’s how you could buy a home in Oregon in 2022 with less than 5% down.

Buying in Oregon With a Down Payment of 5%, or Less

Recent surveys have shown that many potential home buyers believe it’s not possible to purchase a house with a down payment below 5%. One particular study, published by, revealed the following:

“The report summarized that 39% of non-owners believe they need more than 20% for a down payment on a home, 26% believe they need to put down 15% to 20%, and 22% believe a down payment of 10% to 14% would work.”

The reality is that many home buyers are able to buy in Oregon with less than 5% down. This is a subject we’ve covered in the past. But it’s an important topic that apparently generates a lot of confusion. So we thought it was time to revisit this topic for people planning to buy a home in Oregon in 2022.

So, how can a person buy a home with less than 5% down? Several ways, actually.

One way to accomplish this is by using the FHA loan program, which has a relatively low investment requirement. Additionally, some conventional mortgage loans offer down payments as low as 3%. And if you happen to be a military member or veteran, you could be eligible for VA mortgage financing that eliminates the need for a down payment altogether.

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FHA option

In 2020, the minimum down payment required for an FHA-insured home loan will be 3.5%. This has been the minimum required investment for the last few years, and we do not expect it to change in 2020. Specifically, that’s 3.5% of the purchase price or appraised value of the home, whichever is less. So this is one option for buying a home in Oregon with less than 5% down.

Conventional loan with 97% LTV

Freddie Mac and Fannie Mae, the government-sponsored corporations that purchase home loans from lenders, will buy mortgages with a loan-to-value (LTV) ratio up to 97%. That limit is imposed by the Federal Housing Finance Agency. Conversely, this means that borrowers who use a conventional loan to buy a house in Oregon could potentially make a down payment as low as 3%. This is another viable option for buying a home in Oregon with less than 5% down.

VA loan with 100% financing

Most military members and veterans in Oregon are eligible for VA mortgage financing. The money still comes from a lender, just like any other type of mortgage loan. But the loan gets guaranteed by the Department of Veterans Affairs. Because of the government backing, borrowers can avoid a down payment altogether.

These are just three of the most common ways a person could buy a home in Oregon with less than 5% down. There are other mortgage financing strategies as well, and some of them offer a lot of flexibility when it comes to the upfront investment.

Home Prices Still Rising Across the State

Today’s mortgage industry is more flexible than most people realize. This is especially true when it comes to minimum down payments. And this kind of flexibility is important, when you consider the fact that home prices in Oregon have risen steadily over the last few years.

According to the real estate information company Zillow, the median home value for the state rose by 19.7% over the last 12 months (ending in January 2022). That’s a relatively healthy rate of growth, based on long-term historical averages. Prices are expected to continue rising in 2022, as well. As of this writing, the median home price in Oregon is $486,642.

Higher housing costs can be a challenge for future home buyers. But there are a lot of financing options available these days, and some of them are fairly flexible when it comes to the upfront, out-of-pocket costs. That’s why it’s important to explore your options with a knowledgeable mortgage professional.

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Have Questions About Mortgages in Oregon?

If you have any questions about home loans in Oregon, Sammamish Mortgage can answer them. We have been serving borrowers in Oregon and across the Pacific Northwest since 1992, including WA, OR, CO & ID. We offer a variety of home loan programs, some of which have a relatively low down-payment requirement. Please contact us if you have financing-related questions or would like to receive a cost estimate.

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