Oregon home buyers using an FHA loan can put down as little as 3.5% of the purchase price or appraised value, whichever is less. Borrowers with credit scores between 500 and 579 generally must put down at least 10%, while borrowers with scores of 580 or higher may qualify for the 3.5% minimum. Gift funds from an approved donor may also be allowed to cover the minimum investment. Keep in mind, though, that the minimum down payment is not the same as your total cash needed at closing.
Related: Check out other home loan programs in Oregon
Oregon home buyers who use an FHA loan to buy a house must make a down payment of at least 3.5%. That’s 3.5% of the purchase price or the appraised value of the home, whichever is less. That’s the minimum required down payment for FHA loans in Oregon.
Inversely, this means that the maximum loan-to-value (LTV) ratio for an FHA-insured mortgage is 96.5%.
“For purchase transactions, the maximum LTV is 96.5 percent of the Adjusted Value.”
There are some overlapping credit score requirements as well. HUD requires a minimum credit score of 580 for borrowers who wish to take advantage of the 3.5% down payment. Borrowers with scores between 500 and 579 must put down at least 10% when using the FHA loan program. Borrowers with scores below 500 are generally not eligible for this program.
This is one of the key requirements for Oregon FHA loans. If you want to use this program to purchase a home, you’ll have to come up with a down payment of at least 3.5%.
But here’s the good news: The money can be gifted from a family member or other approved donor. So you don’t necessarily have to come up with the full 3.5% investment on your own.
| Upfront cost | What it means | Can it be reduced or covered by others? |
|---|---|---|
| Down payment | Your minimum required investment toward the home purchase. | Gift funds from an approved donor may be allowed. |
| Closing costs | Fees and charges related to setting up and finalizing the mortgage. | Seller contributions may help cover some of these costs, subject to FHA rules. |
| Prepaid items | Upfront amounts collected at closing for things like homeowner costs that must be paid in advance. | These are part of total cash to close and are separate from the down payment. |
| Seller contributions | Funds the seller may contribute toward eligible buyer costs. | These can lower your out-of-pocket cash at closing, but they do not replace FHA eligibility requirements. |
Pro Tip: Use our online mortgage calculator to estimate your loan costs.
The FHA loan program offers several benefits for home buyers. One benefit is that the entire down payment can be provided by someone else, in the form of a gift. A family member, for example, could provide you with funds to cover the 3.5% down payment requirement mentioned above.
But it doesn’t have to be a family member. There are other approved sources as well. The money could be donated from a friend, employer, or an approved nonprofit agency or charity. For a complete list of approved funding sources, refer to HUD Handbook 4000.1.
The stipulation here is that the money must truly be a gift. It cannot be a loan. In fact, the donor must provide a signed letter to this effect, stating that they do not expect or require any kind of repayment.
FHA and HUD also allow the seller to contribute money toward the buyer’s closing costs, typically up to 6% of the purchase price.
Pro Tip: Check out our Conforming Loan Limits and FHA Loan Limits pages to help you understand how much you can borrow with a specific mortgage program.
Sammamish Mortgage has been helping home buyers in Oregon, and across the Pacific Northwest since 1992. We offer a variety of mortgage programs for borrowers, including the FHA loan program. If you have questions about this program or would like to get pre-approved for a loan in Oregon, Washington, Colorado, California, or Idaho, please contact a member of our staff. We can help you explore your options and choose the right type of financing for your situation. Or visit our website to get an instant rate quote.
Oregon home buyers using an FHA loan can put down as little as 3.5% of the purchase price or appraised value, whichever is less.
The minimum FHA down payment is based on the purchase price or the appraised value, whichever is less.
Generally, no. For borrowers who qualify for standard FHA financing, 3.5% is the minimum required down payment.
Yes. Borrowers with credit scores of 580 or higher may qualify for the 3.5% minimum down payment. Borrowers with scores between 500 and 579 generally must put down at least 10%.
HUD requires a minimum credit score of 580 for borrowers who want to use the 3.5% down payment option.
Possibly, but a larger down payment is usually required. Borrowers with scores from 500 to 579 generally must put down at least 10%, while borrowers below 500 are generally not eligible.
Yes. FHA guidelines allow the full minimum investment to come from an approved donor, as long as the funds are a true gift and not a loan.
Approved sources can include a family member, friend, employer, or an approved nonprofit agency or charity, subject to FHA and HUD rules.
No. The funds must truly be a gift, not a loan. The donor must provide a signed letter stating that no repayment is expected.
Yes. Seller contributions can help cover eligible closing costs, which can reduce out-of-pocket cash at closing. However, they do not replace FHA eligibility requirements, and the down payment is separate from total cash needed at closing.
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