There is another LOAN PROGRAM available now that again rewards first-time homebuyers in the Portland area.  And, remember if 1^st-time homebuyers purchase then 2^nd time homebuyers move on and 3^rd time homebuyers get an opportunity to move up.  Hopefully, it’s a “trickle up” effect and can be another way to stimulate the local housing market!!  The definition of “first-time home buyer” for this particular program is not having owned a home in FIVE YEARS.  This interest rate coupled with the $8000 tax credit for first-time buyers plus lower housing prices should make a real estate purchase look very attractive:

Up to 80% loan-to value (in other words:  20% down or more)

$417,000 maximum loan amount ($521,250 purchase price)

3.75% initial fixed rate for two years

5.75% fixed rate for years 3 – 30

Prepayment penalty if the property is refinanced within 1^st 4yrs

NO prepayment penalty if home is sold in 1^st 4yrs

Minimum credit score of 700

Single-Family homes and Duplexes only.

No manufactured homes or new-construction

For 80-85% loan-to-value  (in other words:  15-20% down)

Add 0.50% to rate for mortgage-insurance

Mortgage Insurance (required by lenders if less than 20%down) falls off after value is 80% or less (minimum 12mo from purchase date)

Obviously, this would mean you would definitely have one year (the 3^rd year) of an (at present) over market interest rate of 5.75% (they’ve presently been hovering plus or minus 5%).  In my mind, this would only be prudent if you knew this was a short-term purchase due to a known move OR plans to move up OR move down due to expanding/contracting family plans, etc.  Otherwise, if you had that kind of money for a downpayment and a credit score of 700 (or better), you’d do better obtaining a typical conventional loan with an interest rate of around 5%.  But, it could make a short-term difference for a first-time buyer struggling to purchase their first home with plans to move onward & upward.  And, of course, you could refinance without penalty after 4 years or sell the home anytime within that 4 year period (but , we don’t know what interest rates will be in 4 years).  Call or write for more info OR just to brainstorm…..jj