First-Time Home Buyer Loans in Clackamas County, Oregon

The short answer: The main first-time home buyer loans in Clackamas County are FHA, Conventional 97, HomeReady, VA, USDA, and the state's OHCS FirstHome loan. FHA starts at 3.5 percent down. Conventional 97 and HomeReady start at 3 percent. VA and USDA can require nothing down. Only Conventional 97 and OHCS FirstHome actually require a first-time buyer. The rest are open to anyone who qualifies.

What Makes a First-Time Home Buyer Loan in Clackamas County

Here is the part most buyers do not expect. Most first-time home buyer loans in Clackamas County have no first-time rule at all. FHA, VA, USDA, and HomeReady will lend to a repeat buyer on the same terms. They get the label because their low down payments suit people buying a first home.

Two programs do check. Fannie Mae's standard 97 percent loan needs at least one first-time buyer on the file. The state's OHCS FirstHome loan does too, with exceptions. Both use the same test. You count as a first-time buyer if you have not held an ownership interest in a home in the last three years.

So a buyer who sold a condo in 2021 may count again. A buyer who inherited a share of a parent's house last year may not. Ask me before you assume either way.

This page is the program comparison. It is not the process. My Clackamas first-time buyer checklist walks through the seven steps from credit check to closing. My page on OHCS first-time homebuyer programs covers the state's side in depth. Read this page to pick the loan. Read those two to run the process.

First-Time Home Buyer Loans in Clackamas County Side by Side

The first-time home buyer loans in Clackamas County below are all subject to credit approval and a full loan estimate. The figures come from the agency rulebooks cited in each section.

Read the table by gate, not by down payment. If you fail a program's gate, its down payment does not matter.

FHA: The Credit-Friendly First-Time Home Buyer Loan in Clackamas County

Among first-time home buyer loans in Clackamas County, FHA is the one I reach for first when credit is thin or recovering. HUD sets the rules in Handbook 4000.1.

• 3.5 percent down at a 580 score. HUD calls this the Minimum Required Investment. With a credit score of 580 or higher, you can finance up to 96.5 percent.
• 10 percent down from 500 to 579. Borrowers in that range are limited to 90 percent loan-to-value.
• Mortgage insurance on both ends. The upfront premium is 1.75 percent of the base loan amount, and it can be added to the loan. The annual premium lasts the full term with less than 10 percent down. With 10 percent or more down, it lasts 11 years.
• A $701,500 ceiling. That is the 2026 FHA limit for a one-unit home in Clackamas County.

That last point matters here. A starter home in Oregon City or Milwaukie usually fits under $701,500. A newer townhome in Happy Valley may not. My page on FHA home loans in Clackamas County covers the program in full.

Conventional 97 and HomeReady: 3 Percent Down First-Time Home Buyer Loans

Both of these are Fannie Mae loans at 97 percent loan-to-value. They differ in one gate.

Conventional 97 asks about ownership. Under Fannie Mae's Selling Guide, at least one borrower must be a first-time buyer. The loan must be a fixed rate of up to 30 years on a one-unit home that every borrower lives in. When every borrower is a first-time buyer, homeownership education is required too.

HomeReady asks about income. It reaches the same 97 percent with no first-time rule. Instead, your qualifying income cannot exceed 80 percent of the area median income for the property's location. The same fixed-rate, one-unit, owner-occupied limits apply at that tier. Freddie Mac runs a similar program called Home Possible.

Here is why the pair matters in Clackamas County. The conforming limit is $832,750, well above FHA's $701,500. A first-time buyer shopping near $750,000 in West Linn is over FHA and still inside conventional. And conventional mortgage insurance comes off as you build equity. My page on conventional home loans in Clackamas County explains when. The 3 percent down page shows what that tier costs up front.

One warning for condo buyers. Fannie Mae retired its Limited Review for applications dated on or after August 3, 2026. Many attached condos now need a Full Review. Get the association's questionnaire early.

VA and USDA: Zero-Down First-Time Home Buyer Loans in Clackamas County

Two of the first-time home buyer loans in Clackamas County can finance the whole price. Each has a gate that has nothing to do with money.

VA loans for eligible veterans and service members

The VA says plainly that its home loan program does not require a down payment or monthly mortgage insurance. In place of insurance, most borrowers pay a one-time funding fee. For a first use with less than 5 percent down, it is 2.15 percent of the loan amount. It drops to 1.5 percent at 5 percent down and 1.25 percent at 10 percent down.

Veterans who receive VA compensation for a service-connected disability do not pay the fee. The VA also caps seller concessions at 4 percent of the home's reasonable value. My page on VA home loans in Clackamas County covers entitlement and the full process.

USDA loans in rural Clackamas County

USDA Rural Development's guaranteed loan offers 100 percent financing in eligible rural areas. The gates are firm. Household income cannot exceed 115 percent of the median household income. You must live in the home as your primary residence. And the property must sit inside USDA's eligible area.

That last gate rules out most of the urban county. Happy Valley, Lake Oswego, and Gladstone are generally outside it. Parts of the rural east and south may qualify. Eligibility is set by the exact address, so check it on USDA's map before you fall for a house. My page on USDA-eligible towns in Clackamas County maps the general pattern, and zero-down home loans in Oregon compares both programs.

The State Layer: OHCS FirstHome and NextStep in Oregon

Oregon Housing and Community Services, or OHCS, is the state's housing finance agency. It does not lend to you directly. It buys loans that approved lenders make, under Oregon Administrative Rules chapter 813, division 20.

The program has changed, and older articles have not caught up. In November 2024, OHCS said it was phasing out the traditional Oregon Bond Residential Loan. Two Flex Lending products replaced it for new buyers.

• FirstHome offers a below-market rate to first-time buyers, veterans, and previous owners buying in Targeted Areas. OHCS paired it with a down payment assistance loan.
• NextStep works the same way but drops the first-time buyer requirement. It carries an income cap instead.

For bond-funded loans, the state rule points to Section 143 of the Internal Revenue Code. That is where the three-year ownership test comes from. First-time buyers must also take a homebuyer education class through a certified housing counselor. Income limits, price limits, and the assistance amount are set in the OHCS guideline manual and change. I check the current manual on every file rather than quote a number here.

OHCS loans sit on top of FHA, VA, USDA, or conventional financing. They are a layer, not a seventh loan type. My page on down payment assistance in Clackamas County covers the county and city programs that can stack with them.

Which First-Time Home Buyer Loan Fits Your Clackamas County Purchase?

These are the patterns I see most often with first-time home buyer loans in Clackamas County. Your file may break the pattern, so treat them as a starting point.

• You served. Start with VA. No down payment and no monthly mortgage insurance usually beat every other row.
• Your credit score is between 580 and the low 600s. Start with FHA. Its credit rules were written for you.
• You have 3 percent saved and have not owned in three years. Price Conventional 97 against FHA on the same house.
• You owned before, but your income is modest. Look at HomeReady. It has no first-time rule.
• The price is above $701,500. FHA is out. Conventional is the likely path up to $832,750.
• The house is out past Sandy or Estacada. Check the address for USDA before anything else.
• Your cash to close is the real problem. Ask about OHCS assistance and county programs before you lower your price range.

Not sure what you can spend in the first place? My guide on how much house you can afford in Oregon works through it.

How to Choose Among First-Time Home Buyer Loans in Clackamas County

1. Answer the ownership question. Why it matters: it opens or closes Conventional 97 and OHCS FirstHome.
2. Pull your credit. Why it matters: 580 is the line between 3.5 and 10 percent down on FHA.
3. Check your income against the area median. Why it matters: it decides HomeReady, USDA, and the OHCS products.
4. Check the address. Why it matters: USDA is set by location, and so are the HomeReady income limit and OHCS Targeted Areas.
5. Size the loan against both limits. Why it matters: $701,500 caps FHA and $832,750 caps conventional in Clackamas County.
6. Price the two strongest options on the same house. Why it matters: the monthly payment is only part of the cost. When the mortgage insurance ends matters too. My pre-approval guide covers what to have ready.

Frequently Asked Questions About First-Time Home Buyer Loans in Clackamas County

What loans are available for first-time home buyers in Clackamas County?

The main options are FHA, Conventional 97, Fannie Mae HomeReady, VA, USDA, and the Oregon Housing and Community Services FirstHome loan. FHA starts at 3.5 percent down with a credit score of 580 or higher. Conventional 97 and HomeReady start at 3 percent down. VA and USDA can finance the full price for eligible buyers. OHCS loans sit on top of those loan types and can be paired with state down payment assistance. All are subject to credit approval and a full loan estimate.

Do I have to be a first-time buyer to use these loans?

Usually not. FHA, VA, USDA, and HomeReady have no first-time buyer requirement. Fannie Mae's standard 97 percent loan requires at least one borrower who is a first-time buyer, and the OHCS FirstHome loan requires first-time buyer status with exceptions for veterans and for purchases in Targeted Areas. Both define a first-time buyer as someone who has not held an ownership interest in a home in the last three years.

What is the minimum down payment for an FHA loan in Clackamas County?

Under HUD Handbook 4000.1, the minimum is 3.5 percent of the adjusted value when your credit score is 580 or higher. With a score between 500 and 579, the maximum loan-to-value is 90 percent, so you need 10 percent down. FHA also charges an upfront mortgage insurance premium of 1.75 percent of the base loan amount and an annual premium. The 2026 FHA limit for a one-unit home in Clackamas County is $701,500.

What is the difference between Conventional 97 and HomeReady?

Both are Fannie Mae loans that reach 97 percent loan-to-value on a fixed-rate loan for a one-unit home you live in. Conventional 97 requires at least one first-time buyer on the loan but has no income limit. HomeReady has no first-time buyer requirement, but your qualifying income cannot exceed 80 percent of the area median income for the property's location. Freddie Mac offers a similar income-based program called Home Possible.

Can I get a zero-down home loan in Clackamas County?

Possibly, through VA or USDA. VA loans do not require a down payment for eligible veterans and service members, though most borrowers pay a one-time funding fee unless they receive VA disability compensation. USDA guaranteed loans offer 100 percent financing when household income does not exceed 115 percent of the median household income and the home is in an eligible rural area. Most of urban Clackamas County is outside the USDA area, so check the exact address first.

Is the Oregon Bond Residential Loan still available?

In November 2024, Oregon Housing and Community Services announced it was phasing out the traditional Oregon Bond Residential Loan in favor of two Flex Lending products. FirstHome serves first-time buyers, veterans, and previous owners buying in Targeted Areas, with a below-market rate and optional down payment assistance. NextStep drops the first-time buyer requirement and carries an income cap. You must work with an OHCS-approved lender, and income and price limits change, so confirm current terms before you plan around them.