Buying Before Selling in Clackamas County: Bridge Loans and HELOCs

The short answer: Buying before selling in Clackamas County is a financing question first. The lender will usually count both house payments unless your current home is under contract with its financing contingency cleared. The common tools are a HELOC on the current home, a bridge loan, or keeping the old house as a rental. A recast can lower the new payment once the old house sells.

Why Buying Before Selling in Clackamas County Is a Financing Question

Most people frame this as a timing problem. It is really a qualifying problem.

Until the old house closes, you own two homes. The underwriter has to decide whether you can carry both. The underwriter also has to decide where your down payment comes from. Both answers come from Fannie Mae's Selling Guide on a conventional loan. Those rules decide which of the options below you can actually use.

I see this file most often with move-up buyers. A family in Milwaukie, Gladstone or Oregon City has built real equity. The next house is bigger, often in Happy Valley or Damascus. The equity is what makes the move possible, and it is stuck until the sale closes.

There is no single right tool for buying before selling in Clackamas County. There is a right tool for your equity, your income, and your nerves. This page walks through each one and the rule that governs it.

The Two-Payment Test When Buying Before Selling

Start here, because it decides everything else.

Fannie Mae Selling Guide B3-6-06 covers a current home that is pending sale but will not close before the new purchase. In that case, the lender must qualify you using both payments. That means the current home's full payment and the proposed new one. The payment in each case is PITIA: principal, interest, taxes, insurance, and any association dues.

There is one clean way out. Fannie Mae does not require the current home's payment in your ratios if the lender has two documents:

• the executed sales contract on your current home, and
• confirmation that any financing contingencies on that sale have been cleared.

That second item matters. A signed contract alone is not enough. Your buyer's own loan has to be past its financing contingency. In practice, that means your sale is a few weeks along before the old payment drops out of your math.

If you cannot qualify carrying both payments, your options narrow fast. That is why I run this test before you tour a single house. My guide to debt-to-income ratios in Clackamas County shows how the ratios are built.

Using a HELOC on Your Current Home for the Down Payment

For many move-up buyers, this is the simplest bridge.

A home equity line of credit, or HELOC, borrows against the house you already own. You draw the down payment from the line and close on the new house. When the old house sells, the HELOC is paid off from the proceeds.

Fannie Mae allows it. Selling Guide B3-4.3-15 treats borrowed funds secured by an asset as an acceptable source for the down payment, closing costs and reserves. Real estate is on the list of acceptable assets. The reasoning is that the loan is a return of your own equity.

The catch is the payment. Under the same topic, the lender must count the HELOC payment as a debt. If the line does not require a monthly payment, the lender calculates an equivalent amount and counts that instead. So the HELOC solves the down payment. It does not solve the two-payment test. It adds a third payment on top.

Timing matters too. Many HELOC lenders will not open a new line on a home that is already listed. Open the line before the listing goes live. Ask your HELOC lender about this rule before you call a listing agent.

There is a variation worth knowing. Some buyers use the HELOC to buy the new house with cash, then refinance it within six months. My page on the delayed financing exception in Oregon explains that path. It makes the offer look like cash to the seller.

Bridge Loans for Buying Before Selling in Clackamas County

A true bridge loan, sometimes called a swing loan, is a short-term loan against your current home. It does the same job as a HELOC, with different terms and a set payoff event.

Fannie Mae Selling Guide B3-4.3-14 accepts a bridge loan as a source of funds on two conditions. First, the bridge loan cannot be cross-collateralized against the new property. It has to be secured by the old house alone. Second, the lender must document that you can carry the payments on the new home, the current home, the bridge loan and your other debts, all at once. Fannie Mae sets no limit on the term of a bridge loan.

Read that second condition again. A bridge loan does not get you out of carrying two homes. It gets you the cash to close. You still have to qualify as if the old house might not sell for a while.

So how do you choose between a HELOC and a bridge loan? A HELOC is often cheaper to set up and stays open after the sale. A bridge loan is built for a single event and is often easier to get once the house is listed. Pricing on both changes by lender and by week. I compare them for your file rather than quoting either one here.

Keeping the Old House as a Rental Instead of Selling

Some buyers decide not to sell at all. The Milwaukie house becomes a rental, and its rent helps carry the payment. Fannie Mae calls this a departing residence, and Selling Guide B3-3.8-05 sets the rules. The topic was updated on September 2, 2026.

Here is how the rental income is counted:

• Market rent is documented, not a lease. The lender can use an appraisal with market rents, a Form 1007 rent schedule, or market tools such as Zillow, Redfin or the MLS. With market tools, the lender needs at least three comparable rentals. Lease agreements are not permitted for a departing residence.
• Only 75 percent of the rent counts. The lender multiplies the monthly market rent by 75 percent. Then it subtracts the old home's full payment.
• A positive result only offsets the old payment. If the number is positive, it can cancel out the old home's payment. It is not added to your income. If the number is negative, the shortfall goes into your debt-to-income ratio.
• New landlords need extra reserves. If you have less than 12 months of property management experience, you need six months of reserves covering the old home's payment. That is on top of any other reserves your file requires.

A simple test tells you whether this works. Take 75 percent of what the house would rent for. If that covers the payment, the rental does not hurt your ratios. If it falls short, you carry the gap.

Becoming a landlord also brings Oregon's landlord-tenant rules with it. My guide to Portland versus Clackamas County landlord rules covers what changes depending on where the rental sits.

Selling First or Writing a Contingent Offer

The oldest answer is still an option. You can sell first and rent for a few months, or write an offer that depends on your sale.

Either way, Fannie Mae has a rule for counting money you have not received yet. Selling Guide B3-4.3-10 lets the lender qualify you on anticipated sales proceeds when the current home is listed but not sold. The estimate depends on whether a sale price is set:

Fannie Mae notes that the 10 percent adjustment may change with market conditions. Your lender can apply a larger haircut in a soft market.

One more rule catches people. If the sale proceeds are your down payment, the lender needs the settlement statement from the old sale. It has to arrive before or at the same time as the new closing. That is why these files often close back-to-back on the same day.

A contingent offer is a negotiating question more than a loan question. In a busy week, a seller with other offers may pass on one that depends on a sale. In a slower week, the same offer may be accepted. Your agent reads that market, and I make sure the financing side is solid before you write.

A Worked Example: Moving From Milwaukie to Happy Valley

Here is how the numbers look on a typical move-up file. The figures are illustrative, not a quote.

Say your Milwaukie house is listed at $600,000 and you owe $310,000. You have no contract yet. The lender's estimate is 90 percent of $600,000, which is $540,000. Subtract the $310,000 lien, and the estimated proceeds are $230,000.

Now say you accept an offer at $590,000, with $38,000 in sales costs. The estimate becomes $590,000 minus $348,000, or $242,000. Once your buyer's financing contingency clears, the Milwaukie payment can drop out of your ratios.

Before that happens, you might open a HELOC to fund the Happy Valley down payment. The lender counts its payment, plus both house payments, until the old house closes. After it closes, the HELOC is paid off from the proceeds. You can read more about each side on my Milwaukie home loans and Happy Valley home loans pages.

The new house might also cross the conforming limit. For 2026, that limit is $832,750 on a one-unit Clackamas County home. My Clackamas County jumbo loan checklist covers what changes above that line.

The Recast: Lowering the Payment After Buying Before Selling

This is the step most buyers never hear about.

Say you bought the new house with a smaller down payment because your equity was still stuck. Now the old house has sold, and you have the proceeds. You can pay a large lump sum against the new loan's principal and ask the servicer to recast it.

A recast re-figures your monthly payment on the lower balance. Your interest rate stays the same. Your remaining term stays the same. There is no new loan, no new appraisal, and no new closing. The payment simply drops to match the smaller balance.

Not every loan type or servicer allows a recast, and servicers set their own minimums and fees. Ask your servicer about both before you rely on it. My guide on mortgage recast vs refinance covers which loan types can be recast and what to ask. If you are wondering whether a full refinance makes more sense, my guide on whether you should refinance now covers that separate decision.

The recast also changes how you plan the purchase. If you know you will recast, you can put less down at first and keep more cash on hand during the overlap. That can make the two-payment months easier to carry.

How to Plan Buying Before Selling in Clackamas County

1. Run the two-payment test first. Why it matters: if you qualify carrying both homes, every option is open. If you do not, you need the sale under contract before you can buy. Start with how much house you can afford in Oregon.
2. Estimate your equity honestly. Why it matters: the lender will use 90 percent of the listing price minus liens. Use the same math at home so there are no surprises.
3. Open a HELOC before you list, if you want one. Why it matters: many lenders will not open a line on a home already on the market.
4. Get pre-approved on the new house with the right assumptions. Why it matters: your pre-approval should state whether it counts both payments. My page on mortgage pre-approval in Clackamas County explains what that letter says.
5. Decide sell, rent or bridge. Why it matters: each path has a different paper trail. A rental needs rent comps. A sale needs the contract and cleared contingencies. A bridge needs its own approval.
6. Plan the recast. Why it matters: if you will pay down the new loan after the sale, confirm your servicer's recast rules before you close.

I am a solo broker and I answer my own phone. The person who maps out your move is the person who closes both ends of it with you.

Frequently Asked Questions About Buying Before Selling in Clackamas County

Can I buy a new house before I sell my current one in Clackamas County?

Yes, and it is common with move-up buyers. The question is whether you qualify. On a conventional loan, Fannie Mae Selling Guide B3-6-06 requires the lender to count both your current home's payment and the new payment if the current home will not close first. You can avoid counting the old payment once you have an executed sales contract and confirmation that the buyer's financing contingencies have cleared. If you cannot carry both payments, the usual answer is to get the old house under contract before you buy. Approval is subject to underwriting and credit approval.

Will the lender count both mortgage payments while I own two homes?

Usually, yes. Under Fannie Mae Selling Guide B3-6-06, when your current principal residence is pending sale but will not close before the new purchase, the lender must use both the current payment and the proposed payment, including taxes, insurance and any association dues. Fannie Mae will not require the current payment if the lender has the executed sales contract on your current home and confirmation that any financing contingencies have been cleared.

Can I use a HELOC on my current home for the down payment?

Yes, on a conventional loan. Fannie Mae Selling Guide B3-4.3-15 treats borrowed funds secured by an asset, including real estate, as an acceptable source for the down payment, closing costs and reserves. The lender must count the HELOC payment as a debt when qualifying you, and if the line has no required monthly payment, the lender calculates an equivalent amount and counts that. Many HELOC lenders will not open a new line on a home that is already listed, so open it before the listing goes live.

What is the difference between a bridge loan and a HELOC?

Both borrow against your current home to fund the new purchase. A bridge loan, sometimes called a swing loan, is a short-term loan built around the sale of the old house. A HELOC is a revolving line of credit that can stay open after the sale. Fannie Mae Selling Guide B3-4.3-14 accepts a bridge loan as long as it is not cross-collateralized against the new property and the lender documents that you can carry the new home, the current home, the bridge loan and your other debts. Fannie Mae sets no limit on the bridge loan's term. Pricing on both products varies by lender.

Can I use rental income from my old house to qualify for the new one?

Yes, if you are keeping it as a rental. Fannie Mae Selling Guide B3-3.8-05, updated September 2, 2026, calls this a departing residence. The lender documents market rent with an appraisal that includes market rents, a Form 1007 rent schedule, or market tools such as Zillow, Redfin or the MLS with at least three comparable rentals. Lease agreements are not permitted for a departing residence. The lender takes 75 percent of the monthly market rent and subtracts the old home's full payment. A positive result can only offset that payment; a negative result goes into your debt-to-income ratio. If you have less than 12 months of property management experience, you also need six months of reserves covering the old home's payment.

What is a mortgage recast after my old house sells?

A recast is when you pay a lump sum against your loan's principal and the servicer re-figures your monthly payment on the lower balance. Your interest rate and remaining term stay the same, and there is no new loan or new closing. Buyers who purchase before selling often put less down at first, then recast once the sale proceeds arrive. Not every loan type or servicer allows a recast, and servicers set their own minimums and fees, so confirm the rules with your servicer before you rely on it.