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Oregon, like most states, has rules and regulations that homebuyers need to consider. Buyers also need to know about the home-related taxes they may need to pay, as well as mortgage loan limits in the state.
Most sellers in Oregon are required by law to disclose to buyers any significant defects that might affect the value or desirability of the property and might not be readily apparent to a buyer. The seller discloses this information on a special seller’s property disclosure statement. In Oregon, the form must be provided to any buyer who makes a written offer on a home, unless the seller qualifies for one of a small number of exclusions or the buyer is not buying the property as a residence for themselves or a member of their immediate family. Once a seller provides a disclosure statement, a buyer has just five days to revoke their offer.
Oregon is an escrow state. While some states require an attorney to be present or to handle a mortgage closing, Oregon real estate closings are typically handled by an escrow officer, a neutral third party or a title company representative who ensures the transaction is carried out correctly for both the buyer and seller.
Oregon allows both judicial and non-judicial foreclosures. In a judicial foreclosure, a court oversees the foreclosure process. In a non-judicial foreclosure, lenders are allowed to foreclose on a home without a court judgment. However, lenders are still required to alert borrowers to the possibility of a loan default and also publish in a newspaper the possibility of a sale before putting the home up for a public auction. With foreclosures, Oregon, unlike some states, doesn’t allow for deficiency judgments. This means a lender cannot sue the borrower to recoup any difference between the value of the property and the mortgage balance.
Oregon is an equitable distribution state. This means during a divorce, marital assets (including property) and debts are required to be divided in an equitable and fair manner, rather than split 50/50, as they would be in a community property state.
In an equitable distribution state, courts generally step in only if divorcing spouses can’t agree on how to fairly divide up assets and debts. If that’s the case, each party must draw up a statement that lists debts and assets, such as property, so the court can make a determination.
In most of Oregon, neither buyers nor sellers are required to pay real estate transfer taxes when real estate changes hands. There is, however, at least one exception: Residents in Washington County near Portland pay transfer taxes at a rate of $1 for every $1,000 (or fraction thereof) of the selling price.
According to Tax-Rates.org, the median property tax bill in Oregon is now $2,241 per year based on a home median price of $257,400. In Oregon, property taxes are based on a home’s maximum assessed value (MAV); by law, a property’s MAV cannot increase more than 3% each year, unless there are changes to the property, such as an addition.
Oregon offers property tax exemptions for disabled veterans or surviving spouses of veterans. For 2019, this particular exemption allows eligible homeowners to exempt either $22,028 or $26,435 of a home’s assessed value from property taxes; the exemption amount increases 3% each year. The lower exemption amount has an income limit. The higher exemption doesn’t have an income limit, but the homeowner must either be a veteran with a service-connected disability or the surviving spouse of a veteran who died because of a service-related injury or illness. The lower exemption does not require that the veteran’s disability or death be connected to their services.
The conforming loan limit for mortgages purchased by either Fannie Mae or Freddie Mac is currently $484,350 for single-family homes in every county in Oregon. This is the same limit that now applies to most of the U.S (in high-cost areas the limit is $726,525).
Conforming loan limits cap the size of a mortgage that Fannie and Freddie are willing to buy as part of their efforts to stabilize the mortgage market and make loans more affordable. For consumers who have good credit, conforming loans usually offer lower interest rates. Loans above the limit are known as jumbo loans, and they tend to be riskier and command higher interest rates.
Prospective homeowners in Oregon have access to several in-state programs that can make buying more affordable.
Oregon Housing and Community Services, the state’s housing finance agency, issues mortgage revenue bonds to help fund below-market-rate mortgages for low- to moderate-income homebuyers. The agency offers two options:
Who qualifies:
Borrowers must meet annual gross household income limits that depend on household size and whether or not the home is located in a targeted area. If the home you hope to buy is in a non-targeted area, you’ll need to be a first-time homebuyer, which means not owning and occupying a primary residence anytime during the three years before you close.
Oregon Housing and Community Services also awards funds to local organizations to administer the Home Ownership Assistance Program for low-income families and individuals who are at or below 80% of the area median income.
The program offers first-time homebuyers who complete a homebuyer education course up to $15,000 to put toward a down payment or closing costs. Funds are awarded and administered by a number of agencies throughout the state. You can find a list of those agencies here.
Proud Ground is a Portland-based nonprofit that helps make homeownership more affordable for low- to moderate-income residents in five Oregon counties: Clackamas, Clark, Lincoln, Multnomah and Washington.
The organization offers financial assistance, such as grants that help lower the purchase price of homes for first-time homebuyers. Proud Ground maintains a stake in the land; and if the buyer later sells, they receive a share of the home’s appreciated market value.
Buyers who qualify:
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