Oregon Adopts First-Time Homebuyers Savings Program

Everyone has a story to tell about the first time they bought a home.

Each story usually begins with a wave of emotions, Excitement turned into anxiety which turned into stress when you applied for a loan, or when you first heard what kind of down payment was needed or what the closing costs and fees were going to be once they were added to your initial payment due.

Or, if you’ve never owned a home, is one of the reasons because the financials are so daunting that you never thought you could have the wherewithal to make it happen?

Finding homes you can afford in Oregon is not that easy right now, especially for those Oregonians looking to buy for the first time. The housing market is sluggish because homes are expensive and it takes too long for young people and renters to save enough money for a down payment on a home. High rents, student loan payments and wages that don’t keep up with the cost of living are tough obstacles to overcome.

But help is now available.

Thanks to recently passed legislation, the Oregon First-Time Homebuyers Savings Program addresses these problems.

The Oregon First-Time Homebuyers Savings Program will allow individuals to take a state tax deduction for saving money towards a down payment on their first home.

The savings will be stored in a special bank account – like a college savings plan. Deposits into the account will be tax deductible, up to a limit, and the interest gained on the account will be tax free. Here’s how the plan works:

• The funds in the account would have to be used for a down payment or other closing costs associated with purchase or construction of a home.
• The account can be opened at any Oregon bank or credit union.
• The savings account would be available to people who have never owned a home or those who have not owned a home in the last three years.
• Families could save up to $10,000 annually and up to $50,000 including deposits and interest earned on the account over a span of 10 years.

And remember, this isn’t just a benefit to first-time homebuyers.

It’s a benefit to everyone, including current homeowners, because home ownership helps improve neighborhoods, which in turn attracts businesses, which creates jobs and improves our local economy.

So, there’s a stake in this for all of us.

Will it immediately solve the affordable housing issue here in Oregon? No. But, it is certainly an added benefit that will help with home purchases down the road.

Other parts of the housing legislation that was passed included more affordable housing options and better housing services for veterans and the homeless. In total $1.73 million was approved to identify housing solutions in Oregon.