First-time home buyers get help

Tuesday, April 12, 2005
SCOTT LEARN
The Oregonian

After 12 years, Joanna Gordon had enough of the monotonous white walls of her Lents apartment in Southeast Portland. Enough of taupe carpets. Enough of her teenage daughter sleeping in a curtained-off dining room.

"In this little, dingy apartment, I had dropped at least $50,000 and had nothing to show for it," Gordon said, "except we weren't homeless."

Gordon, a 42-year-old college graduate, looked for a house for months. But she concluded she wasn't making enough in the receiving and inventory department of a Christian supply house to buy a home in the city's rapidly appreciating market.

Then she tapped into two loan programs for first-time home buyers, one supported by state money and the other by the Portland Development Commission.

Now Gordon, her 14-year-old daughter, Heather, and her 17-year-old son, Nick, are living in a $122,000 home she bought and renovated five blocks away near Lents Park. The hardwood floors are newly finished. The back yard includes a new deck and flowering apple tree. And Heather and Nick have their own -- brightly painted -- bedrooms.

As the annual spring real-estate frenzy kicks in, housing officials say more first-time buyers could be drawing from the same programs that helped the Gordon family over the threshold.

In Multnomah County and statewide, those programs include cut-rate loans for buying and renovating homes. In Portland, the Portland Housing Center and other nonprofits offer monthly classes on home buying and financial health that can steer first-timers toward the best financial deal.

Oregon uses tax-exempt bonds to subsidize mortgages up to three-quarters of a percentage point less than comparable market loans for first-time buyers earning $67,900 or less in the Portland area. In 2004, the program backed 1,357 loans through banks and nonprofits, said Jon Gail, homeownership program manager for Oregon Housing and Community Services.

The Portland Development Commission offers loans that help homeowners buy and renovate homes, including one citywide program that has no income limits.

In the Lents and Interstate urban renewal areas, the agency also offers a "shared-appreciation mortgage" for renovations that lets lower-income buyers avoid repaying the loan until they sell the house. If a buyer sells before holding it 25 years, the development commission gets a share of the home's appreciation.

Gordon paid $2,000 down plus closing costs, tapping into the development commission for the state-subsidized mortgage at 4.5 percent for 30 years. Her monthly payment is $760.

She also took out a $30,000 shared-appreciation mortgage, using it to renovate a badly dated bathroom, replace asbestos-tiled floors and old wiring, and add a new deck, dishwasher and gas fireplace.

Without the subsidies, Gordon said, it's doubtful she would have been in a house by the time her children graduated from high school. Now, with the low monthly payments, she's able to pay a bit extra each month with the goal of knocking five years off her mortgage.

"In 25 years, right about the time I retire, I will own this house free and clear," she said. "That is my goal."