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Eugene, Oregon is a thriving college town with a laid-back attitude and easy access to outdoor recreation.
It’s also a great place to buy a home, with a long history of stable home prices and relative affordability compared to other Pacific Northwest cities.
In this guide, we’ll explore two of the most popular mortgage loan options available — FHA vs conventional in Eugene, OR. This information will help you choose the best financing option for your unique situation.
Eugene, Oregon is a mid-sized city of about 178,000 residents. It’s known for its natural beauty, environmentally conscious lifestyle, and strong arts and culture scene (thanks in part to the University of Oregon).
Eugene is a classic “college town” at heart, with a laid-back vibe, well-educated populace, and progressive values. It offers easy access to outdoor activities like hiking, biking, and kayaking, all within reach of the coast and the Cascade Mountains.
It’s also relatively affordable, when compared to other West Coast and western U.S. cities.
When this Eugene OR mortgage guide was published in late 2024, the median home price in Eugene, Oregon was around $468,000. By comparison, Portland had a median price of around $524,000, while the city of Seattle was hovering around $850,000.
Let’s switch gears now and talk about financing. Most home buyers in Eugene either use a conventional or FHA loan to finance their purchases.
A smaller percentage of buyers use the VA loan program to purchase a home. But that program is limited to military members, veterans, and certain qualifying spouses.
The rest of this guide will focus on the key distinctions between FHA and conventional loans, in particular. The main difference between them has to do with government involvement.
Most Eugene, Oregon home loans fall into one of these two categories. The VA loan program for military members makes up a smaller slice of the pie.
Here are the most important factors to consider when choosing between an FHA or a conventional mortgage loan in Oregon:
FHA loans in Eugene, OR typically have more flexible credit requirements. This makes them well suited for borrowers with credit-related issues in the past that might have resulted in a lower score.
Technically, you could qualify for the FHA loan program with a credit score as low as 500. But you’ll need a 580 or higher to qualify for the minimum 3.5% down payment.
Conventional loans, on the other hand, generally require a credit score of 620 or higher for approval. This is a general rule; exceptions can be made for otherwise well-qualified borrowers.
The point here is that the FHA loan program is generally more flexible and “forgiving” when it comes to credit histories. And we’ve covered the main reason for this already. These loans are insured by the government, which reduces the lender’s risk.
FHA loans allow a down payment as low as 3.5% of the home’s purchase price, for those with credit scores of 580 or above. This feature appeals to first-time home buyers in Eugene, who often have limited savings to cover the upfront investment.
Conventional loans in Eugene, OR sometimes require a larger down payment, especially for more expensive homes. Some conventional loan programs offer down payments as low as 3%, but those programs are limited to specific groups such as first-time buyers.
If you can afford to make a down payment of 20% or more on a conventional loan, you could avoid paying mortgage insurance. So let’s talk about that next.
Home buyers in Eugene who make a relatively small down payment often have to pay for mortgage insurance. This is true for both FHA and conventional loans, but with some key differences.
Mortgage insurance protects the lender in case the borrower is unable to repay the loan, a situation known as a “default.”
Here are the general rules for both loan types:
FHA loans have specific property requirements to ensure the home is safe and structurally sound. Conventional loans in Eugene, OR tend to be more flexible, making them a good option if the property needs minor repairs that FHA standards might flag.
With an FHA loan, the required home appraisal will determine the market value as well as the overall condition of the property. With a conventional loan, the appraisal focuses solely on the market value.
FHA loans have specific county-based limits, which can be lower than conventional loan limits.
In 2024, for example, the FHA loan limit for a single-family home in Lane County, Oregon was $498,257. In contrast, the conventional loan limit for this county was $766,550, with “jumbo” financing available above that range.
Because FHA loans are backed by the federal government, lenders are more willing to offer favorable terms to borrowers who might not qualify for conventional loans.
Conventional loans are not backed by the government, so you’ll need to have excellent credit and income standards to qualify.
If you’re planning to buy a moderately priced home in Eugene (one that’s close to the median home price), both the FHA and conventional loan options could work. But those home buyers purchasing higher-end properties typically have to use conventional financing.
Sammamish Mortgage serves home buyers and homeowners all across the Pacific Northwest, including Eugene, OR. Visit our website to get an instant rate quote or contact us if you have questions about FHA or conventional loans.
Whether you’re buying a home or ready to refinance, our professionals can help.
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No Obligation and transparency 24/7. Instantly compare live rates and costs from our network of lenders across the country. Real-time accurate rates and closing costs for a variety of loan programs custom to your specific situation.