Some resources for first-time buyers

Portland Housing Center

Offices in Northeast Portland and Beaverton

(503) 282-7744

portlandhousingcenter

.org

Down payment assistance, debt and credit counseling, other services

Home Ownership Opportunities Website Northwest

http://hownw.com

Interactive site built by the Portland Metropolitan Association of Realtors, with information about federal, state and non-profit home ownership programs

Falmeta and Samira Hyato are shy around visitors, but they love to show off their house. Falmeta, 5, pushes a visitor in the back so he'll hurry through a tour more quickly.

The question "Do you like living here?" brings two bright smiles. To "Do you like it better than the apartment where you used to live?" Samira, 4, nods emphatically.

Since February 2014, Falmeta and Samira have had a fenced, grassy yard to play in. It has tree branches to grab and front-porch handrails to pull on. It's a place for them to feel at home.

Their mom, Amina Chakisso, bought this comfortable place in southeast Portland's Hazelwood neighborhood last February for $173,900. The single mother was able to do so, she said, because she got a $15,000 grant under the now-expired LIFT program. Without that money, she said, "I can't buy it."

Economists and other analysts say first-time homebuyers are critical to the housing market. When they buy a house and fill it with furniture, cookware, appliances and electronics, they contribute to the economy in important ways.

Over time, their properties should become more valuable, too. That makes it more likely they'll build household wealth.

But it's increasingly challenging for people looking for their first houses in Portland, a city where the housing supply is pinched and incomes aren't keeping pace with increases in real estate prices. There are other issues: Rising burdens from student loans keep some would-be homebuyers on the sidelines; others may find themselves competing for a modest house with all-cash buyers who aim to flip or demolish it.

And the challenges for first-time buyers are getting stiffer, if anything.

Teri Toombs, principal broker for Living Room Realty and a board member of the nonprofit Portland Housing Center, which administered the LIFT grant program, said the deck is stacked against many trying to buy their first houses in Portland.

She cited a client, a nurse with children and an obligation to repay student loans. Even with what Toombs called "a bright future," her client worries about finding a house for her family.

"She's increased her budget to $275,000. She started at $180,000 but saw 'This isn't going to work for my kids,'" Toombs said. "We're looking in Milwaukie, in deep Southeast Portland, in Parkrose. She's becoming discouraged."

The most significant hurdle for many is the need to assemble enough money for a down payment, inspections and closing fees.

"That's the biggest barrier," said Peg Malloy, executive director of the Portland Housing Center.

With the help of the housing center, Chakisso arranged a primary and secondary mortgage that cost her less than $900 a month, said Heidi Martin, lending manager there. That's a level she can afford on her salary as a caregiver in a group home.

The LIFT program, funded with $200 million from the Wells Fargo Foundation with NeighborWorks America and 30 local housing nonprofits around the country, was a godsend for 259 Portland families. Each received $15,000 forgivable loans to apply to down payments and closing costs. A year later, said the Housing Center's Malloy, none have dropped out and a few have paid off their loans early.

The LIFT grants are all gone, though, leaving first-time homebuyers to try to patch together other resources to clear the hurdles to homeownership in the city.

Portland's very popularity works against the first-timers. Houses in desirable neighborhoods already are priced out of reach of most, and competition to buy them is stiff.

Toombs said she listed a "decrepit" house in the close-in Overlook neighborhood on a recent Friday. She said she knew no first-time buyer could get a mortgage for it because it would require another $100,000 in repairs. So she listed it for $249,000 and required an all-cash purchase.

She had 10 offers two days later. The buyer, who plans to renovate the house, ended up paying $276,000. She guesses it will eventually go back on the market for $450,000 or so.

Will a first-time buyer like Chakisso be able to buy a house in 10 years?

"Maybe in Gresham," said Toombs.

-- Mike Francis

mfrancis@oregonian.com

503-412-7014

@oregonianmike