Oregon home buying program suspended

PORTLAND — A state agency has suspended a popular program for first-time home buyers, citing concerns raised by the Oregon state treasurer's office about the impact of a proposed state spending limit.

The Oregon Bond program helps low and moderate-income people buy their first homes by providing low-interest financing and cash assistance. The program is funded through the sale of bonds. More than 1,000 families participated in it in 2005.

The Oregon Housing and Community Services agency says it doesn't want lenders, buyers and others to make long-term commitments the state may not be able to follow through on if Measure 48 passes.

"We didn't want to get lenders out there funding loans that we wouldn't be able to fund until December if it fails or never if it passes," said Lynn Schoessler, housing finance section manager for the program.

Kate Richardson, chief of staff for the Office of the Treasurer, said the state is currently reviewing the measure's language to find out what other long-term programs may be affected by the proposal.

Backers of Measure 48 countered that Treasurer Randall Edwards, a Democrat, is pulling a political stunt and is not interpreting the measure correctly.

Measure 48 would limit the increases in state spending to the percentage increase in inflation plus the percentage increase in population. State experts say it would reduce state spending on schools, public safety and social services by $2.2 billion in the next two-year budget period.

"The treasurer is trying to score political points at the expense of Oregon homeowners," Matt Evans, advocate and spokesman for Measure 48, said via e-mail. "While it's 11 months before the measure would start to restrain spending, it's only two months until ballots go out."

The state says the language in the measure is unclear and could also affect the state's ability to issue bonds and lower its status with rating agencies.

The treasurer's office alerted state agencies this week that the pending measure could have an impact on long-term planning; Edwards' staff is already rescheduling the calendar for handling bonds.

Richardson said she is not sure what other programs may need to change plans.

Lynn Schoessler, housing finance section manager for the home-buying program, said the need for the program has increased as interest rates rise, making it more difficult for first time home buyers to find an affordable way to make their purchase.

Evans said Oregon homeowners should be "outraged that the treasurer would sell them down the river to try to sway the results of an election."

But the state says it is simply being cautious.

"(The treasurer) is just being prudent to not create problems as the landscapes may change," Richardson said.