Thoughts on two financing options for first time home buyer?

[Sven D.]

Hello,

Oregon offers two financing options for first time home buyers found here. I'll briefly outline them below.

1. Up to 3% down payment assistance that requires no repayment and a rate of 3.375%

2. No down payment assistance but a rate of 2.875%.

If I understood the brochure correctly neither one have a pre-payment penalty and both can be amortized over 15 or 30 years. My target home purchase price is around 200k, which, admittedly, is extremely difficult in the Portland metro area on a home that doesn't require cash or rehab. At this price point my 3% assistance would be $6,000 effectively making my loan $194,000, however, I'm not sure at what point the lowered monthly payments from option two are better than the up front cash. Anyone have thoughts on this?