First-Time Home Buyer Programs in Oregon 2026

Oregon Housing and Community Services (OHCS) runs the state’s first-time buyer loans through Flex Lending. FirstHome is for buyers with no principal residence in the past three years. NextStep drops that rule. Either can add a second lien of 4% of the loan, or 5% under Focused Demographics. It is forgivable at or below 80% of area median income and repayable above that.

The old names are gone. The OHCS page that used to describe the Oregon Bond Residential Loan now describes Flex Lending, which “offers two loan products to approved lenders statewide: FirstHome and NextStep.” Both are fixed-rate first mortgages, and every FirstHome government loan is a 30-year fixed. The FirstHome and NextStep product summaries were last updated August 15, 2026.

How OHCS decides you are a first-time buyer

The FirstHome government product summary defines a first-time buyer as someone “who has not owned or occupied a principal residence in the past three years preceding the closing date of the mortgage.” Your lender proves it with three years of signed federal tax returns, or IRS transcripts. Owning bare land or a manufactured home classified as personal property doesn’t count as ownership.

The summary lists two exceptions:

• Targeted areas. These are federally designated areas of slow economic growth. Some counties are entirely targeted: Baker, Clatsop, Harney, Lake, Union, Wallowa and Wheeler. Others have only specific tracts or towns, such as five census tracts in Multnomah County, Ashland in Jackson County, and Silverton and Turner in Marion County. Look up the census tract with the FFIEC tool, then check it against OHCS’s county list.
• Veterans, once. A qualified veteran buying outside a targeted area can use a one-time exemption if they have never had a mortgage revenue bond loan or a mortgage credit certificate. The veteran signs form SFMP7-VA and shows a DD-214 or certificate of eligibility.

One condition trips up many repeat buyers who move to NextStep: under both products, borrowers “may not own any residential property at the time of closing.” You have to sell the old house first, or at the same closing.

Oregon’s FirstHome income and price limits by county

OHCS publishes its limits as county tables. They were updated between June and August 2026 on the FirstHome lenders page. Take Multnomah County: the non-targeted ceiling is $131,588 for one or two people and $151,326 for three or more, rising to $153,960 and $179,620 in its targeted tracts. The Multnomah price cap is $733,987 outside targeted tracts and $897,096 inside them. Many rural counties share a $566,354 non-targeted cap. Income counts everyone 18 and older who will live in the home, related or not, projected over the 12 months after closing. A married borrower whose spouse lives elsewhere needs divorce or legal-separation papers, or the spouse’s income is counted too.

The second lien: 4% or 5%, and whether you repay it

The assistance is figured on the total loan amount, including any upfront mortgage insurance or funding fee. It “may be used for up to 100% of the borrower’s cash requirement to close.” Your income tier decides the terms. OHCS’s DPA table, for FHA, VA and USDA-RD loans:

• At or below 80% of county AMI: 4% as a 30-year forgivable second, or 5% as a 15-year forgivable second, with no interest. Forgiveness comes at the end of the term. There’s “no forgiveness for partial months,” and the balance comes due if you sell, refinance, transfer, rent out the home or stop living in it.
• Above 80% up to 120%: 4% repayable over 20 years, or 5% repayable over 30 years.
• Above 120%: 4% repayable over 10 years.

The repayable second carries a rate “1% above the interest rate of the first mortgage” and is paid monthly. Tier cutoffs by county are on OHCS’s AMI page. In Multnomah County, Tier 1 tops out at $102,640, and in Lane County at $77,520.

To get the 5% Focused Demographics option, you have to meet two of these four: a household of four or more, a household member with a disability, a front-end ratio of 28% or higher, or a sole head of household with an eligible dependent. For the down payment programs OHCS funds through local organizations, see our Oregon down payment assistance guide.

OHCS money that runs through local organizations

Separately from Flex Lending, OHCS awards down payment funds on a competitive basis to organizations around the state. Buyers must be first-time and/or first-generation at or below 100% of AMI, and they must take first-time homebuyer education and meet a certified housing counselor. The OHCS page caps assistance at “$60,000 or 20% of the purchase price, whichever is less, depending on the specific program and eligibility requirements.” It says that “in some instances” the money is a grant or a forgivable second lien. A quarter of the funds are reserved for Oregon veterans. Each organization sets its own terms, and OHCS says Flex Lending DPA “may be combined with other DPA programs.”

What an OHCS Flex lender will check

• Credit: 620 minimum with an automated approval on FHA, USDA and VA, and up to 50% debt-to-income (VA can reach 55% with two months of reserves). Manually underwritten files need 640. Borrowers with no credit score can qualify through a manual file.
• Education: required for every first-time buyer, through an OHCS homeownership center such as Arrive Homeownership (formerly Portland Housing Center). The certificate is good for up to one year. If you can’t get a class locally, the Finally Home! or NeighborWorks Framework online courses are accepted.
• Property: one-unit homes, condos, townhomes, PUDs, community land trust homes and real-property manufactured homes are allowed under both products. Two- to four-unit buildings, co-ops and personal-property manufactured homes are not. A home with an ADU is excluded under FirstHome; NextStep allows it as long as the ADU is not rented out.
• Occupancy: under FirstHome, you must move in within 60 days of closing, and no more than 15% of the property’s total area can be used for a business. Under either product, renting out the home or any part of it makes the second lien due.
• Title: the home can’t be vested in a trust or an LLC. No non-occupying co-borrowers or co-signers are allowed on FirstHome.
• Recapture: FirstHome’s product summary says “Recapture tax does apply,” and it points borrowers to a tax professional.

Applying for Flex Lending in Oregon

Start with an OHCS-approved lender. Approved lenders are licensed and based in Oregon or within 50 miles of it, and the lender list on the Flex Lending page can be searched by county. The lender locks the rate, funds the second lien at closing on OHCS’s behalf, and sells both loans to Idaho Housing and Finance Association, which services them. OHCS also encourages you to connect with a homeownership center before you shop.

• Closing costs in Oregon
• Lenders active in Oregon
• Affordability calculator · Payment calculator · Pre-approval
• FHA requirements · VA loan guide
• Oregon hub · neighbors: Washington, Idaho, California

Oregon Flex Lending questions

I still own a condo in Salem. Can I use NextStep for my next home?

Not while you own it. NextStep drops the first-time rule, but borrowers may not own residential property at closing.

Is Oregon’s 4% down payment help forgiven?

Only in the lowest income tier. At or below 80% of county AMI, the second lien is forgiven at the end of its term. Above that, you repay it monthly.

I’m buying in Baker City. Do I have to be a first-time buyer?

No. All of Baker County is a targeted area, so FirstHome waives the three-year rule there.

Can I use the old Cash Advantage program?

No. The OHCS page that used to carry the Oregon Bond loan now describes only Flex Lending’s FirstHome and NextStep, with the assistance as a second lien.

Do I need a homebuyer class if I’ve owned before?

Only if you haven’t owned a principal residence in the past three years. OHCS requires the class for any borrower who has not owned a primary residence within the past three years, so someone who sold their last home four years ago still needs it. The local organizations OHCS funds require education for their own programs.