OHCS First-Time Homebuyer Programs in Oregon: FirstHome and NextStep

Why OHCS First-Time Homebuyer Programs in Oregon Matter for Clackamas County Buyers

If you are looking to buy your first home in Oregon City, Happy Valley, Lake Oswego, or anywhere else in Clackamas County, the upfront costs can feel like a wall. Down payments, closing costs, and prepaid items all add up. That is where Oregon Housing and Community Services (OHCS) comes in. OHCS does not lend directly. It sets the rules for two fixed-rate first mortgages that approved lenders offer, and either one can come with a down payment assistance second mortgage.

In this guide, I will break down the two OHCS loans so you can figure out which one fits your situation. For a broader overview of all available assistance, visit our Oregon down payment assistance hub.

FirstHome: The OHCS First-Time Homebuyer Loan in Oregon

FirstHome is the OHCS loan for first-time buyers on low to moderate incomes. It is a 30-year fixed-rate first mortgage. Down payment assistance is optional with FirstHome.

• First-time buyer rule. No borrower can have owned or occupied a principal residence in the three years before closing. A qualified veteran can use a one-time exemption.
• Household income limit. OHCS counts the income of everyone 18 or older who will live in the home, not just the borrowers.
• Purchase price limit. The home must be at or under the county limit.
• Loan types. FHA, FHA Section 184, VA, USDA Rural Development, and conventional through Fannie Mae HFA Preferred or Freddie Mac HFA Advantage.
• No non-occupying co-borrowers or cosigners. Everyone on the loan has to live in the home.
• Recapture tax. FirstHome is subject to the federal recapture tax. OHCS tells borrowers to talk with a tax professional about it.
• No points or buydowns. Discount points and interest rate buydowns are not allowed on FirstHome.

NextStep: The OHCS Loan for Repeat and First-Time Buyers

NextStep is the OHCS loan for any homebuyer, including people who have owned a home before. It is always paired with down payment assistance.

• No first-time buyer rule. You may be a previous homeowner. First-time buyers in NextStep still take homebuyer education.
• Income cap. NextStep looks at the loan-qualifying income of the borrowers, not the whole household, and caps it at $125,000.
• Co-borrowers allowed. Non-occupying co-borrowers and cosigners are permitted. Their income counts toward the $125,000 cap.
• No other property. You cannot own any other residential property at closing.

Down Payment Assistance Through OHCS First-Time Homebuyer Programs in Oregon

The OHCS down payment assistance (DPA) is a second mortgage recorded behind your first mortgage. It is not a grant. Here is how it works under both loans:

• Amount. 4% of the total loan amount as standard DPA, or 5% under the Focused Demographics option. Total loan amount includes any upfront mortgage insurance or funding fee. On a $400,000 first mortgage, 4% is $16,000 and 5% is $20,000.
• Focused Demographics (5%). You need two of 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 at least one eligible dependent.
• What it pays. Up to 100% of your cash to close: down payment, closing costs, prepaid items and upfront borrower-paid mortgage insurance. You cannot take cash back beyond your earnest money and prepaids. Unused funds go to principal, capped at 1% of the loan.
• Forgivable or repayable. If your qualifying income is at or below 80% of area median income (AMI), the second mortgage is forgivable, with no payment and no interest. Above 80% AMI, it is repayable monthly at the first mortgage rate plus 1%, over 10, 20 or 30 years.
• When it comes due. The balance is due if you sell or transfer the home, refinance or pay off the first mortgage, rent the home out, or stop living there for more than 60 days.
• Stacking. OHCS DPA may be combined with other down payment assistance programs.

OHCS First-Time Homebuyer Programs in Oregon: Side-by-Side Comparison

Eligibility for OHCS First-Time Homebuyer Programs in Clackamas County

These are the Clackamas County figures from the OHCS tables as of October 2026.

Who Counts as a First-Time Buyer Under OHCS Rules

For FirstHome, you are a first-time buyer if you have not owned or occupied a principal residence in the three years before closing. That applies to every borrower on the loan. In some Oregon counties, homes in a targeted census tract skip this rule. OHCS lists no targeted areas in Clackamas County, so the rule applies here unless you use the one-time veteran exemption.

Income Limits in Clackamas County

FirstHome household income limits in Clackamas County are $131,588 for a one- or two-person household and $151,326 for three or more. NextStep caps borrowers' qualifying income at $125,000. A separate set of numbers sets your DPA terms: in Clackamas County, 80% of AMI is $102,640 and 120% is $153,960.

Purchase Price Limit in Clackamas County

The FirstHome purchase price limit in Clackamas County is $733,987. OHCS sets these limits under IRS Code Section 143.

Credit Score and Debt Requirements

OHCS lists a minimum credit score of 620. The loan must also meet the underwriting rules of the loan type you choose. If your credit needs work, visit our credit score guide for strategies to improve your score before applying.

Homebuyer Education: A Required Step for First-Time Buyers

OHCS requires homebuyer education for every first-time homebuyer, under FirstHome and NextStep alike. The course goes through an OHCS homeownership center.

• OHCS homeownership centers. Arrive Homeownership, formerly Portland Housing Center, is one accepted center.
• Finally Home! An online course OHCS accepts when you cannot set up a class through a local center.
• Framework by NeighborWorks. The other accepted online option.

Your certificate is good for up to one year. I recommend starting the course early in your home search so it does not become a last-minute scramble.

Step-by-Step: How to Apply for OHCS First-Time Homebuyer Programs in Oregon

Here is the process from start to finish. I handle the lender side and the OHCS paperwork.

1. Contact an approved lender. Only OHCS-approved lenders can offer Flex Lending. Fairway Independent Mortgage is on the OHCS approved-lender list for Clackamas County for both FirstHome and NextStep. Call (503) 765-1765 or book a consultation.
2. Get pre-qualified. I will review your income, credit, and debts to see whether FirstHome or NextStep fits, and which DPA tier your income lands in.
3. Complete homebuyer education. If you are a first-time buyer, take the course and keep the certificate.
4. Find your home. For FirstHome, stay at or under the $733,987 Clackamas County price limit.
5. Lock and submit. Once you have an accepted offer, I lock your rate and submit the file. OHCS requires a compliance review before closing, on top of normal underwriting.
6. Close on your home. The DPA is funded at closing along with your first mortgage. You sign your documents and receive your keys.

How These Programs Compare to Standard FHA, VA, and Conventional Loans

OHCS loans are not the only path to homeownership. For the full comparison of every loan type, including HomeReady and USDA, see my page on first-time home buyer loans in Clackamas County.

• Standard FHA loans. An FHA loan needs at least 3.5% down. An OHCS FHA loan with DPA can cover that down payment plus closing costs.
• VA loans. Veterans already get zero-down financing. OHCS DPA on a VA loan can go toward closing costs and prepaid items instead.
• Conventional 3% down loans. OHCS conventional loans go to 97% LTV with a combined limit of 105%, and borrowers under 80% AMI get reduced mortgage insurance.

The trade-off is the second mortgage. Above 80% AMI it has a monthly payment, and at any income it comes due if you sell or refinance. I compare both paths in dollars before you choose.

Frequently Asked Questions About OHCS First-Time Homebuyer Programs in Oregon