Oregon’s median home price approached $500,000 in 2025 — and in Portland, it has regularly exceeded that threshold. For buyers who can qualify for a mortgage payment but can’t easily accumulate a down payment in a high-cost rental market, Down Payment Assistance can be the difference between homeownership and indefinitely waiting.
Oregon Housing and Community Services (OHCS) operates one of the most innovative DPA ecosystems in the West, combining low-rate first mortgages with down payment assistance that can cover 100% of a buyer’s cash requirement at closing. The Bookspan Baker Team at Keepsake Loans is an approved OHCS Flex Lending partner — and was directly highlighted by OHCS for helping a Portland first-time buyer achieve homeownership through the Flex Lending program in 2025.
The OHCS Flex Lending program is Oregon’s primary statewide Down Payment Assistance initiative, pairing a competitive fixed-rate first mortgage with a DPA second mortgage that can cover the buyer’s entire cash requirement at closing — including down payment, closing costs, prepaid items, upfront mortgage insurance, and other related loan expenses.
First-time homebuyers with low to moderate incomes
4% or 5% of the first mortgage loan amount
Second mortgage
For buyers at or below 80% of Area Median Income (AMI), the DPA loan is forgivable — no payments and no interest. For moderate-income buyers, it is repaid as an amortizing second at the first mortgage rate + 1%
Can fund 100% of cash required to close
FHA, VA, USDA, and Conventional
620
Required
Any buyer — including those who have previously owned a home — with income at or below $125,000
4% or 5% of the first mortgage loan amount
Second mortgage (same forgiveness structure as FirstHome)
Can fund 100% of cash required to close
620
The NextStep program is particularly significant because it eliminates the first-time homebuyer requirement. Previous homeowners who have sold and are re-entering the market can access the same 4–5% DPA as first-time buyers, as long as their income is within the $125,000 cap.
OHCS Flex Lending at Scale: The Flex Lending program helped 954 Oregon households purchase homes in 2025, delivering nearly $300 million in financing including $7.5 million in down payment assistance. Thirty-one percent of buyers identified as people of color, 32 were veteran households, and 43% lived in rural areas.
In addition to Flex Lending, OHCS funds a network of local organizations throughout Oregon to distribute direct DPA grants.
Up to $60,000 or 20% of the purchase price, whichever is less
Can be a grant, forgivable second lien, or deferred second lien depending on the organization
25% of OHCS DPA grant funds are reserved for Oregon veterans and their families
At or below 100% of Area Median Income
First-time and first-generation homebuyers in many programs; veteran eligibility may be broader
The average grant amount through OHCS-funded organizations in 2024 was approximately $28,315, with an average home purchase price of $339,689.
OHCS also administers the Oregon Bond Residential Loan Program, providing below-market rate first mortgages through two options:
Rate Advantage: An even lower than normal below-market mortgage rate — no cash assistance, but a lower ongoing payment.
Cash Advantage: A below-market rate mortgage plus 3% of the loan amount in cash toward closing costs.
Both options are available for FHA, VA, USDA, and conventional loans through participating lenders.
For buyers purchasing within the City of Portland, the Portland Housing Bureau offers a separate local DPA program:
Maximum Amount: Up to $80,000 citywide; up to $100,000 in targeted priority areas
Structure: 30-year second mortgage at 0% interest with no monthly payments
Repayment: Due in full if you sell, move out, refinance, or transfer within the first 15 years
Income Limit: At or below 100% of Portland’s Area Median Income, adjusted for family size
Eligibility: First-time homebuyers
Homebuyer Education: Required
The Portland DPA loan is one of the most generous single-market DPA programs in the Pacific Northwest.
Oregon offers a tax-advantaged savings account specifically for future homebuyers — a unique tool not widely available in other states.
Tax Benefit: Deposits and interest earnings in a designated account can be deducted from Oregon taxable income, up to $6,125 per year
Duration: Deductions available for up to 10 years
Eligible Uses: Down payment, closing costs, real estate agent commissions, home appraisal fees
Enrollment Deadline: Must open the account by December 31, 2026
FHA + Flex Lending FirstHome or NextStep: The most common Oregon first-time buyer combination. FHA’s 3.5% down can be covered entirely by 4–5% Flex Lending DPA on most purchases.
Conventional + Flex Lending: For buyers with 620+ credit, pairing a conventional loan with Flex Lending allows PMI removal as equity builds.
VA + Flex Lending: VA already requires zero down. For eligible first-time veteran buyers, Flex Lending covers closing costs — potentially resulting in zero cash at closing.
USDA + Flex Lending: USDA loans require no down payment in eligible rural areas. Flex Lending covers closing costs for USDA buyers in qualifying Oregon counties, many of which qualify given Oregon’s large rural land area.
Flex Lending is Oregon’s primary statewide DPA program, providing 4–5% of the loan amount as a second mortgage to cover a buyer’s full cash requirement at closing. FirstHome is for first-time buyers; NextStep is for any buyer with income ≤$125,000, no first-time requirement. Minimum 620 credit score. For buyers at or below 80% AMI, the DPA is forgivable.
For Flex Lending FirstHome — yes. For Flex Lending NextStep — no. NextStep is open to any income-eligible buyer with income at or below $125,000, regardless of prior homeownership.
Through OHCS Flex Lending: 4–5% of the loan amount. Through OHCS-funded grant organizations: up to $60,000 or 20% of purchase price. Through the Portland local program: up to $80,000 (or $100,000 in targeted areas). Programs can sometimes be combined.
Yes. OHCS reserves 25% of its DPA grant funds specifically for Oregon veterans and their families. Veterans may also qualify for ODVA home loan programs separate from federal VA benefits.
A tax-advantaged savings account unique to Oregon that allows buyers to deduct deposits and interest up to $6,125 per year from Oregon taxable income, for up to 10 years, when saving toward a home purchase. Must be opened by December 31, 2026.
