Oregon Housing and Community Services revamps Flex Lending program to expand affordable homeownership opportunities

Oregon Housing and Community Services (OHCS) recently completed a $163 million bond sale to finance first-time homebuyer loans through its Flex Lending program, which now offers two new loan products: FirstHome and NextStep.

“FirstHome and NextStep continue OHCS’ mission of increasing access to stable housing by establishing more pathways to homeownership for traditionally underserved Oregonians, especially first-time homebuyers and veterans on low incomes,” said Keeble Giscombe, director of Homeownership at OHCS. “OHCS is constantly exploring innovative ways to get more people into homes throughout the state, whether it’s by changing how we fund development projects or improving existing programs like Flex Lending to make it easier for people to get a home.”

The FirstHome loan product incorporates elements of the traditional Oregon Bond Residential Loan program, which is being phased out, offering first-time homebuyers, veterans, and previous homeowners (if purchasing in Targeted Areas, which are defined by the U.S. Census) a mortgage loan with a below-market interest rate. This loan is designed to increase purchasing power and keep monthly payments affordable.

Homebuyers may also receive a down payment assistance (DPA) loan of 4% or 5%, which can cover up to 100% of the borrower’s cash requirements at closing. This assistance may be used for down payment, closing costs, prepaid items, upfront borrower-paid mortgage insurance, and other allowable fees.

The NextStep loan product is similar to FirstHome, but without a first-time homebuyer requirement and with more flexible qualification requirements. Income is capped at $125,000.

Homebuyers interested in either Flex Lending product need to work with an OHCS-approved lender. First-time homebuyers are required to take a homebuyer education class through a certified housing counselor at one of the homeownership centers throughout the state.

More information and a list of participating lenders can be found at https://www.oregon.gov/ohcs/homeownership/homebuyers/Pages/flex-lending.aspx. Lenders who wish to participate in the program can visit https://www.oregon.gov/ohcs/homeownership/lenders-real-estate-professionals/Pages/default.aspx.