Keeping in mind that everyone’s situation is different and qualifications vary from buyer to buyer but if my understanding of the First Time Buyer Credit and FHA financing is correct, the government will pay qualified buyers to buy a qualified property. A qualified buyer in this case is FHA approved, is considered a first time buyer by the IRS and meets their income requirements. A qualified property meets the requirements for FHA financing (more on that below). As always, verify your situation with an accountant and mortgage professional.
Assuming the purchase of a $200,000 property that qualifies for FHA financing with 3.5% down: The qualified buyer puts down $7000 (plus closing costs, inspections etc). IRS Form 5405 indicates that the property qualifies for the $8000 credit as it is the lesser amount of either that or 10% of the purchase price (note that Form 5405 also defines purchase price). The simplified version indicates that the buyer is going to pocket $1000 after filing their taxes. Realistically, closing costs and other fees will probably eat that up. The buyer would net even more on a $100,000 purchase: $3500 down (plus costs) and the $8000 tax credit but Portland has a very limited number of properties at that price (though we did recently sell an FHA approved condo for $89,000.
The general rule is that FHA financing for a condo requires the condo to be on the list to qualify. There are exceptions but they are few and far between but do exist. The list of approved condos on the HUD website can be a little frustrating as it only returns results that 100% match your search. The database is incomplete. About 50% of the properties are listed without their zip code. If you enter condos a certain zip code and the property in question was listed without a zip code, it won’t appear in your search. If you search a condo name and your search does not match the way the name was inputted into the database, it will not return the property as a result. You are more likely to find a subject property by searching just the city (127 results for Portland, OR) or the whole state (353 results).
As always: do your research, ask the appropriate questions and determine if now is the right time to buy for you. This is not tax or legal advice.