Washington first-time homebuyer programs

Washington State Housing Finance Commission programs

The Washington State Housing Finance Commission (WSHFC) offers two first-time homebuyer programs that provide down payment assistance, discounted rates and incentives for purchasing or upgrading to eco-friendly homes.

Most state and federal programs define a first-time buyer as someone who hasn’t owned a home in the past three years. But if you’re buying in a federally designated target area — a neighborhood with lower incomes or homeownership rates — you might still qualify for first-time buyer programs, even if you’ve owned a home more recently.

To be considered a first-time homebuyer, you must not have owned a home in the past three years.

Home Advantage program

The Home Advantage program offers lower interest rates and down payment assistance to qualified first-time homebuyers and repeat buyers.

To qualify for a Home Advantage loan, you’ll need to:

• Make less than $180,000 per year
• Be a U.S. citizen or permanent resident
• Meet with a WSHFC-approved lender to determine if you qualify for a conventional, Federal Housing Administration (FHA), VA or U.S. Department of Agriculture (USDA) loan
• Complete a WSHFC-sponsored homebuyer education seminar within the last two years
• Purchase a one- to four-unit home, townhome or manufactured home

You’ll need to work with a WSHFC-trained lender to apply. An approved lender can help you choose the right loan type and determine if you qualify for down payment assistance.

You can also pair your loan with the EnergySpark program, which offers a one-quarter percent interest rate discount if you buy an energy-efficient home or make qualifying energy-saving upgrades after purchase.

Home Advantage recipients receive a one-quarter percent interest rate discount when buying an energy-efficient home or making upgrades at the time of purchase.

» MORE: First-time homebuyer loans and programs

Home Advantage down payment assistance

When you qualify for Home Advantage mortgages, you can get up to 5% in down payment assistance. The assistance is a second loan with a 0% interest rate, only repayable when you sell the home, refinance or move out of the home.

Needs-based assistance is available for Home Advantage borrowers earning up to $147,400 in King and Snohomish counties ($115,900 in all other counties). This program offers up to $10,000 in down payment assistance at 1% simple interest.

House Key Opportunity program

The House Key Opportunity program is designed for lower-income buyers who need help with upfront costs and want more affordable monthly payments. It offers fixed interest rates, with discounted rates available for borrowers who meet certain income limits or use specific loan types. Most borrowers must also pair this loan with an approved down payment assistance program.

To qualify for a House Key Opportunity loan, you’ll need to:

• Meet your county’s income limit (typically between $100,000 and $175,000)
• Be a first-time homebuyer or buy in a federally designated target area
• Buy a home within your county’s price cap (usually between $345,000 and $750,000)
• Purchase a one- to four-unit home, townhome or manufactured home
• Use a WSHFC-approved down payment assistance program or purchase a newly built home
• Complete a WSHFC-sponsored homebuyer education seminar within the past two years
• Apply through a WSHFC-approved lender to qualify for a conventional, FHA, VA or USDA loan
• Be a U.S. citizen or permanent resident

FHA, VA and USDA loans through House Key Opportunity typically offer the lowest interest rates, while conventional loans require you to earn less than 80% of the area median income (AMI) to qualify for a rate discount.

House Key Opportunity down payment assistance

The House Key Opportunity program must be paired with a down payment assistance program approved by the WSHFC.

When you qualify for a House Key Opportunity mortgage, you can get up to $15,000 in down payment assistance (called the Opportunity loan). The aid comes as a second loan with a 1% simple interest rate, meaning interest doesn’t compound over time. You’ll repay the loan when you sell the home, refinance or move out. Funds may be put toward the down payment and closing costs.

» MORE: Best mortgage lenders for first-time buyers

Down payment assistance options

In addition to the assistance offered through Home Advantage and House Key Opportunity, there are other down payment assistance programs in Washington, each with its own eligibility rules, loan terms and funding limits.

HomeChoice

The HomeChoice down payment assistance program is for homebuyers with a disability or those who have a disabled family member living with them. It offers up to $15,000 in assistance and can be paired with either the Home Advantage or House Key Opportunity mortgage programs.

The income limit is $147,400 in King and Snohomish counties and $115,900 in all other counties.

This second loan has no interest and no monthly payments. You repay it only when you move, refinance or sell the home.

ARCH

This program is for buyers purchasing a home in the ARCH (A Regional Coalition for Housing) area of East King County. It can be combined with a Home Advantage or House Key Opportunity first mortgage.

The ARCH area includes:

• Beaux Arts Village
• Bellevue
• Bothell
• Clyde Hill
• Hunts Point
• Issaquah
• Kenmore
• Kirkland
• Medina
• Mercer Island
• Newcastle
• Redmond
• Sammamish
• Woodinville
• Yarrow Point

Qualified buyers can receive up to $30,000 in down payment assistance as a second mortgage loan with a 4% simple interest rate. No monthly payments are required, but the loan becomes fully repayable if you sell, refinance or move out.

To qualify, your household income must fall between $84,850 for a one-person household and $157,100 for an eight-person household. You’ll also need to contribute 2% of the home purchase price at closing — either your own funds or a gift.

ARCH East King County income limits by household size

ARCH purchase price limits

To qualify, the home must also fall under these purchase price limits:

• New construction: $660,000
• Existing home: $646,000

Veterans

If you’re a veteran living in Washington state, you can get up to $10,000 in down payment assistance in the form of a 3% simple interest loan.

To qualify, you must be one of the following:

• A veteran with an honorable discharge or a medical discharge with an honorable record
• A current or former member of the Washington National Guard or Reserve with an honorable discharge
• An unremarried spouse of a deceased veteran or their dependent child

Income limits for King and Snohomish counties are capped at $157,100. The limit for all other counties is $122,100.

As with other loan assistance programs, the loan becomes fully repayable should you refinance, sell or move out of your home. This program can be combined with the Home Advantage or House Key Opportunity first-mortgage loan programs.

Community second loans

Some cities and nonprofit organizations offer down payment assistance in the form of second mortgages, called community second loans. These can be combined with WSHFC mortgage loans if the second lender is on the WSHFC-approved list.

Washington state’s Here to Home offers a complete list of community second programs on its website.

Educational requirements for homebuyer programs

All first-time homebuyer and down payment assistance programs through Washington state require you to complete a free community-sponsored homebuyer education seminar within two years of using the program.

These seminars can be in-person or online and are usually a few hours long. Classes are designed to help first-time homebuyers learn about the homebuying process. Topics typically include:

• How to buy a home, step-by-step
• How home loans work
• What fees to watch for
• How much to put down
• Closing costs in Washington

You can find a full schedule of approved classes on the WSHFC website.

Additional resources for first-time homebuyers

Washington provides some additional local and community resources that help first-time homebuyers with down payment costs and mortgage options.

BECU grant for Washington homebuyers

Boeing Employees Credit Union (BECU) is a large local credit union that offers up to $8,000 in grant assistance to qualifying first-time homebuyers in Washington and a handful of other states.

The BECU First-Time Homebuyer Grant isn’t a loan and doesn’t need to be repaid as long as you live in the home for at least three years.

To qualify, you need to:

• Be or become a BECU member
• Purchase a one-unit home, townhouse or condo
• Take a qualifying homebuyer education course
• Earn less than the income limits, which vary by location

Common challenges and solutions for first-time homebuyers

First-time homebuyers are faced with quite a few challenges, especially as interest rates, insurance and taxes can make housing feel more unaffordable and out of reach. Here are a few things to be prepared for if you’re looking to buy your first home:

• Large upfront costs: Buying a home usually requires a down payment of at least 3% to 5% of the purchase price. With the median home cost rising to over $400,000 in the U.S., this means saving up at least $12,000 to $20,000. Combined with closing costs of another 3% to 6% of the home, you’re looking at needing $40,000 or more in some cases. Down payment assistance programs can help with these costs, lowering the amount you need saved to purchase your first home.
• Home maintenance costs: Many first-time homebuyers don’t calculate the true cost of owning a home. Home maintenance can cost thousands per year, but larger maintenance items, like a new roof, can cost tens of thousands. It’s important to build savings for home repairs and maintenance into your budget before you buy. A good rule of thumb is that you should save 1% of the home purchase price per year for maintenance.
• Understanding insurance and taxes: Your mortgage is only one piece of the puzzle when it comes to affording a home. You’ll also need to pay for homeowner’s insurance and property taxes either every six months or every month as part of your overall payment. Make sure to understand the details of how much you’ll pay for each before purchasing a home.
• Learning the homebuying process: The homebuying process is a large legal transaction that can be confusing. Navigating the process can be difficult, and it’s easy to make mistakes if you don’t understand how it works. Taking a free homebuyer education class can help clarify exactly how the homebuying process works and what to expect.

» MORE: First-time homebuyer benefits