How Washington down payment assistance works: a guide to WSHFC programs
If you've been told you need 20% down to buy a home in the Seattle area, that isn't true for many buyers. Washington has some of the most useful down payment programs in the country, and a lot of buyers don't hear about them until they're already working with a lender. Here's how they work, in plain language.
What is the WSHFC?
The Washington State Housing Finance Commission (WSHFC) is a state agency that offers home loan programs and down payment assistance (DPA) to eligible buyers across Washington. Its consumer information is at HereToHome.org.
The main programs
- Home Advantage: a WSHFC first mortgage that can be paired with down payment assistance. It's the program most Washington buyers hear about first.
- House Key Opportunity: a WSHFC first mortgage with down payment assistance options, aimed at buyers with lower incomes.
- Covenant Homeownership Program: down payment assistance of up to $150,000 at 0% interest for eligible buyers, with possible forgiveness after five years for those who qualify. Details are at HereToHome.org/covenant.
Amounts, income limits, and rules differ by program and change over time, so confirm current terms before making plans.
How down payment assistance works
WSHFC assistance is generally a second mortgage that sits behind your main loan, not a grant. It can help with your down payment and closing costs. Interest terms vary by program, and in many cases there's no monthly payment. You typically repay it when you sell, refinance, or stop living in the home, unless a forgiveness feature applies to you.
Who may qualify
- Household income within the limit for your county and program
- A purchase price within the program limit
- Credit and qualification requirements that match the first mortgage
- A completed homebuyer education course
- A home you will live in as your primary residence
- A lender trained and approved to offer WSHFC loans
How to get started
- Talk to a lender who offers WSHFC programs before you start house hunting.
- Review your whole financial picture: income, savings, debts, and goals.
- Take the required homebuyer education course.
- Get pre-approved with the program in mind, so you know your price range.
- Shop for homes within the program's limits.
Mistakes I see
- Assuming you earn too much without checking the current limits for your county.
- Falling in love with a home before confirming it fits the price cap.
- Working with a lender who isn't set up for WSHFC loans.
- Not planning for repayment when you sell or refinance later.
Is it the right choice for you?
Assistance can let you keep more cash for reserves, moving costs, and repairs. It's also a second loan you will repay one day, and it can affect your options if you refinance. The right answer depends on your full financial picture, which is why I look at the whole thing before recommending a program.
Frequently asked questions
Is Washington down payment assistance a grant?
Most WSHFC down payment assistance is a deferred second mortgage, not a grant. It usually has no monthly payment and is repaid when you sell, refinance, or stop living in the home. Terms vary by program, and some programs offer forgiveness for eligible buyers.
Do I have to be a first-time buyer?
It depends on the program. Some WSHFC programs are open to repeat buyers, and others have first-time buyer rules or exceptions for certain areas and veterans. Ask your lender to check the program you're considering.
Can I use any lender?
No. WSHFC programs go through lenders trained and approved to offer them, so confirm your lender is set up for WSHFC loans before you start.
Do I need to take a class?
Yes. WSHFC programs require a homebuyer education course, and it's worth taking early since it can take time to complete.
Are there income and price limits?
Yes. Limits vary by county, program, and household size, and they change over time. Check current limits with your lender or at HereToHome.org before you start shopping.
Want to see if you may qualify? Call me at (206) 910-5500 or email Cameron.Murray@movement.com. You can also read more answers on the FAQ page.