Why This Program Matters Right Now
Washington homebuyers continue to face affordability challenges as home prices and upfront purchase costs make entering the housing market more difficult. The Washington State Housing Finance Commission Covenant Homeownership Program provides significant down payment assistance designed to help eligible buyers overcome one of the largest barriers to homeownership: upfront cash requirements.
This program stands out because it provides up to $150,000 in assistance through a forgivable loan structure. It was created to address historical housing barriers and expand access to homeownership for eligible Washington residents.
What the Washington State Housing Finance Commission Covenant Homeownership Program Provides
The Washington State Housing Finance Commission Covenant Homeownership Program provides down payment assistance of up to 20% of the home purchase price, with a maximum benefit of $150,000, plus closing costs.
The program is offered through the Washington State Housing Finance Commission (WSHFC) and is structured as a forgivable loan. Eligible buyers can use the assistance to reduce the amount of personal funds needed to purchase a home.
The assistance carries a 0% interest rate and does not require repayment if the borrower meets the program’s forgiveness requirements.
Covenant Homeownership Program Structure
The Washington State Housing Finance Commission Covenant Homeownership Program uses a forgivable loan structure to provide upfront purchase assistance.
- Assistance type: Forgivable loan
- Maximum assistance: Up to $150,000
- Assistance calculation: Up to 20% of the home purchase price, plus closing costs
- Interest rate: 0%
- Repayment required: No, if forgiveness requirements are met
The program’s loan forgiveness requirements include:
- Borrower earned no more than the loan forgiveness income threshold at the time of purchase.
- Borrower continues to own the home five years after purchase.
- Borrower remains current on first mortgage payments.
- Borrower meets other program criteria five years after purchase.
Key Numbers
- Maximum assistance: $150,000
- Assistance amount: Up to 20% of purchase price
- Interest rate: 0%
- Minimum assistance: 20% of purchase price
- Closing cost assistance: Included
- Repayment requirement: No, if forgiveness requirements are satisfied
- Maximum household income: See program requirements for current details
- Credit score requirement: Not publicly disclosed
- Down payment requirement: $0 down payment available
Eligibility Requirements
- Must meet Washington State Housing Finance Commission Covenant Homeownership Program requirements.
- Must meet applicable income limits.
- Must qualify for an approved first mortgage.
- Must complete required homebuyer education.
- Must work with a Commission-trained lender.
Eligibility is focused on applicants connected to Washington’s historical housing discrimination requirements. The program includes requirements related to the applicant’s or qualifying family member’s Washington state residency history before April 1968.
Past ownership exceptions may apply, including:
- Applicants who have not owned a home within the past three years.
- Single parents who only owned a home while married to a former spouse.
- Displaced homemakers who only owned a home with a spouse.
- Applicants who previously owned a residence without a permanent foundation.
- Applicants who owned a property determined to be uninhabitable.
Property Requirements
- Property location: Washington
- County: All counties
- Primary residence required: Yes
- Must be owner-occupied.
- Eligible property type: Not publicly disclosed
Additional property requirements may apply through the approved first mortgage program.
How the Process Works
- Contact a Commission-trained lender to determine eligibility and discuss mortgage options.
- Complete required homebuyer education.
- Apply for an eligible first mortgage and establish program eligibility.
- Receive approval for the Covenant Homeownership Program assistance.
- Use the assistance toward down payment and closing costs when purchasing an eligible home.
- Maintain ownership and meet program requirements during the forgiveness period.
Washington State Housing Finance Commission Covenant Homeownership Program Affordability Impact
The Washington State Housing Finance Commission Covenant Homeownership Program significantly reduces the upfront cash required to purchase a home by providing up to $150,000 in down payment assistance and closing cost support.
This program does not reduce the monthly payment. It reduces upfront cash required.
The forgivable loan structure allows eligible buyers to access substantial purchase assistance without repayment if they meet the required conditions.
Where This Fits in the Market
The Washington State Housing Finance Commission Covenant Homeownership Program differs from many traditional down payment assistance programs because of its large assistance amount and forgivable loan structure. While many assistance programs provide smaller deferred loans or grants, this program offers up to 20% of the purchase price, up to $150,000, plus closing costs.
The program is specifically designed to address long-standing homeownership access challenges in Washington. By combining financial assistance, homebuyer education, and lender support, it creates a structured path for eligible buyers who may otherwise face significant barriers to purchasing a home.
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