First-Time Homebuyer Programs in Washington

The down payment on a new home is often the biggest hurdle for first-time homebuyers. In Washington, where the average home value is $591,095, a down payment of $118,219 is needed to avoid private mortgage insurance.

Fortunately, first-time homebuyer programs in Washington can help you achieve homeownership. There are also mortgages that allow first-time buyers to put less down, though these often come with income requirements and require mortgage insurance. MoneyGeek explores several state-specific and government-backed first-time homebuyer programs for people from different financial backgrounds.

Washington offers grants and loans to assist first-time homebuyers in covering both down payment and closing costs. Below, we have compiled the first-time homebuyer programs offered by the Washington State Housing Finance Commission (WSHFC) to help you find the best option for your particular needs and situation.

The Home Advantage Program from WSHFC offers a 30-year fixed-rate mortgage with down payment assistance for first-time and repeat homebuyers. Borrowers can access up to 4% of the loan amount in down payment assistance as a second mortgage. Assistance is repayable only upon sale, refinance or change in residency. The program supports FHA, VA, USDA and conventional loans, with income limits statewide.

The House Key Opportunity Program offers first-time homebuyers a 30-year fixed-rate mortgage with income-based interest rates funded by tax-exempt bonds. This program includes down payment assistance through second mortgage options, making homeownership more accessible for eligible buyers. FHA, VA, USDA and conventional loan options are available, and participants must meet income and purchase price limits.

The Home Advantage Down Payment Assistance Program offers eligible borrowers a second mortgage loan with 0% interest and deferred payments for 30 years. Borrowers can receive assistance up to 5% of the total loan amount, depending on the type of first mortgage, such as FHA or conventional. This assistance is paired exclusively with the Home Advantage first mortgage. This program can be a beneficial option for homebuyers in Washington looking to ease the financial burden of a down payment.

The Home Advantage DPA Needs Based Option offers eligible homebuyers a second mortgage of up to $10,000 at a 1% interest rate, deferred for 30 years. Designed to assist lower-income households, the loan works exclusively with the Home Advantage first mortgage. Veterans are exempt from the needs assessment and qualify directly.

The HomeChoice Downpayment Assistance Loan Program offers up to $15,000 in down payment aid to low- to moderate-income households that include individuals with disabilities or family members with disabilities. This loan features a 1% interest rate, with payment deferred until the home is sold, refinanced or the mortgage reaches 30 years. To qualify, borrowers must combine this program with House Key or Home Advantage loans and complete personalized one-on-one counseling.

Aside from statewide first-time homebuyer programs in Washington, there are also city-specific programs available to help you pursue homeownership in a city of your choosing. Check out the table below for some of the cities in Washington that provide first-time homebuyer programs for potential residents.

Zero-down-payment loan programs are available in Washington, allowing you to purchase a home without an initial payment. USDA and VA loans are two government-backed options that offer this benefit.

USDA loans are designed to help low- to moderate-income homebuyers in rural areas. They are issued by the U.S. Department of Agriculture through its Rural Development Guaranteed Housing Loan program.

USDA loans offer several benefits, including low interest rates and zero down payments. They are intended to make homeownership more accessible for those who might not qualify for conventional financing. The program also provides flexible credit guidelines to help more families achieve homeownership.

To be eligible for USDA loans, certain criteria must be met. The property must be 2,000 square feet or below and located in a USDA-eligible rural area with a population of less than 35,000. Additionally, there are income limits based on location. For example, in Ferry County, Washington, the limit is $72,000, while in San Juan County, Washington, it is $81,200 for a four-person low-income household.

VA loans qre a type of mortgage issued by the U.S. Department of Veterans Affairs and are designed to help veterans, active-duty service members and eligible surviving spouses become homeowners.

VA loans offer several advantages, including the absence of a down payment requirement. They also do not require private mortgage insurance (PMI), which can save borrowers a significant amount of money over the life of the loan. Additionally, VA loans come with lower interest rates compared to private loans. As of November 2024, the APR for a 15-year fixed-rate VA loan in Washington is 6.25%, while a 30-year fixed-rate VA loan stands at 6.29%.

To be eligible for a VA loan, you must meet specific requirements related to your length of service or service commitment, duty status and character of service. You must also meet certain income limits depending on where you live and provide a valid certificate of eligibility (COE).

First-time homebuyers in Washington can take advantage of low-down-payment loan programs that allow them to finance their home with a down payment of 3.5% or less. These programs include conventional, FHA and FHA 203(k) loans.

FHA loans and conventional loans are the two most common types of mortgages. FHA loans require a minimum down payment of 3.5%, making them accessible for buyers with limited savings. Conventional loans can require as low as a 3% down payment for first-time homebuyers but generally have stricter credit score and debt-to-income ratio requirements than FHA loans.

Interest rates are another important factor to consider. As of November 2024, the current APR for a 15-year fixed-rate conforming loan in Washington is 6.08%. In comparison, a 15-year fixed-rate FHA loan in the same state has an APR of 8.47%. APRs on FHA loans can be higher because there tend to be more fees and extra costs associated with borrowing money on government-backed loans.

Use our FHA vs. conventional loan calculator to help you compare FHA and conventional mortgage programs and find the best option for you.

We have answered frequently asked questions about first-time homebuyer programs in Washington to help you identify the best option for your needs and move closer to achieving homeownership.

Explore additional MoneyGeek resources for first-time homebuyers in Washington to help you with the homebuying process.