Covenant Down Payment Assistance

What is Covenant Down Payment Assistance?

Covenant Down Payment Assistance is a deferred second loan for homebuyers in Statewide, Washington.

• The Covenant Down Payment Assistance program is the nation's first state-funded reparative homeownership program, established by Washington's Covenant Homeownership Act (HB 1474, 2023) to remedy the harm of historic racially restrictive covenants. It provides up to 20% of the home purchase price (up to $150,000) as a 0% deferred second mortgage to qualifying first-time homebuyers who can document descent from a Washington resident harmed by racial covenants prior to April 11, 1968. Funded by a document-recording surcharge.
• Up to $150,000 in down payment assistance for eligible homebuyers descended from individuals harmed by Washington State's historic racially restrictive real estate covenants. Established under Washington's Covenant Homeownership Act (HB 1474, 2023), the program addresses historic race-based housing discrimination by funding down payments for Black/African American buyers (and other eligible groups identified through state research) whose ancestors lived in Washington before April 11, 1968 (the federal Fair Housing Act). Structured as a 0% interest, deferred-payment second mortgage with no monthly payments.
• due at sale, refinance, or transfer. Funded by a document-recording fee surcharge.
• Funding comes from Washington State document-recording fee surcharge established by Covenant Homeownership Act (HB 1474, 2023); administered by WSHFC.

Do you have to pay it back?

Covenant Down Payment Assistance is deferred, so no payments are due until the home is sold, refinanced, or the first mortgage is paid off.

• Repayment is triggered by Due upon sale, refinance, transfer of title, or when property is no longer borrower's primary residence.
• The assistance is recorded in 2nd Lien position.
• Forgiveness and repayment terms are set by the program and can change — confirm them on the official program page before applying.

Who qualifies?

Covenant Down Payment Assistance is open to first-time homebuyers and buyers who will live in the home as their primary residence.

What are the income limits?

Covenant Down Payment Assistance limits household income to $188,500.

• The limit applies to total household income, not only the borrower’s.
• Area median income figures are published by HUD and updated annually, so check the current table for the county before relying on a number.

What kind of home can it be used for?

Covenant Down Payment Assistance caps the purchase price as follows: Subject to Home Advantage program sales price limits by county; no separate Covenant cap.

• Eligible property types include Single-family detached, townhomes, condos (agency-approved), PUDs.
• New construction is eligible.
• Manufactured homes are eligible.

Is there eligibility for specific groups?

Covenant Down Payment Assistance names veterans, active-duty service members, reservists and National Guard members, surviving spouses, American Indian and Alaska Native buyers, educators, law enforcement officers, firefighters, healthcare workers, and buyers with disabilities among the groups it serves.

• Being named here means the program mentions the group, not that membership alone qualifies an applicant — the rest of the eligibility rules still apply.

Where does it apply?

Covenant Down Payment Assistance serves buyers purchasing in Statewide, Washington.

How do you apply?

Applications for Covenant Down Payment Assistance go through the administering agency, which publishes the current terms and the application steps on its own site.

1. 1

   Take a homebuyer education course

   Required by the program, through WSHFC-sponsored Commission-Sponsored Homebuyer Education Seminar (5-hour course).

2. 2

   Contact the administering agency to reserve funds

   Funds are reserved through Lender reserves via WSHFC's online lender portal alongside Home Advantage first mortgage reservation; eligibility prescreening required, and are subject to availability.

3. 3

   Work with a lender who handles the program

   Hey Prescott is not a lender and does not accept applications; this page describes the program so a buyer can take it to a lender or housing counselor.