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.

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.

Covenant Down Payment Assistance is open to first-time homebuyers and homebuyers who will live in the home as their primary residence. "First-time" has exceptions here: First-time homebuyer required (no ownership interest in principal residence in prior 3 years); buyer or buyer's parent/grandparent must have been a Washington resident on or before April 11, 1968. On credit, the program states: 620 minimum FICO; varies by underlying first mortgage product. A homebuyer education course is required, through WSHFC-sponsored Commission-Sponsored Homebuyer Education Seminar (5-hour course). Residency requirement: Property must be located in Washington State and occupied as primary residence; borrower or lineal ancestor must have been a Washington resident on or before April 11, 1968. Citizenship or immigration status: U.S. citizen or qualified non-citizen per agency loan-product guidelines. Created by Washington State's Covenant Homeownership Act (HB 1474, signed 2023). Eligibility requires: (1) borrower or borrower's lineal ancestor was a Washington resident on or before April 11, 1968, AND (2) the ancestor was a member of a group historically excluded from homeownership by racially restrictive covenants in Washington (per WSHFC's eligibility methodology, Black/African American applicants meeting the residency tests are the primary qualifying group; other groups identified by the state research study may also qualify). The program is designed to remedy past racial discrimination and is open only to those who can document that their family was harmed by race-based housing exclusion in Washington. Documentation of ancestral residency is required (e.g., census records, deeds, vital records). First-time homebuyer required. WSHFC Commission-Sponsored Homebuyer Education Seminar required. Must be paired with WSHFC Home Advantage first mortgage.

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.

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.

Covenant Down Payment Assistance names veterans, active-duty service members, reservists and National Guard members, surviving spouses, American Indian and Alaska Native homebuyers, educators, law enforcement officers, firefighters, healthcare workers, and homebuyers 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.

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

Applications for Covenant Down Payment Assistance go through the administering agency, which publishes the current terms and the application steps on its own site. Funds are reserved through Lender reserves via WSHFC's online lender portal alongside Home Advantage first mortgage reservation; eligibility prescreening required. Hey Prescott is not a lender and does not accept applications; this page describes the program so a homebuyer can take it to a lender or housing counselor.