With outdoor beauty, major companies like Amazon and Microsoft and no state income tax, Washington continues to welcome new residents. In fact, more people have moved in than out of the state over the past three decades.

That influx can spell difficulties for first-time homebuyers, but all isn’t lost. The Washington State Housing Finance Commission works with mortgage lenders to offer a range of programs to help first-time buyers. The state’s definition of a first-time homebuyer provides some leeway, too: someone who hasn’t owned and occupied a primary residence in the last three years.

Washington first-time homebuyer loan programs

The Washington State Housing Finance Commission (WSHFC) oversees two primary first-time homebuyer mortgage programs, Home Advantage and House Key Opportunity, both of which can be applied to a conventional, FHA, VA or USDA loan. To qualify, you’ll need to complete a five-hour homebuyer education course and meet other program requirements.

WSHFC Home Advantage

The Home Advantage program can help Washington first-time homebuyers qualify for a low interest rate. The requirements are fairly straightforward:

  • 620 minimum credit score
  • Maximum 50 percent debt-to-income (DTI) ratio
  • Annual income under $180,000

WSHFC House Key Opportunity

House Key Opportunity is geared toward homebuyers with lower incomes who are also leveraging certain down payment assistance programs. The income limits range from $100,000 to $175,000, depending on where you want to buy and how big your household is. The home you want to buy cannot exceed a certain amount — ranging from $345,000 to $750,000 — based on the location of the home.

Like Home Advantage, the benefit of House Key Opportunity is a competitive interest rate, which is lower on FHA, VA and USDA loans. For a conventional loan, you’ll be able to qualify for a rate discount if your income is below 80 percent of the area median income (AMI). Here is a guide to the 80 percent limits by county.

WSHFC EnergySpark

If you qualify for the Home Advantage program, you might want to explore buying a home that is especially eco-friendly or one that can be renovated to meet Washington’s green standards. If so, you could be eligible to take advantage of the EnergySpark program, which offers an additional discount on your interest rate.

The property requirements include:

  • Must be a new home that meets specific NEEM/Energy Star, LEED, Department of Energy Zero Energy Ready Home, Passive House or Built Green certification standards; or
  • Must be an existing home that can be renovated to deliver at least 10 percent energy savings compared to its existing usage

Washington down payment assistance

Coming up with a down payment for a home in Washington can be daunting, but if you’re a first-time homebuyer, the state has a few options that can help. In fact, according to the WSHFC, the average homebuyer scores $10,000 in down payment assistance through the agency.

All of the following assistance programs are loans, and you’ll need to pay them back when you sell your home or refinance your mortgage or pay it off. To qualify, you’ll need a minimum credit score of 620 and to meet income requirements, which vary by program. You could also be eligible if you’re not a first-time buyer but purchasing in a specified “targeted area.”

Home Advantage Down Payment Assistance (DPA)

Combined with a Home Advantage first mortgage, this down payment assistance loan can provide up to 4 percent of the total amount of your mortgage (up to 5 percent if getting a conventional or FHA loan). There is no interest charged on the loan, and payments are deferred for 30 years.

Home Advantage DPA Needs Based

Also paired with a Home Advantage first mortgage, this program is for homebuyers making considerably less than the $180,000 income threshold. If your annual income is less than $114,600 (or $146,500 in King or Snohomish counties), you could be eligible for up to a $10,000, 30-year loan for your down payment needs. You’ll pay 1 percent interest on the loan, but won’t repay the funds and interest until the loan term ends.

Opportunity DPA

This down payment assistance program, combined with the House Key Opportunity first mortgage, is a second mortgage of up to $15,000, with a 1 percent interest rate and 30-year deferred payments. The income limits are much lower and vary based on location and number of people in the household:

County 1-2 person household 3+ person household
As of May 17, 2023

Source: Washington State Housing Finance Commission

King, Snohomish $80,750 $100,900
Clark, Kitsap, Pierce, Skamania, Thurston, Whatcom $72,200 $90,200
All others $59,150 $73,900

Veterans DPA

Veterans and their surviving and never-remarried spouses and dependent children can also qualify for up to $10,000 in down payment funds packaged as a second mortgage. The payments on the mortgage are deferred for 30 years, with an interest rate of 3 percent. The assistance can be combined with either the Home Advantage or House Key Opportunity first mortgage.

HomeChoice Disability DPA

If you or someone in your household is living with a disability, you might qualify for up to $15,000 in down payment assistance, also as a second mortgage. The second loan has a 1 percent interest rate and, like other down payment assistance, defers payments for 30 years.

Other first-time homebuyer loan programs

First-time homebuyers in Washington can also find help through local housing initiatives. The City of Tacoma, for example, offered up to $60,000 in down payment help to borrowers buying a home in 2024.

It’s not just about where you buy, either — where you get the financing for your home can make a big difference in your ability to get assistance. For instance, BECU, the Boeing Employees’ Credit Union based in Washington, offers a first-time homebuyer grant up to $10,000 for eligible members. Grants are typically better than second mortgages because you don’t have to pay them back (although some second mortgage loans are forgivable after a certain timeframe).

While you’re considering first-time buyer programs in Washington, be sure to explore the variety of nationally available loan programs, too, including:

  • FHA loans – If you have a lower credit score or limited savings, consider an FHA loan. These loans are widely available, have a minimum credit score of 580 and require a down payment as little as 3.5 percent.
  • VA loans – If you’re a member of the military or veteran, you could qualify for a VA loan, which doesn’t require a down payment.
  • USDA loans – USDA loans don’t have a down payment requirement, but are only available to borrowers buying in a USDA-eligible rural area. You typically need a credit score of 640 or higher to qualify.
  • Good Neighbor Next Door program – This HUD program has a very low down payment requirement on homes in certain areas, coupled with the ability to save 50 percent on the purchase price.

Get started

Ready to move one step closer to your first home in Washington? As you prepare to become a first-time homebuyer, here are some next steps:

  • Do your homework. As you sort through mortgage and down payment assistance options, you can fill out this form through the Washington State Housing Finance Commission to help determine which programs best fit your needs.
  • Work on your credit score. It’s the most important factor in determining your mortgage rate, so focus on boosting your number.
  • Compare lenders. You can use the WSHFC website to find loan officers to help you navigate the process. Each works for a lender that could have different interest rates and terms, so comparison is key.