“In 2024, nearly 40% of Washington homebuyers used some form of down payment assistance.” — Washington State Housing Finance Commission

Let’s face it—buying a home in Seattle, Snohomish County, or anywhere in King County these days can feel a bit like climbing Mt. Rainier in sneakers. But don’t worry—we’re not sending you out there alone.

If you’re starting your homebuying journey and wondering, “Is there any help out there for me?” the answer is a resounding yes. From down payment assistance programs to veteran benefits and even creative strategies like house hacking, Washington offers a variety of tools to help you plant that “SOLD” sign in front of your new place.

This guide breaks down the most helpful home buying assistance options available in Washington State, plus a few smart strategies that can save you serious cash.

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📘 What to Expect in This Guide

• Loan Programs: Primary mortgage options with favorable terms.
• Down Payment Assistance (DPA) Loans: Secondary loans to assist with down payments and closing costs.
• Grants: Funds that do not require repayment, aimed at specific groups or areas.
• Creative Strategies: Innovative approaches like house hacking, negotiating seller-paid closing costs and buying down your interest rate.
• FAQs: Common questions about home buying assistance in Washington.

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🏦 Loan Programs

These are primary mortgage loans that often come with favorable terms for eligible borrowers.

🏡 HomeReady Mortgage (Fannie Mae)

Designed for creditworthy low- to moderate-income borrowers.

• Down Payment: As low as 3%.
• Income Flexibility: Allows income from non-occupant co-borrowers, rental units, and boarders.
• Mortgage Insurance: Lower PMI costs, cancellable at 20% equity.
• Credit Score: Minimum 620.
• Income Limits: Up to 80% of the area median income (AMI).
• Education: Requires completion of a homeownership education course.

➡ Learn more: HomeReady Mortgage – Fannie Mae

🏡 Home Possible Mortgage (Freddie Mac)

Aimed at helping low- to moderate-income borrowers achieve homeownership.

• Down Payment: As low as 3%.
• Funding Sources: Accepts various sources, including family gifts and employer assistance.
• Mortgage Insurance: Reduced requirements, cancellable at 20% equity.
• Property Types: Eligible for single-family homes, manufactured homes, condos, and more.
• Credit Score: Minimum 660.
• Income Limits: Up to 80% of the AMI.

➡ Learn more: Home Possible Mortgage – Freddie Mac

🏡 FHA Loan (Federal Housing Administration)

Popular among first-time buyers with limited savings or lower credit.

• Down Payment: Minimum 3.5%.
• Credit Score: 580+ with 3.5% down.
• Flexibility: Can be combined with DPA programs like Home Advantage DPA or Chenoa Fund.

➡ Learn more: FHA Loan Information

🏡 VA Loan (U.S. Department of Veterans Affairs)

Exclusive to eligible veterans, active-duty service members, and surviving spouses.

• Down Payment: 0% required.
• Benefits: No mortgage insurance, competitive rates.
• Stackable: Can be paired with local grants for closing cost assistance.

➡ Learn more: VA Home Loans

🏡 USDA Loan (U.S. Department of Agriculture Rural Development)

For properties in eligible rural or suburban areas.

• Down Payment: 0% required.
• Income Limits: Typically capped around 115% of AMI.
• Credit Requirements: 640+ for streamlined approval.
• Closing Costs: Can often be rolled into the loan.

➡ Learn more: USDA Eligibility

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💰 Down Payment Assistance (DPA) Loans

Secondary loans to help cover down payments and closing costs. These are typically deferred-payment loans with low or no interest.

🏡 Home Advantage DPA (WSHFC)

• Assistance: Up to 4% of the first mortgage total or gross loan amount.
• Eligibility: Must be used with the Home Advantage first mortgage.
• Credit Score: Minimum 620.
• Income Limits: Up to $180,000.

➡ Learn more: Home Advantage Program

🏡 Home Advantage Needs-Based DPA (WSHFC)

• Assistance: Up to $10,000.
• Interest Rate: 1% deferred for 30 years.
• Eligibility: Must meet specific income thresholds and be used with the Home Advantage first mortgage.

➡ Learn more: Needs-Based DPA

🏡 Opportunity DPA (WSHFC)

• Assistance: Up to $15,000.
• Interest Rate: 1% deferred for 30 years.
• Eligibility: Must be used with the House Key Opportunity first mortgage.

➡ Learn more: Opportunity DPA

🏡 Veterans DPA (WSHFC)

• Assistance: Up to $10,000.
• Interest Rate: 3% simple interest, payments deferred for up to 30 years.
• Eligibility: Must be a Washington State veteran.

➡ Learn more: Veterans DPA

🏡 HomeChoice DPA (WSHFC)

• Assistance: Up to $15,000.
• Interest Rate: 1% deferred for 30 years.
• Eligibility: Buyers with a disability or families that include someone with a disability.

➡ Learn more: HomeChoice Program

🏡 Covenant Homeownership Program (WSHFC)

• Assistance: Up to 20% of the purchase price (not to exceed $150,000), plus applicable and customary closing costs.
• Interest Rate: 0% deferred loan.
• Eligibility: First-time homebuyers affected by historical housing discrimination in Washington State.

➡ Learn more: Covenant Program

🏡 ARCH East King County DPA

• Assistance: Up to $30,000.
• Interest Rate: 4% simple interest, no monthly payments.
• Eligibility: Buyers purchasing within ARCH member cities in East King County.

➡ Learn more: ARCH DPA Program

🏡 Bellingham DPA

• Assistance: Up to $40,000.
• Interest Rate: 3% simple interest, payments deferred for 30 years.
• Eligibility: Buyers within the city limits of Bellingham.

➡ Learn more: Bellingham DPA Info

🏡 Sam Smith “Hi Neighbor” Homeownership Fund (HomeSight)

• Assistance: Up to $12,000.
• Interest Rate: Deferred loan, repayable in 30 years or upon sale/refinance.
• Eligibility: First-time buyers in Seattle, specifically for Black/African American homebuyers.

➡ Learn more: Sam Smith Fund

🏡 Puget Sound Revolving Loan Fund (HomeSight)

• Assistance: Up to $70,000.
• Interest Rate: Deferred-payment second mortgage.
• Eligibility: Based on borrower income and program availability in King and Snohomish Counties.

➡ Learn more: Puget Sound Program

🏡 South King County Loan Product (HomeSight)

• Assistance: Up to $70,000 in layered loans (2nd, 3rd, or 4th mortgages).
• Interest Rate: Deferred payment loan, balloon payment due in year 30 or upon sale/refinance.
• Eligibility: Income-qualified borrowers in South King County.

➡ Learn more: South King Loan Program

🏡 VISTA / ITIN Loan Program (HomeSight)

• Assistance: First mortgage financing.
• Loan Amount: Minimum $50,000, maximum based on FHFA limits.
• Eligibility: Borrowers without SSNs who use ITINs, including undocumented or mixed-status families.

➡ Learn more: ITIN Program Info

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🏆 Grants

Grants are funds that do not require repayment, aimed at assisting specific groups or areas.

🏡 Sam Smith “Hi Neighbor” Homeownership Fund (HomeSight)

• Assistance: Up to $12,000.
• Eligibility: First-time buyers in Seattle, specifically for Black/African American homebuyers.

➡ Learn more: Sam Smith Fund

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🔑 Summary of Minimum Down Payments

Loan Type	Minimum Down Payment	Stackable With DPA?	Notes
VA Loan	0%	Yes	For eligible military service
USDA Loan	0%	Yes	Must buy in a USDA-eligible area
FHA Loan	3.5%	Yes	Widely used for DPA pairing
Conventional (HomeReady, etc.)	3%	Yes	Ideal for strong credit borrowers

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🛠️ House Hacking: Build Equity Fast

Let’s get creative—because in today’s Seattle real estate market, you need more than just a pre-approval and a dream. House hacking is one of the smartest ways to build wealth with real estate, especially for first-time buyers trying to make things pencil out.

What Is House Hacking?

House hacking is the practice of buying a home—usually one with multiple units or extra rentable space—and living in part of it while renting out the rest. That rental income helps cover your mortgage (and sometimes even cash flows), which makes homeownership far more affordable from day one.

Here’s what house hacking can look like:

• 🏘️ Buy a duplex, triplex, or fourplex, live in one unit, rent the others
• 🏡 Purchase a single-family home with a finished basement or ADU and rent it out
• 🛏️ Rent out individual rooms if you’re buying solo and don’t mind roommates

This isn’t just a theory—we’ve helped buyers in places like Meadowdale communities and Mountlake Terrace pull it off successfully.

Why It Works

• Offset Your Mortgage: Rents from your tenants reduce or eliminate your monthly housing cost.
• Qualify for a Bigger Loan: Some lenders will count future rental income when calculating how much you can borrow.
• Build Equity Faster: With reduced out-of-pocket expenses, you can pay down your mortgage quicker or invest in upgrades.
• Learn Landlording: Great stepping stone if you’re interested in becoming a real estate investor.

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🤝 House Hacking with Friends or Family: Try Nestment

Nestment.com is a new platform built around the idea of co-buying a home with friends, family, or partners—even if you’re not related or married. Think of it as the digital matchmaker for collaborative homeownership.

How Nestment Helps:

• Guided Process: From financing to legal agreements, Nestment walks you through every step.
• Custom Ownership Models: Decide how to split equity, costs, and responsibilities.
• Perfect for House Hacking: Buy a larger home together, live in separate units, share the benefits.

So if you’ve been thinking, “I’d love to buy with my sibling, cousin, or best friend, but how would we make it work?”—Nestment is your answer.

➡ Learn more: Visit Nestment.com

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💬 Seller-Paid Closing Costs: Yes, It’s Still a Thing

You’ve probably heard that the Seattle real estate market is competitive—and it is—but that doesn’t mean buyers are out of luck when it comes to getting creative at the negotiation table. One tried-and-true strategy? Asking the seller to cover some or all of your closing costs.

What Are Seller-Paid Closing Costs?

Seller-paid closing costs—also known as seller concessions—are exactly what they sound like: costs typically paid by the buyer that are negotiated to be covered by the seller at closing. These costs can include:

• 🧾 Escrow and title fees
• 📊 Appraisal fees
• 🛡️ Prepaid homeowners insurance
• 🏦 Property taxes
• 📝 Loan origination or underwriting fees

This strategy can save you thousands at closing and reduce your upfront cash burden, which is huge for buyers juggling down payments, moving expenses, and new furniture dreams.

And yes—it’s absolutely still possible, especially when:

• The home has been on the market a while
• The seller is relocating or has already bought a new place
• You’re working with a skilled Seattle real estate broker (like the team at The Madrona Group)

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🔻 Upgrade the Strategy: Use Seller Concessions for an Interest Rate Buydown

Here’s where things get interesting: you don’t have to use that seller credit for closing costs only. Many lenders allow you to apply those funds toward buying down your interest rate, including structured options like the 2/1 Buydown.

What’s a 2/1 Buydown?

A 2/1 Buydown is a temporary interest rate reduction designed to lower your monthly mortgage payments for the first two years:

• Year 1: Interest rate is 2% lower than your locked-in rate
• Year 2: Interest rate is 1% lower
• Year 3 onward: Interest rate resets to the original locked-in rate

Let’s say your final loan rate is 6.5%. With a 2/1 Buydown:

• Year 1 = 4.5%
• Year 2 = 5.5%
• Year 3+ = 6.5%

💡 This can save you hundreds per month early on—giving you breathing room as you settle in, furnish your home, or wait for income to rise.e.

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🧭 How to Get Started

Here’s a quick plan to get rolling:

1. Check your credit score – Aim for 620+ for most assistance programs
2. Talk to a lender – Make sure they’re WSHFC-approved
3. Take a homebuyer education class – Free and required
4. Get pre-approved – This unlocks your buying power
5. Connect with a knowledgeable broker – Like the crew at The Madrona Group

You can also check out our Steps to Buying Success for the full roadmap.

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❓ Frequently Asked Questions (FAQ)

How do I qualify for home buying assistance in Washington?

Most programs require:

• A minimum credit score of 620+
• Household income under $180,000
• Completion of a free homebuyer education class (offered by WSHFC or approved partners)

You’ll also need to work with a WSHFC-approved lender for most Washington-based assistance programs.

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Do I need to be a first-time buyer to qualify?

Not always. Programs like Home Advantage are available to both first-time and repeat buyers. However, some—like the Opportunity DPA—are specifically for first-time buyers only.

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Can I combine or stack assistance programs?

Yes! Many programs are designed to be layered. For example:

• Pair a WSHFC Home Advantage loan with Needs-Based DPA
• Use VA or FHA loans with local down payment assistance
• Stack seller-paid closing costs with a 2/1 interest rate buydown

Be sure to work with a knowledgeable lender who understands how to package these options legally and effectively.

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Is house hacking allowed with these programs?

Yes—so long as the property fits the program and loan requirements. For example:

• FHA loans allow you to buy up to a 4-unit property (as long as you live in one unit)
• Conventional loans can also support multi-unit purchases with the right income and credit
• Just check zoning and use rules for ADUs, duplexes, and triplexes in your area

This is a fantastic option for first-time buyers looking to offset their mortgage and build equity fast.

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Can I use seller-paid closing costs to buy down my interest rate?

Yes! One of the most powerful uses of seller concessions is to buy down your mortgage rate—especially with structured options like the 2/1 Buydown.

With a 2/1 Buydown:

• Year 1: Rate is 2% lower
• Year 2: Rate is 1% lower
• Year 3+: Rate resets to your locked-in rate

This strategy can significantly reduce your early monthly payments, giving you time to build savings or grow into your home financially.

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What’s the best way to start this process?

Here’s a simple path:

1. Check your credit score (aim for 620+)
2. Talk to a lender who is approved by WSHFC
3. Take a free homebuyer education class
4. Get pre-approved so you understand your full buying power
5. Connect with a Seattle real estate broker who’s experienced with assistance programs

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What is Nestment, and how can it help me buy a home?

Nestment.com is a platform that helps friends, family, or even co-investors buy homes together. It provides:

• Legal tools for co-buying
• Guidance on financing and ownership structures
• Support for first-time buyers using creative homeownership strategies (like house hacking)

It’s especially useful if you’re considering buying with others to share costs, qualify for a larger property, or offset living expenses.

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✅ Key Takeaways

• Washington offers multiple home buying assistance programs, many with down payment help, low rates, or both.
• Seattle, Snohomish County, and King County buyers can take advantage of state programs like Home Advantage and House Key.
• Creative options like house hacking and seller-paid closing costs can stretch your budget further.
• You’ll need to work with a WSHFC-approved lender and attend a free education seminar to qualify.
• Programs change annually, so work with a knowledgeable local broker to explore the latest options.

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📌 Final Thoughts on Home Buying Assistance

Home buying in Seattle doesn’t have to be out of reach. With the right resources, a solid plan, and a little creativity, you can find a path forward—even in a competitive market.

Whether you’re eyeing that cozy bungalow in Ballard or a fixer-upper in Lynnwood, understanding your home buying assistance options gives you the upper hand.

Jason Fox and the team at The Madrona Group believe every buyer deserves a fair shot at homeownership. So take a breath, get informed, and take that first step. You’ve got this—and we’ve got your back.