HB1696 • 2026

Covenant homeownership prg.

Modifying the covenant homeownership program.

Crime Elections Housing Labor Taxes

Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor: Representative Taylor, Representative Peterson, Representative Ryu, Representative Ortiz-Self, Representative Stearns, Representative Salahuddin, Representative Duerr, Representative Reed, Representative Cortes, Representative Street, Representative Mena, Representative Entenman, Representative Hill, Representative Gregerson, Representative Simmons, Representative Obras, Representative Santos, Representative Ramel, Representative Donaghy, Representative Berry, Representative Goodman, Representative Parshley, Representative Stonier, Representative Scott, Representative Fosse, Representative Berg, Representative Macri, Representative Kloba, Representative Nance, Representative Hunt, Representative Springer, Representative Fey, Representative Walen, Representative Leavitt, Representative Reeves, Representative Bergquist, Representative Bernbaum, Representative Doglio, Representative Zahn, Representative Pollet, Representative Ormsby, Representative Thomas
Last action: 2025-03-06
Official status: H subst for
Effective date: Not listed

Plain English Breakdown

Using official source text because the generated explanation was unavailable or could not be confirmed against the official bill text.

Covenant homeownership prg.

What This Bill Does

Covenant homeownership prg.

Limits and Unknowns

This entry is temporarily using official source text because the generated explanation could not be confirmed against the official bill text during the last sync.

Amendments

These notes stay tied to the official amendment files and metadata from the legislature.

1696-S2 AMH CALD SERE 156

164 • Valdez

NOT ADOPTED

Plain English: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 1696-S2 AMH CALD SERE 156 1 - Official Print EFFECT: Limits the amount of loan forgiveness to three percent of the purchase price of the house.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 1696-S2 AMH CALD SERE 156 1 - Official Print EFFECT: Limits the amount of loan forgiveness to three percent of the purchase price of the house.
1696-S2 AMH CALD SERE 156 2SHB 1696 - H AMD 164 By Representative Caldier NOT ADOPTED 03/06/2025 On page 3, line 4, after "years" insert "and the remaining amount owed does not exceed three percent of the amount paid by the program participant to purchase the house" --- END

1696-S2 AMH JACO SERE 160

165 • Jacobsen

WITHDRAWN

Plain English: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 1696-S2 AMH JACO SERE 160 1 - Official Print EFFECT: Prohibits loan forgiveness for a Covenant Homeownership Program participant who has been convicted of a felony while participating in the program.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 1696-S2 AMH JACO SERE 160 1 - Official Print EFFECT: Prohibits loan forgiveness for a Covenant Homeownership Program participant who has been convicted of a felony while participating in the program.
1696-S2 AMH JACO SERE 160 2SHB 1696 - H AMD 165 By Representative Jacobsen WITHDRAWN 03/06/2025 On page 3, line 4, after "years" insert "unless the program participant has been convicted of a felony while participating in the program" --- END

1696-S2 AMH DUFA VASE 149

171 • Dufault

NOT ADOPTED

Plain English: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 1696-S2 AMH DUFA VASE 149 1 - Official Print 1696-S2 AMH DUFA VASE 149 2SHB 1696 - H AMD 171 By Representative Dufault NOT ADOPTED 03/06/2025 On page 7, after line 18, insert the following: "NEW SECTION.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 1696-S2 AMH DUFA VASE 149 1 - Official Print 1696-S2 AMH DUFA VASE 149 2SHB 1696 - H AMD 171 By Representative Dufault NOT ADOPTED 03/06/2025 On page 7, after line 18, insert the following: "NEW SECTION.
Sec.
3.
A new section is added to chapter 43.181 RCW to read as follows: (1) This act may not be implemented unless: (a) The commission requests a formal opinion by the attorney general on the following questions: (i) Whether the restrictions on gifting of funds and lending of credit in article VIII, sections 5 and 7 of the state Constitution prohibit the commission from using funds from the assessment established in RCW 36.22.185 to create one or more special purpose credit programs to provide down payment and closing cost assistance to program participants who meet the eligibility criteria specified in this chapter, including the requirement in RCW 43.181.040(4) that a special purpose credit program applicant must have a household income at or below 120 percent of the area median income for the county where the home is located; and (ii) Whether the restrictions on gifting of funds and lending of credit in article VIII, sections 5 and 7 of the state Constitution prohibit a special purpose credit program authorized under this chapter from fully forgiving a loan for down payment and closing cost assistance once the loan has been outstanding for at least five years for program participants who have a household income at or below 80 percent of the area median income for the county where the home is located at the time that the loan is made as specified under RCW 43.181.040(3)(b); and (b) The attorney general opinion finds that the restrictions on gifting of funds and lending of credit in article VIII, sections 5 and 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 1696-S2 AMH DUFA VASE 149 2 - Official Print EFFECT: Prohibits the bill from being implemented unless (1) the Housing Finance Commission (Commission) requests a formal opinion by the Attorney General as to whether the state Constitutional restrictions on gifting of funds and lending of credit prohibit the Commission from implementing the bill, and (2) the opinion finds that the state constitutional restrictions do not prohibit implementation of the bill.

1696-S2 AMH CALD SERE 163

172 • Valdez

NOT ADOPTED

Plain English: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 1696-S2 AMH CALD SERE 163 1 - Official Print EFFECT: Adds to the loan forgiveness eligibility requirements that the program participant must have been employed full-time for at least 60 months with a federal, state, local, or tribal government, a branch of the United States armed forces, or a nonprofit entity.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 1696-S2 AMH CALD SERE 163 1 - Official Print EFFECT: Adds to the loan forgiveness eligibility requirements that the program participant must have been employed full-time for at least 60 months with a federal, state, local, or tribal government, a branch of the United States armed forces, or a nonprofit entity.
1696-S2 AMH CALD SERE 163 2SHB 1696 - H AMD 172 By Representative Caldier NOT ADOPTED 03/06/2025 On page 3, line 4, after "years" insert "if the program participant has been employed full-time with a qualifying employer for at least 60 months" On page 4, after line 10, insert the following: "(8) For the purposes of this section, "qualifying employer" means a federal, state, local, or tribal government, a branch of the United States armed forces, or a nonprofit entity that is exempt from taxation under Title 26 U.S.C.
Sec.
501(c)(3) of the federal internal revenue code of 1986." --- END

1696-S2 AMH COUT SERE 157

173 • Couture

NOT ADOPTED

Plain English: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 1696-S2 AMH COUT SERE 157 1 - Official Print EFFECT: Requires the Secretary of State to submit the Act to the people, for their adoption or rejection, at the state's next general election.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 1696-S2 AMH COUT SERE 157 1 - Official Print EFFECT: Requires the Secretary of State to submit the Act to the people, for their adoption or rejection, at the state's next general election.
1696-S2 AMH COUT SERE 157 2SHB 1696 - H AMD 173 By Representative Couture NOT ADOPTED 03/06/2025 On page 7, after line 18, insert the following: "NEW SECTION.
Sec.
3.

1696-S2 AMH COUT VASE 147

174 • Couture

NOT ADOPTED

Plain English: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 1696-S2 AMH COUT VASE 147 1 - Official Print EFFECT: Increases the length of time that a Covenant Homeownership Program loan must be outstanding before the loan may be fully forgiven to 10 years, instead of five years.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 1696-S2 AMH COUT VASE 147 1 - Official Print EFFECT: Increases the length of time that a Covenant Homeownership Program loan must be outstanding before the loan may be fully forgiven to 10 years, instead of five years.
1696-S2 AMH COUT VASE 147 2SHB 1696 - H AMD 174 By Representative Couture NOT ADOPTED 03/06/2025 On page 3, line 3, after "least" strike "five" and insert "10" --- END

1696-S2 AMH ENGE VASE 152

176 • Engell

NOT ADOPTED

Plain English: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 1696-S2 AMH ENGE VASE 152 1 - Official Print EFFECT: Provides that down payment and closing cost assistance may be provided to applicants with household incomes that exceed 100 percent of the area median income only if the revenues collected under the Covenant Homeownership Program assessment for the prior fiscal year increased by at least 10 percent compared to revenues collected during the fiscal year two years prior.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 1696-S2 AMH ENGE VASE 152 1 - Official Print EFFECT: Provides that down payment and closing cost assistance may be provided to applicants with household incomes that exceed 100 percent of the area median income only if the revenues collected under the Covenant Homeownership Program assessment for the prior fiscal year increased by at least 10 percent compared to revenues collected during the fiscal year two years prior.
1696-S2 AMH ENGE VASE 152 2SHB 1696 - H AMD 176 By Representative Engell NOT ADOPTED 03/06/2025 On page 3, line 29, after "(5)" insert "In each fiscal year, the commission may provide down payment and closing cost assistance through a special purpose credit program authorized under this section to applicants with household incomes that exceed 100 percent of the area median income for the county where the home is located only if the revenues collected under the covenant homeownership program assessment established in RCW 36.22.185 for the prior fiscal year increased by at least 10 percent compared to revenues collected during the fiscal year two years prior.
(6)" Renumber the remaining subsections consecutively and correct any internal references accordingly.
END

1696-S2 AMH CONN VASE 146

177 • Connors

NOT ADOPTED

Plain English: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 1696-S2 AMH CONN VASE 146 1 - Official Print EFFECT: Prohibits a special purpose credit program authorized under the Covenant Homeownership Program from forgiving any loans until all program applicants have been served.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 1696-S2 AMH CONN VASE 146 1 - Official Print EFFECT: Prohibits a special purpose credit program authorized under the Covenant Homeownership Program from forgiving any loans until all program applicants have been served.
1696-S2 AMH CONN VASE 146 2SHB 1696 - H AMD 177 By Representative Connors NOT ADOPTED 03/06/2025 On page 2, line 34, after "(b)(ii)" insert "and (iii)" On page 3, line 4, after "years" insert "; (iii) A special purpose credit program authorized under this section may not forgive any loans until all program applicants have been served" --- END

1696-S2 AMH LOW VASE 148

178 • Low

NOT ADOPTED

Plain English: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 1696-S2 AMH LOW VASE 148 1 - Official Print EFFECT: Requires special purpose credit programs authorized under the Covenant Homeownership Program to prioritize loans for program participants with incomes at or below 80 percent of the area median income.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 1696-S2 AMH LOW VASE 148 1 - Official Print EFFECT: Requires special purpose credit programs authorized under the Covenant Homeownership Program to prioritize loans for program participants with incomes at or below 80 percent of the area median income.
1696-S2 AMH LOW VASE 148 2SHB 1696 - H AMD 178 By Representative Low NOT ADOPTED 03/06/2025 On page 2, line 33, after "assistance" insert ".
The special purpose credit program must prioritize loans for program participants with incomes at or below 80 percent of the area median income for the county where the home is located" --- END

1696-S2 AMH LOW VASE 151

180 • Low

NOT ADOPTED

Plain English: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 1696-S2 AMH LOW VASE 151 1 - Official Print EFFECT: Delays the effective date for the section of the bill that raises the area median income threshold for Covenant Homeownership Program eligibility and authorizes loan forgiveness to July 1, 2035.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 1696-S2 AMH LOW VASE 151 1 - Official Print EFFECT: Delays the effective date for the section of the bill that raises the area median income threshold for Covenant Homeownership Program eligibility and authorizes loan forgiveness to July 1, 2035.
1696-S2 AMH LOW VASE 151 2SHB 1696 - H AMD 180 By Representative Low NOT ADOPTED 03/06/2025 On page 7, after line 18, insert the following: "NEW SECTION.
Sec.
3.

1696-S2 AMH DUFA VASE 150

181 • Dufault

NOT ADOPTED

Plain English: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 1696-S2 AMH DUFA VASE 150 1 - Official Print EFFECT: Prohibits the bill from being implemented until on or after the date that any court cases challenging the Covenant Homeownership Program are fully resolved and no longer subject to appeal.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 1696-S2 AMH DUFA VASE 150 1 - Official Print EFFECT: Prohibits the bill from being implemented until on or after the date that any court cases challenging the Covenant Homeownership Program are fully resolved and no longer subject to appeal.
1696-S2 AMH DUFA VASE 150 2SHB 1696 - H AMD 181 By Representative Dufault NOT ADOPTED 03/06/2025 On page 7, after line 18, insert the following: "NEW SECTION.
Sec.
3.

1696-S2 AMH MANJ VASE 145

182 • Manjarrez

NOT ADOPTED

Plain English: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 1696-S2 AMH MANJ VASE 145 1 - Official Print EFFECT: Lowers the area median income (AMI) threshold for Covenant Homeownership Program eligibility to 80 percent of the AMI for the county where the home is located.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 1696-S2 AMH MANJ VASE 145 1 - Official Print EFFECT: Lowers the area median income (AMI) threshold for Covenant Homeownership Program eligibility to 80 percent of the AMI for the county where the home is located.
1696-S2 AMH MANJ VASE 145 2SHB 1696 - H AMD 182 By Representative Manjarrez NOT ADOPTED 03/06/2025 On page 3, line 10, after "((100))" strike "120" and insert "80" --- END

1696-S2 AMH BARK SERE 158

183 • Barkis

NOT ADOPTED

Plain English: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 1696-S2 AMH BARK SERE 158 1 - Official Print EFFECT: Adds to the loan forgiveness eligibility requirements that the program participant must be at least 70 years old.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 1696-S2 AMH BARK SERE 158 1 - Official Print EFFECT: Adds to the loan forgiveness eligibility requirements that the program participant must be at least 70 years old.
1696-S2 AMH BARK SERE 158 2SHB 1696 - H AMD 183 By Representative Barkis NOT ADOPTED 03/06/2025 On page 2, line 38, after "who" insert "is at least 70 years old and" --- END

1696-S2 AMH CORR VASE 144

184 • Corry

NOT ADOPTED

Plain English: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 1696-S2 AMH CORR VASE 144 1 - Official Print EFFECT: Modifies the loan forgivability provisions by authorizing loan forgiveness only for Covenant Homeownership Program participants who have a household income at or below 80 percent of the area median income at the time that the loan is forgiven, instead of at the time that the loan is made.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 1696-S2 AMH CORR VASE 144 1 - Official Print EFFECT: Modifies the loan forgivability provisions by authorizing loan forgiveness only for Covenant Homeownership Program participants who have a household income at or below 80 percent of the area median income at the time that the loan is forgiven, instead of at the time that the loan is made.
1696-S2 AMH CORR VASE 144 2SHB 1696 - H AMD 184 By Representative Corry NOT ADOPTED 03/06/2025 On page 2, line 40, after "loan is" strike "made" and insert "forgiven" --- END

1696-S2 AMH GRIF SERE 159

192 • Griffey

NOT ADOPTED

Plain English: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 1696-S2 AMH GRIF SERE 159 1 - Official Print EFFECT: Prohibits loan forgiveness for a Covenant Homeownership Program participant who has ever been convicted of a sex offense.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 1696-S2 AMH GRIF SERE 159 1 - Official Print EFFECT: Prohibits loan forgiveness for a Covenant Homeownership Program participant who has ever been convicted of a sex offense.
1696-S2 AMH GRIF SERE 159 2SHB 1696 - H AMD 192 By Representative Griffey NOT ADOPTED 03/06/2025 On page 3, line 4, after "years" insert "unless the program participant has ever been convicted of a sex offense as defined in RCW 9A.44.128" --- END

1696-S2 AMS GILD S2855.1

305 • Gildon

NOT ADOPTED

Plain English: 1696-S2 AMS GILD S2855.1 2SHB 1696 - S AMD 305 By Senator Gildon NOT ADOPTED 04/14/2025 On page 3, line 10, after "below" strike " ((100)) 120" and insert 1 "100" 2 EFFECT: Restores the area median income for program eligibility to 100 percent.

1696-S2 AMS GILD S2855.1 2SHB 1696 - S AMD 305 By Senator Gildon NOT ADOPTED 04/14/2025 On page 3, line 10, after "below" strike " ((100)) 120" and insert 1 "100" 2 EFFECT: Restores the area median income for program eligibility to 100 percent.
END --- Code Rev/MFW:eab 1 S-2855.1/25

1696-S2 AMS WAGO S3023.1

356 • Wagoner

NOT ADOPTED

Plain English: 1696-S2 AMS WAGO S3023.1 2SHB 1696 - S AMD 356 By Senator Wagoner NOT ADOPTED 04/14/2025 On page 2, line 17, after " 43.181.030" insert " , which includes 1 Black, Latino, Native American, Alaska Native, Native Hawaiian, other 2 Pacific Islander, Korean, Asian Indian, Chinese, Japanese, or Jewish 3 borrowers" 4 EFFECT: Adds the list of economically disadvantaged classes of persons identified in the covenant homeownership program study that are eligible for special purpose credit programs through the Covenant Homeownership Program and includes Chinese, Japanese, and Jewish borrowers.

1696-S2 AMS WAGO S3023.1 2SHB 1696 - S AMD 356 By Senator Wagoner NOT ADOPTED 04/14/2025 On page 2, line 17, after " 43.181.030" insert " , which includes 1 Black, Latino, Native American, Alaska Native, Native Hawaiian, other 2 Pacific Islander, Korean, Asian Indian, Chinese, Japanese, or Jewish 3 borrowers" 4 EFFECT: Adds the list of economically disadvantaged classes of persons identified in the covenant homeownership program study that are eligible for special purpose credit programs through the Covenant Homeownership Program and includes Chinese, Japanese, and Jewish borrowers.
END --- Code Rev/MFW:eab 1 S-3023.1/25

1696-S2 AMS GILD S3032.1

358 • Gildon

NOT ADOPTED

Plain English: 1696-S2 AMS GILD S3032.1 2SHB 1696 - S AMD 358 By Senator Gildon NOT ADOPTED 04/14/2025 On page 4, after line 10, insert the following:1 "(8) The special purpose credit program established under this 2 section expires June 30, 2029, unless the covenant homeownership 3 program study under RCW 43.181.030 determines that the special 4 purpose credit program continues to be necessary to reduce racial 5 disparities in homeownership in the state by providing down payment 6 and closing cost assistance to an economically disadvantaged person 7 who meets the criteria under subsection (4) of this section and the 8 legislature extends the expiration." 9 EFFECT: Expires the special purpose credit program June 30, 2029, unless the covenant homeownership program study determines that the special purpose credit program continues to be necessary to reduce racial disparities in homeownership in the state by providing down payment and closing cost assistance to an economically disadvantaged person who meets the criteria and the legislature extends the expiration.

1696-S2 AMS GILD S3032.1 2SHB 1696 - S AMD 358 By Senator Gildon NOT ADOPTED 04/14/2025 On page 4, after line 10, insert the following:1 "(8) The special purpose credit program established under this 2 section expires June 30, 2029, unless the covenant homeownership 3 program study under RCW 43.181.030 determines that the special 4 purpose credit program continues to be necessary to reduce racial 5 disparities in homeownership in the state by providing down payment 6 and closing cost assistance to an economically disadvantaged person 7 who meets the criteria under subsection (4) of this section and the 8 legislature extends the expiration." 9 EFFECT: Expires the special purpose credit program June 30, 2029, unless the covenant homeownership program study determines that the special purpose credit program continues to be necessary to reduce racial disparities in homeownership in the state by providing down payment and closing cost assistance to an economically disadvantaged person who meets the criteria and the legislature extends the expiration.
END --- Code Rev/MFW:eab 1 S-3032.1/25

1696-S2 AMS WAGO S2812.1

360 • Wagoner

WITHDRAWN

Plain English: 1696-S2 AMS WAGO S2812.1 2SHB 1696 - S AMD 360 By Senator Wagoner WITHDRAWN 04/14/2025 On page 2, line 17, after " 43.181.030" insert " , which includes 1 Black, Latino, Native American, Alaska Native, Native Hawaiian, other 2 Pacific Islander, Korean, Asian Indian, Chinese, or Japanese 3 borrowers" 4 EFFECT: Adds the list of economically disadvantaged classes of persons identified in the covenant homeownership program study that are eligible for special purpose credit programs through the Covenant Homeownership Program and includes Chinese and Japanese borrowers.

1696-S2 AMS WAGO S2812.1 2SHB 1696 - S AMD 360 By Senator Wagoner WITHDRAWN 04/14/2025 On page 2, line 17, after " 43.181.030" insert " , which includes 1 Black, Latino, Native American, Alaska Native, Native Hawaiian, other 2 Pacific Islander, Korean, Asian Indian, Chinese, or Japanese 3 borrowers" 4 EFFECT: Adds the list of economically disadvantaged classes of persons identified in the covenant homeownership program study that are eligible for special purpose credit programs through the Covenant Homeownership Program and includes Chinese and Japanese borrowers.
END --- Code Rev/MFW:akl 1 S-2812.1/25

1696-S2 AMS FORT S3061.2

362 • Fortunato

NOT ADOPTED

Plain English: 1696-S2 AMS FORT S3061.2 2SHB 1696 - S AMD 362 By Senator Fortunato NOT ADOPTED 04/14/2025 On page 3, line 19, after "1968" insert " , or was discriminated 1 against because the resident was listed as an enemy alien during 2 World War II, or was a descendent of a person who was on the enemy 3 alien list, and not otherwise compensated" 4 EFFECT: Includes persons, and the descendants of those persons, who were discriminated against because they were listed as enemy aliens during World War II and not otherwise compensated as eligible to qualify for down payment and closing cost assistance through a special purpose credit program.

1696-S2 AMS FORT S3061.2 2SHB 1696 - S AMD 362 By Senator Fortunato NOT ADOPTED 04/14/2025 On page 3, line 19, after "1968" insert " , or was discriminated 1 against because the resident was listed as an enemy alien during 2 World War II, or was a descendent of a person who was on the enemy 3 alien list, and not otherwise compensated" 4 EFFECT: Includes persons, and the descendants of those persons, who were discriminated against because they were listed as enemy aliens during World War II and not otherwise compensated as eligible to qualify for down payment and closing cost assistance through a special purpose credit program.
END --- Code Rev/MFW:eab 1 S-3061.2/25 2nd draft

Bill History

2025-03-06 House
2nd substitute bill substituted.

Official Summary Text

Covenant homeownership prg.

Current Bill Text

Read the full stored bill text

AN ACT Relating to modifying the covenant homeownership program 1
by adjusting the area median income threshold for program 2
eligibility, introducing loan forgiveness, and modifying the 3
oversight committee membership; and amending RCW 43.181.040 and 4
43.181.050. 5
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:6
Sec. 1. RCW 43.181.040 and 2023 c 340 s 6 are each amended to 7
read as follows: 8
(1) As part of the covenant homeownership program, the department 9
shall contract with the commission to design, develop, implement, and 10
evaluate one or more special purpose credit programs to reduce racial 11
disparities in homeownership in the state by providing down payment 12
and closing cost assistance. The contract must authorize the 13
commission to use the contract funding as follows:14
(a) The contract must authorize the commission to use up to one 15
percent of the contract funding for costs related to administering 16
the program including, but not limited to, costs related to 17
completing a covenant homeownership program study required under RCW 18
43.181.030, and other administrative, data collection, and reporting 19
costs; 20
H-0283.2
HOUSE BILL 1696
State of Washington 69th Legislature 2025 Regular Session
By Representatives Taylor, Peterson, Ryu, Ortiz-Self, Stearns,
Salahuddin, Duerr, Reed, Cortes, Street, Mena, Entenman, Hill,
Gregerson, Simmons, Obras, Santos, Ramel, Donaghy, Berry, Goodman,
Parshley, Stonier, Scott, Fosse, Berg, Macri, Kloba, Nance, Hunt,
Springer, Fey, Walen, Leavitt, Reeves, Bergquist, Bernbaum, Doglio,
Zahn, Pollet, Ormsby, and Thomas
Read first time 01/29/25. Referred to Committee on Housing.
p. 1 HB 1696
(b) The contract must authorize the commission to use up to one 1
percent of the contract funding to provide targeted education, 2
homeownership counseling, and outreach about special purpose credit 3
programs created under this section to black, indigenous, and people 4
of color and other historically marginalized communities in 5
Washington state, including outreach to relevant affinity groups for 6
mortgage lenders; and 7
(c) The contract must authorize the commission to use the 8
remainder of the contract funding to provide down payment and closing 9
cost assistance to program participants. This portion of the contract 10
funding may not be used to provide any type of assistance other than 11
down payment and closing cost assistance. 12
(2) The commission shall create one or more special purpose 13
credit programs to provide down payment and closing cost assistance 14
for the benefit of one or more economically disadvantaged classes of 15
persons identified in a covenant homeownership program study under 16
RCW 43.181.030. In creating a special purpose credit program, the 17
commission must consider the evidence-based documentation and 18
programmatic and policy recommendations set forth in the initial 19
covenant homeownership program study and any subsequent program 20
studies. If the covenant homeownership program study identifies an 21
economically disadvantaged class or classes of persons that share one 22
or more common characteristics such as, race, national origin, or sex 23
and the board of the commission finds it necessary to consider this 24
information in tailoring a special purpose credit program to provide 25
credit assistance to economically disadvantaged classes of persons, 26
the commission may consider these characteristics in designing and 27
implementing the program. 28
(3) At minimum, a special purpose credit program authorized under 29
this section must: 30
(a) Provide loans for down payment and closing cost assistance to 31
program participants that can be combined with other forms of down 32
payment and closing cost assistance; 33
(b) ((Require)) (i) Except as provided in (b)(ii) of this 34
subsection, require a program participant to repay loans for down 35
payment and closing cost assistance at the time that the house is 36
sold; 37
(ii) A special purpose credit program authorized under this 38
section may fully forgive a loan once the loan has been in repayment 39
for at least five years; and 40
p. 2 HB 1696
(c) Be implemented in conjunction with the commission's housing 1
finance programs. 2
(4) To be eligible to receive down payment and closing cost 3
assistance through a special purpose credit program authorized under 4
this section, a special purpose credit program applicant must:5
(a) Have a household income at or below ((100)) 140 percent of 6
the area median income for the county where the home is located, as 7
adjusted under subsection (5) of this section; 8
(b) Be a first-time homebuyer; and 9
(c)(i) Be a Washington state resident who: 10
(A) Was a Washington state resident on or before the enactment of 11
the federal fair housing act (Title VIII of the civil rights act of 12
1968; P.L. 90–284; 82 Stat. 73) on April 11, 1968, and was or would 13
have been excluded from homeownership in Washington state by a 14
racially restrictive real estate covenant on or before April 11, 15
1968; or 16
(B) Is a descendant of a person who meets the criteria in 17
(c)(i)(A) of this subsection; 18
(ii) Records that show a person's address on or about a specific 19
date or include a reference indicating that a person is a resident of 20
a specific city or area on or about a specific date may be used to 21
provide proof that a person satisfies the criteria in (c)(i) of this 22
subsection, such as genealogical records, vital records, church 23
records, military records, probate records, public records, census 24
data, newspaper clippings, and other similar documents.25
(5) The commission may adopt rules, and shall adopt program 26
policies, as necessary to implement this section. Program rules or 27
policies must include procedures and standards for extending credit 28
under the special purpose credit program, including program 29
eligibility requirements. The commission may adjust the area median 30
income threshold for program eligibility by county, up to the 31
threshold specified in subsection (4)(a) of this section, based on a 32
reasonable determination of the need for housing assistance in each 33
county. From time to time, including in response to a covenant 34
homeownership program study's evaluation of program efficacy, the 35
board of the commission may amend the special purpose credit 36
programs, rules, and policies. 37
(6) By July 1, 2024, one or more of the special purpose credit 38
programs must begin providing down payment and closing cost 39
assistance to program participants. 40
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(7) By December 31, 2025, and by each following December 31st, 1
and in compliance with RCW 43.01.036, the commission shall submit an 2
annual report to the appropriate committees of the legislature on the 3
progress of the special purpose credit program or programs developed 4
under this section. The report shall include, at minimum, the program 5
eligibility requirements, the type and amount of down payment and 6
closing cost assistance provided to program participants, the number 7
of program participants and their corresponding eligibility 8
categories, the location of property financed, and program outreach 9
efforts. The report must be posted on the commission's website.10
Sec. 2. RCW 43.181.050 and 2023 c 340 s 7 are each amended to 11
read as follows: 12
(1) The department of financial institutions shall establish the 13
covenant homeownership program oversight committee consisting of the 14
following members appointed by the governor, except for the 15
legislative members who must be appointed by the president of the 16
senate or the speaker of the house of representatives as described in 17
this section: 18
(a) One person who meets the eligibility criteria for the special 19
purpose credit program described in RCW 43.181.040(4) and is from 20
east of the crest of the Cascade mountains; 21
(b) One person who meets the eligibility criteria for the special 22
purpose credit program described in RCW 43.181.040(4) and is from 23
west of the crest of the Cascade mountains; 24
(c) One representative of an organization that operates a special 25
purpose credit program, counseling service, or debt relief program 26
that serves persons who were commonly subject to unlawful exclusions 27
contained in racially restrictive real estate covenants as defined in 28
RCW 43.181.010; 29
(d) One representative of a ((community-based)) nonprofit 30
organization that ((specializes in the development of permanently 31
affordable housing that serves )) provides housing counseling to 32
persons who were commonly subject to unlawful exclusions contained in 33
racially restrictive real estate covenants; 34
(e) One representative of the real estate sales profession;35
(f) One representative of the home mortgage lending profession 36
who has a minimum of five years' lending or underwriting experience;37
(g) One representative of the nonprofit affordable housing 38
development industry; 39
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(h) Two senators, one from each of the two largest caucuses, 1
appointed by the president of the senate; and 2
(i) Two members of the house of representatives, one from each of 3
the two largest caucuses, appointed by the speaker of the house of 4
representatives. 5
(2)(a) Nonlegislative members shall each serve a three-year term, 6
subject to renewal for no more than one additional three-year term. 7
The oversight committee shall develop rules that provide for the 8
staggering of terms so that, after the first two years of the 9
committee's existence, the terms of one-third of the nonlegislative 10
members expire each year. 11
(b) Legislative members shall each serve a two-year term, subject 12
to renewal for no more than one additional two-year term.13
(c) On the expiration of the term of each member, the governor, 14
president of the senate, or the speaker of the house of 15
representatives, as authorized under subsection (1) of this section, 16
shall appoint a successor to serve for a term of two years if the 17
successor is a legislative member, or three years if the successor is 18
a nonlegislative member. 19
(d) The governor may remove a nonlegislative member of the 20
oversight committee for cause. The president of the senate may remove 21
a senator serving as a legislative member of the oversight committee 22
for cause, and the speaker of the house of representatives may remove 23
a member of the house of representatives serving as a legislative 24
member of the oversight committee for cause. 25
(e) Vacancies on the oversight committee for any reason must be 26
filled by appointment as authorized under subsection (1) of this 27
section for the duration of the unexpired term. 28
(3) The oversight committee: 29
(a) Shall oversee and review the commission's activities and 30
performance related to the program, including the commission's 31
creation and administration of one or more special purpose credit 32
programs authorized in RCW 43.181.040; 33
(b) Shall work with the department of financial institutions to 34
convene meetings, create a charter and operating procedures, and to 35
coordinate the oversight committee's ongoing activities;36
(c) Shall convene the initial meeting of the oversight committee 37
and select a chair by October 1, 2023; 38
(d) Shall work with the department of financial institutions to 39
convene a meeting at least once a quarter and may hold additional 40
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meetings at the call of the chair or by a majority vote of the 1
members of the committee; 2
(e) May conduct its meetings by conference telephone call, 3
videoconference, or using similar technology that enables all persons 4
participating in the meeting to hear each other at the same time; and5
(f) May, from time to time, make recommendations to the 6
appropriate committees of the legislature regarding the program.7
(4)(a) The oversight committee is a class one group under RCW 8
43.03.220. Except as provided in (b) of this subsection, members of 9
the committee receive no compensation for their services as members 10
of the committee but may be reimbursed for travel and other expenses 11
in accordance with rules adopted by the office of financial 12
management. 13
(b) As authorized by RCW 43.03.220, the department of financial 14
institutions may provide a stipend to individuals who are low income 15
or have lived experience to support their participation on the 16
oversight committee. 17
(5)(a) The department of commerce and the commission shall work 18
together to supply the oversight committee and the department of 19
financial institutions with any information requested by the 20
oversight committee or the department of financial institutions that 21
the oversight committee or the department of financial institutions 22
deems necessary for the committee to carry out its duties under this 23
section. This information may include, but is not limited to, books, 24
accounts, records, policies, procedures, files, and information from 25
relevant third parties. 26
(b) Any information shared among the oversight committee, the 27
department of financial institutions, the department of commerce, and 28
the commission that is confidential and exempt from public disclosure 29
under RCW 42.56.270 shall remain confidential when received by the 30
receiving party. 31
(6) The department of commerce and the commission must report to 32
the oversight committee on a quarterly basis. The report must address 33
the results of targeted education, homeownership counseling, and 34
outreach efforts by the department of commerce as authorized under 35
this chapter, and the results of any special purpose credit program 36
formed by the commission under this chapter, and down payment and 37
closing cost assistance to program participants. 38
(7)(a) The department of financial institutions shall:39
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(i) Provide subject matter expertise, administrative assistance, 1
and staff support to the oversight committee; and 2
(ii) Work in coordination with the department of commerce and the 3
commission to conduct outreach and financial education to the 4
communities served by this chapter, in accordance with RCW 5
43.320.150. 6
(b) The department of financial institutions may:7
(i) Have one or more staff present at oversight committee 8
meetings; 9
(ii) Employ staff necessary to carry out the purposes of this 10
section; and 11
(iii) Hire outside experts and other professionals it deems 12
necessary to carry out its duties under this section.13
(8) The department of commerce shall reimburse the department of 14
financial institutions for costs related to the oversight committee 15
from the moneys that the legislature appropriates to the department 16
of commerce for this purpose from the covenant homeownership account 17
under RCW 43.181.020(1). 18
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