Homeownership revolving loan

AN ACT Relating to creating the affordable homeownership 1
revolving loan fund program; and adding a new chapter to Title 43 2
RCW. 3
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:4
NEW SECTION. Sec. 1. The definitions in this section apply 5
throughout this chapter unless the context clearly requires 6
otherwise.7
(1) "Commission" means the Washington state housing finance 8
commission. 9
(2) "Department" means the department of commerce.10
(3) "Eligible organizations" mean nonprofit developers building 11
permanently affordable homeownership for sale to low-income 12
households. 13
(4) "Low-income household" means a single person, family, or 14
unrelated persons living together whose adjusted income does not 15
exceed 80 percent of the median family income adjusted for family 16
size, for the county or the metropolitan area where the affordable 17
housing is located, as reported by the United States department of 18
housing and urban development, whichever is larger.19
H-0994.1
HOUSE BILL 1808
State of Washington 69th Legislature 2025 Regular Session
By Representatives Zahn, Low, Parshley, Thomas, Scott, Ramel,
Gregerson, Doglio, Eslick, Reed, Fosse, Ormsby, Nance, Salahuddin,
Macri, Hill, Street, and Obras
Read first time 02/03/25. Referred to Committee on Housing.
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(5) "Permanently affordable homeownership" means homeownership 1
that, in addition to meeting the definition of "affordable housing" 2
in RCW 43.185A.010, is: 3
(a) Sponsored by a nonprofit organization or governmental entity 4
and the sponsor organization: 5
(i) Executes a new ground lease or deed restriction with a 6
duration of at least 99 years at the initial sale and with each 7
successive sale; and 8
(ii) Supports homeowners and enforces the ground lease or deed 9
restriction; and 10
(b) Subject to a ground lease or deed restriction that includes:11
(i) A resale restriction designed to provide affordability for 12
future low-income and moderate-income homebuyers; 13
(ii) A right of first refusal for the sponsor organization to 14
purchase the home at resale; and 15
(iii) A requirement that the sponsor organization must approve 16
any refinancing, including home equity lines of credit.17
(6) "Program" means the affordable homeownership revolving loan 18
fund program created under sections 2 and 3 of this act.19
NEW SECTION. Sec. 2. The program is created in the department 20
to provide loans to eligible organizations to finance affordable 21
homeownership construction for low-income households. The department 22
shall contract with the commission to administer the program, subject 23
to the availability of amounts appropriated for the specific purposes 24
provided in this section.25
NEW SECTION. Sec. 3. Under the program, the commission may 26
administer loans to eligible organizations to assist with the 27
development of housing for low-income households subject to the 28
following considerations:29
(1) Loans must be awarded to eligible organizations based on 30
criteria established by the commission, including at least the 31
following: 32
(a) Readiness to proceed with construction, including possession 33
of necessary permits and completed land use entitlements;34
(b) Amount and commitment of capital being leveraged as part of 35
the financing for the project, including public funding;36
(c) Proposed cost efficiency; 37
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(d) Development location, with the goal of awarding funding to 1
projects in as many areas of the state as financially feasible and 2
viable; 3
(e) The applicant's qualifications and demonstrated capability to 4
develop the proposed project; and 5
(f) Any other criteria established by the commission, provided 6
that such criteria may not exceed the priority of any other criterion 7
listed in this subsection (1). 8
(2) Any housing financed under the program must serve low-income 9
households for at least 99 years; however, the commission, in 10
consultation with program awardees, may establish a longer time 11
period. 12
(3) Loans awarded under this section may not exceed 50 percent of 13
the total project costs of the housing to be developed. The 14
commission may exceed this maximum allowable loan amount for cause.15
(4) Loans awarded under this section may be used in combination 16
with private sector loans or any other source of capital as 17
recognized by the commission. 18
(5) The commission must structure loans issued pursuant to this 19
section with an interest rate above one percent, but not exceeding 20
2.5 percent. Repayment of loans administered under this section is 21
due after all of the homes included in the financed project are sold, 22
except as required by rules established by the commission.23
(6) Upon receipt and repayment, any interest earnings and repaid 24
loan funds must be tracked separately from other revenue and must be 25
reloaned to qualifying applicants to finance additional permanently 26
affordable homeownership under the program. 27
(7) All loans issued pursuant to this section must be assumable 28
under terms and conditions established by the commission.29
(8) Loan recipients must: 30
(a) Commit to beginning construction within 180 days of 31
contracting the loan; 32
(b) Adhere to the evergreen sustainable development standard 33
adopted by the department; 34
(c) File an annual compliance report containing information as 35
specified by the commission; and 36
(d) Restrict use of awarded loan funding to eligible costs of 37
housing as defined under RCW 43.180.020. 38
(9) The commission must: 39
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(a) Establish criteria and procedures for long-term monitoring of 1
housing affordability and compliance under the program. The 2
commission may charge monitoring fees; and 3
(b) Establish annual reporting requirements for loan recipients.4
(10) The commission shall adopt policies necessary to administer 5
the program established in this section and section 2 of this act.6
(11) No commission general funds shall be expended to implement 7
this program. 8
NEW SECTION. Sec. 4. Sections 1 through 3 of this act 9
constitute a new chapter in Title 43 RCW.10
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