Down payment assistance

AN ACT Relating to prohibiting homebuyers from receiving multiple 1
state-funded down payment assistance loans or grants; amending RCW 2
43.79.567, 43.185A.140, and 43.181.040; and creating a new section.3
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:4
NEW SECTION. Sec. 1. (1) The legislature finds that 5
homeownership is a cornerstone of economic stability, family 6
security, and generational wealth. State-funded down payment 7
assistance programs exist to open the door to homeownership for 8
individuals and families who might not otherwise have that 9
opportunity. These programs are funded with limited public dollars, 10
and their success depends on ensuring that assistance is distributed 11
fairly, transparently, and in a manner that reaches as many qualified 12
first-time homebuyers as possible.13
(2) The legislature further finds that in recent years, instances 14
of "stacking" multiple state-funded down payment assistance programs 15
have reduced the overall reach of these investments. While each 16
program was created with good intentions, they were not designed to 17
provide multiple overlapping assistance to a single buyer. When one 18
homebuyer receives more assistance than needed to successfully 19
purchase a home, another family waiting for help is left without a 20
path forward. 21
S-3689.1
SENATE BILL 6167
State of Washington 69th Legislature 2026 Regular Session
By Senators Goehner and Gildon
p. 1 SB 6167
(3) It is the intent of the legislature to reaffirm the original 1
purpose of these programs: To expand access to homeownership, not 2
concentrate benefits. By limiting homebuyers to one state-funded down 3
payment assistance loan or grant, the state can responsibly stretch 4
limited resources, support a greater number of first-time homebuyers, 5
and uphold the public's trust in the integrity of these programs.6
Sec. 2. RCW 43.79.567 and 2025 c 424 s 952 are each amended to 7
read as follows: 8
(1) The community reinvestment account is created in the state 9
treasury. Revenues to the account shall consist of appropriations and 10
transfers by the legislature and all other moneys directed for 11
deposit into the account. Moneys in the account may be spent only 12
after appropriation. 13
(2) Expenditures from the account may be used by the department 14
of commerce for: 15
(a) Economic development, which includes addressing wealth 16
disparities to promote asset building such as homeownership and 17
expanding access to financial resources including, but not limited 18
to, grants and loans for small businesses and entrepreneurs, 19
financial literacy training, and other small business training and 20
support activities. However, a homebuyer is prohibited from receiving 21
multiple state-funded down payment assistance loans or grants from 22
any programs created under this section or RCW 43.185A.140 or 23
43.181.040. A homebuyer who applies for down payment assistance loans 24
or grants under multiple state-funded programs, or for multiple down 25
payment assistance loans or grants under one state-funded program, is 26
only eligible to accept one state-funded loan or grant offer;27
(b) Civil and criminal legal assistance to provide postconviction 28
relief and case assistance, including the expungement of criminal 29
records and vacation of criminal convictions; 30
(c) Community-based violence intervention and prevention 31
services, which may include after-school programs focused on 32
providing education and mentorship to youths; 33
(d) Reentry services to facilitate successful transitions for 34
persons formerly incarcerated in an adult correctional facility or 35
juvenile residential facility in Washington; and 36
(e) Beginning July 1, 2025, agricultural and economic support and 37
services available to historically marginalized communities.38
p. 2 SB 6167
(3) The distribution of the grants under this section must be 1
done in collaboration with "by and for community organizations" as 2
defined by the department of commerce and the office of equity. For 3
the 2025-2027 fiscal biennium, "by and for community organizations" 4
include, but are not limited to, those operated by and for Black, 5
Latino, Native American, Asian, Native Hawaiian, and Pacific Islander 6
communities. 7
Sec. 3. RCW 43.185A.140 and 2023 c 275 s 3 are each amended to 8
read as follows: 9
(1) The department must use moneys from the housing trust fund 10
and other legislative appropriations to finance in whole or in part 11
any loan or grant projects that will provide affordable housing for 12
persons and families with special housing needs and who are low-13
income households. 14
(2) At least thirty percent of these moneys used in any given 15
funding cycle must be for the benefit of projects located in rural 16
areas of the state as defined by the department. If the department 17
determines that it has not received an adequate number of suitable 18
applications for rural projects during any given funding cycle, the 19
department may allocate unused moneys for projects in nonrural areas 20
of the state. 21
(3) The department must prioritize allocating at least, but not 22
limited to, 10 percent of these moneys used in any given funding 23
cycle to organizations that serve and are substantially governed by 24
individuals disproportionately impacted by homelessness, including 25
black, indigenous, and other people of color and, lesbian, gay, 26
bisexual, queer, transgender, and other gender-diverse individuals.27
(4) Activities eligible for assistance from the housing trust 28
fund and other legislative appropriations include, but are not 29
limited to: 30
(a) New construction, rehabilitation, or acquisition of low and 31
very low-income housing units; 32
(b) Preconstruction technical assistance, design and finance 33
services and consultation, and administrative costs for eligible 34
nonprofit community or neighborhood-based organizations;35
(c) Administrative costs for housing assistance groups or 36
organizations when such grant or loan will substantially increase the 37
recipient's access to housing funds other than those available under 38
this chapter; 39
p. 3 SB 6167
(d) Shelters for the homeless, including emergency shelters and 1
overnight youth shelters; 2
(e) Down payment or closing costs assistance for low-income 3
first-time homebuyers . However, a homebuyer is prohibited from 4
receiving multiple state-funded down payment assistance loans or 5
grants from any programs created under this section or RCW 43.79.567 6
or 43.181.040. A homebuyer who applies for down payment assistance 7
loans or grants under multiple state-funded programs, or for multiple 8
down payment assistance loans or grants under one state-funded 9
program, is only eligible to accept one state-funded loan or grant 10
offer; 11
(f) Acquisition of housing units for the purpose of preservation 12
as low-income housing; 13
(g) Projects making affordable housing projects more accessible 14
to low-income households with members who have disabilities; and15
(h) Remodeling and improvements as required to meet building 16
code, licensing requirements, or legal operations to residential 17
properties owned and operated by an entity eligible under RCW 18
43.185A.040, which were transferred as described in RCW 19
82.45.010(3)(t) by the parent of a child with developmental 20
disabilities. 21
(5)(a) Legislative appropriations from capital bond proceeds may 22
be used for the costs of projects authorized under subsection (4) of 23
this section, except for costs of subsection (4)(c) of this section.24
(b) The department may use up to three percent of the 25
appropriations from capital bond proceeds or other new appropriations 26
for affordable housing investments for administrative costs 27
associated with application, distribution, and project development 28
activities of the affordable housing program. 29
(c) Reappropriations must not be included in the calculation of 30
the annual funds available for determining the administrative costs.31
(6)(a) Moneys received from repayment of housing trust fund loans 32
or other affordable housing appropriations may be used for all 33
activities necessary for the proper functioning of the affordable 34
housing program, including, but not limited to, providing 35
preservation funding, as provided in RCW 43.185A.180, and 36
preconstruction technical assistance as provided in RCW 43.185A.170.37
(b) Administrative costs associated with compliance and 38
monitoring activities of the department may not exceed four-tenths of 39
p. 4 SB 6167
one percent annually of the contracted amount of state investment in 1
affordable housing programs. 2
Sec. 4. RCW 43.181.040 and 2025 c 143 s 1 are each amended to 3
read as follows: 4
(1) As part of the covenant homeownership program, the department 5
shall contract with the commission to design, develop, implement, and 6
evaluate one or more special purpose credit programs to reduce racial 7
disparities in homeownership in the state by providing down payment 8
and closing cost assistance. The contract must authorize the 9
commission to use the contract funding as follows:10
(a) The contract must authorize the commission to use up to one 11
percent of the contract funding for costs related to administering 12
the program including, but not limited to, costs related to 13
completing a covenant homeownership program study required under RCW 14
43.181.030, and other administrative, data collection, and reporting 15
costs; 16
(b) The contract must authorize the commission to use up to one 17
percent of the contract funding to provide targeted education, 18
homeownership counseling, and outreach about special purpose credit 19
programs created under this section to black, indigenous, and people 20
of color and other historically marginalized communities in 21
Washington state, including outreach to relevant affinity groups for 22
mortgage lenders; and 23
(c) The contract must authorize the commission to use the 24
remainder of the contract funding to provide down payment and closing 25
cost assistance to program participants. This portion of the contract 26
funding may not be used to provide any type of assistance other than 27
down payment and closing cost assistance. 28
(2) The commission shall create one or more special purpose 29
credit programs to provide down payment and closing cost assistance 30
for the benefit of one or more economically disadvantaged classes of 31
persons identified in a covenant homeownership program study under 32
RCW 43.181.030. In creating a special purpose credit program, the 33
commission must consider the evidence-based documentation and 34
programmatic and policy recommendations set forth in the initial 35
covenant homeownership program study and any subsequent program 36
studies. If the covenant homeownership program study identifies an 37
economically disadvantaged class or classes of persons that share one 38
or more common characteristics such as, race, national origin, or sex 39
p. 5 SB 6167
and the board of the commission finds it necessary to consider this 1
information in tailoring a special purpose credit program to provide 2
credit assistance to economically disadvantaged classes of persons, 3
the commission may consider these characteristics in designing and 4
implementing the program. 5
(3) At minimum, a special purpose credit program authorized under 6
this section must: 7
(a) Provide loans for down payment and closing cost assistance to 8
program participants that can be combined with other forms of down 9
payment and closing cost assistance . However, a homebuyer is 10
prohibited from receiving multiple state-funded down payment 11
assistance loans or grants from any programs created under this 12
section or RCW 43.79.567 or 43.185A.140. A homebuyer who applies for 13
down payment assistance loans or grants under multiple state-funded 14
programs, or for multiple down payment assistance loans or grants 15
under one state-funded program, is only eligible to accept one state-16
funded loan or grant offer; 17
(b)(i) Except as provided in (b)(ii) of this subsection, require 18
a program participant to repay loans for down payment and closing 19
cost assistance at the time that the house is sold;20
(ii) For a program participant who has a household income at or 21
below 80 percent of the area median income for the county where the 22
home is located at the time that the loan is made, a special purpose 23
credit program authorized under this section may fully forgive a loan 24
entered into at any time after enactment of the special purpose 25
credit program once the loan has been outstanding for at least five 26
years; and 27
(c) Be implemented in conjunction with the commission's housing 28
finance programs. 29
(4) To be eligible to receive down payment and closing cost 30
assistance through a special purpose credit program authorized under 31
this section, a special purpose credit program applicant must:32
(a) Have a household income at or below 120 percent of the area 33
median income for the county where the home is located;34
(b) Be a first-time homebuyer; and 35
(c)(i) Be a Washington state resident who: 36
(A) Was a Washington state resident on or before the enactment of 37
the federal fair housing act (Title VIII of the civil rights act of 38
1968; P.L. 90–284; 82 Stat. 73) on April 11, 1968, and was or would 39
have been excluded from homeownership in Washington state by a 40
p. 6 SB 6167
racially restrictive real estate covenant on or before April 11, 1
1968; or 2
(B) Is a descendant of a person who meets the criteria in 3
(c)(i)(A) of this subsection; 4
(ii) Records that show a person's address on or about a specific 5
date or include a reference indicating that a person is a resident of 6
a specific city or area on or about a specific date may be used to 7
provide proof that a person satisfies the criteria in (c)(i) of this 8
subsection, such as genealogical records, vital records, church 9
records, military records, probate records, public records, census 10
data, newspaper clippings, and other similar documents.11
(5) The commission may adopt rules, and shall adopt program 12
policies, as necessary to implement this section. Program rules or 13
policies must include procedures and standards for extending credit 14
under the special purpose credit program, including program 15
eligibility requirements. From time to time, including in response to 16
a covenant homeownership program study's evaluation of program 17
efficacy, the board of the commission may amend the special purpose 18
credit programs, rules, and policies. 19
(6) By July 1, 2024, one or more of the special purpose credit 20
programs must begin providing down payment and closing cost 21
assistance to program participants. 22
(7) By December 31, 2025, and by each following December 31st, 23
and in compliance with RCW 43.01.036, the commission shall submit an 24
annual report to the appropriate committees of the legislature on the 25
progress of the special purpose credit program or programs developed 26
under this section. The report shall include, at minimum, the program 27
eligibility requirements, the type and amount of down payment and 28
closing cost assistance provided to program participants, the number 29
of program participants and their corresponding eligibility 30
categories, the location of property financed, and program outreach 31
efforts. The report must be posted on the commission's website.32
--- END ---
p. 7 SB 6167