If saving for a down payment has been a challenge, consider the state bond program offered through Washington State Housing Finance Commission (WSHFC). These loans are funded through Mortgage Revenue Bonds and are funded by state or through Housing Funding Agencies for first time homebuyers (haven’t owned a home in the past three years). It’s a great way to leverage yourself into a home with virtually nothing out of pocket (we recommend saving for earnest money which can be returned to you in full at time of closing).
The loan amount is up to 4% of the total loan amount and open to all counties in the state of Washington. It can be used in conjunction with Conventional, FHA, USDA, and VA loans.
The loan is considered a second mortgage, has a zero interest rate, payments are deferred for 30 years and do not accumulate to principal. Basically, there is no payment for the loan. If you own the home for the life of the loan, it is forgiven. If you sell your home prior to loan maturation, refinance, or convert it to a rental, the loan becomes due and payable.
The maximum household income limitation is $145,000. Income from any household member count toward the limitation. Borrowers must attend a homebuyer education class. It is free and there are many site locations for attendance. Classes are normally five hours in length and very educational. Another option is an on-line class with a cost of $50. The class must be taken before you can lock your interest rate for your loan.
My team has loan officers who are certified with the state to provide classes and administer the loans. We can answer many of your questions about how the process works and its benefits to you in the long run. Reach out to me with questions!