Washington's Covenant Homeownership Program for Seattle Buyers

The Covenant Homeownership Program Seattle buyers can use is a Washington State Housing Finance Commission down payment and closing cost loan for first-time buyers whose own family history in Washington goes back before April 11, 1968. It can lend up to 20 percent of the price, capped at $150,000, plus customary closing costs, at 0 percent interest with no monthly payment. The household income limit for a King County purchase is $197,300, and some loans are forgiven after five years. Since April 2026, the lender has to get you onto the Commission's pre-reservation list before you go under contract.

None of the three assistance guides on this site mentioned the program until today, and it is the largest single source of down payment help a qualifying Seattle buyer can reach. It is also the program with the most rules about order: documents first, then a waiting list, then house hunting, then the offer. Buyers who learn about it after mutual acceptance often find it is too late for that house.

For this page I read, on October 26, 2026, the Commission's Covenant program page and Covenant FAQs at heretohome.org, its lender FAQs on the pre-reservation process, the Covenant Homeownership Downpayment Assistance Program lender manual dated June 8, 2026, the Commission's loan forgiveness income threshold chart for loans closed on or after June 8, 2026, its downpayment assistance program page, the Commission's June 26, 2026 letter to lending partners, its CHP Impact Report for July 2024 through December 2025, and the 2025 amending law, Second Substitute House Bill 1696 (Chapter 143, Laws of 2025). Where the Commission's own words matter, I quote them. I describe the program here; the Commission decides who is eligible.

What the Covenant Homeownership Program Means for Seattle Buyers

The Washington Legislature passed the Covenant Homeownership Act in 2023. The Commission's page explains that the act "created a new program and funding source to help people become homeowners who have been impacted by state-sanctioned racial discrimination in housing." The name refers to racially restrictive covenants, the deed clauses used across Washington to keep people out of neighborhoods by race or religion. The Commission notes that nearly 50,000 have been documented across Washington by the Racial Restrictive Covenants Project of the University of Washington and Eastern Washington University.

Three pieces sit under the name:

• The funding. Since January 2024 the state has collected a $100 document recording assessment on real estate transactions, which goes into a dedicated Covenant Homeownership Account.
• The study. The National Fair Housing Alliance completed the Covenant Homeownership Program Study in March 2024. It documented the state's role in housing discrimination and the homeownership gaps that remain, and its findings set who the program serves.
• The program. The Commission built it as a special purpose credit program, a structure that federal fair lending law (the Equal Credit Opportunity Act) allows for credit designed to serve an economically disadvantaged group. It launched in July 2024.

It is a loan, not a grant. The lender manual says so in its first line under the program terms: "This program is a downpayment assistance loan program (not a grant)." The Commission's impact report counts 1,087 homes bought with it from July 2024 through December 2025, 343 of them in King County, with an average Covenant loan of $109,720.

One 2026 development worth knowing: in a June 26, 2026 letter to its lending partners, the Commission addressed changes to Regulation B under the Equal Credit Opportunity Act affecting special purpose credit programs run by for-profit organizations. It wrote that the new rule "does not impact special purpose credit programs operated by nonprofits and governments" and that it "intends to continue to provide the Covenant Homeownership Program." The program was open and lending when I checked on October 26.

Who Qualifies for the Covenant Homeownership Program in Seattle

The Commission's FAQ lists the eligibility criteria that apply "at a minimum." I am restating them in its terms rather than paraphrasing loosely:

• Income. Household income at or below 120 percent of area median income for the county where you buy. For King County, the limit effective June 8, 2026 is $197,300. The Commission measures this with the income the underwriter uses to qualify you ("Credit Underwriting Income"), as shown on the automated underwriting findings and underwriting approval.
• First-time buyer. Both the borrower and spouse must be first-time buyers as the act defines it. The core test is no ownership of a principal residence in the three years before the purchase, and the manual counts any residential property, owner-occupied or not, and ownership through an LLC, partnership or corporation. The act also counts a single parent who only owned a home with a former spouse while married, a displaced homemaker who only owned with a spouse, someone who only owned a home not on a permanent foundation, and someone who only owned a property a licensed building inspector found uninhabitable. A non-borrowing spouse has to meet the test too.
• Family history in Washington before April 1968. You, or your parent or grandparent, lived in Washington before April 11, 1968, the date the federal Fair Housing Act was enacted. The Commission's homebuyer FAQ also names great-grandparents; the statute itself says "a descendant." The manual explains that April 1968 is when the state "no longer had an official or legal role" in enforcing housing discrimination.
• The person who lived here before 1968 must be in a group the study identified. The Commission lists them as Black, Hispanic, Native American/Alaska Native, Native Hawaiian or other Pacific Islander, Korean, or Asian Indian.
• Washington residency now. The manual requires every buyer to be a Washington resident at application and at purchase, shown by a Washington driver's license or state ID, and lets the Commission ask for up to 12 months of proof.

Program requirements beyond eligibility: you must take a Commission-sponsored homebuyer education class (every borrower on the note), get a home inspection, and live in the home as your principal residence. Adopted children born after 1968 can qualify through adoptive parents, with documentation of the link. The Commission's FAQ explains that the groups are narrowly tailored on two tests from the study: past discrimination by state institutions and lower homeownership rates today.

If you do not meet the Covenant criteria, the Commission's FAQ points to its other assistance programs, which "most homebuyers who earn under $215,000 a year can access." My Washington down payment assistance guide walks through them.

Family History Documents for the Covenant Homeownership Program Seattle File

In a Covenant Homeownership Program Seattle file, this is the part that takes the longest, and it is the part to start first. The act lets residency be shown with records that place a person at an address, or in a city or area, on or about a date. The Commission says it "intends to be as flexible as possible" and lists examples:

• Birth, death and marriage certificates
• School, church, employer and military records (including a DD214)
• Probate records, census data, obituaries and newspaper clippings
• Tribal membership records, draft cards, Social Security claims and applications
• Genealogical records from reliable sources and historical society records

The documents have to show three things for the person who lived here before 1968: Washington residency, race or ethnicity, and, if that person is a parent or grandparent, the family relationship to you. The manual adds limits worth knowing before you gather anything: "DNA tests, attestations and photographs alone are not adequate documentation," and a photo cannot be used to document race. The file also includes a brief statement describing the family's experience of housing discrimination, a letter explaining the family history, and the Commission's Covenant eligibility checklist.

Where to look: the Commission names the Washington State Department of Health vital records office, VA military service records, Legacy Washington, FamilySearch, and Ancestry.com (often free through a library). The Seattle Public Library and the King County Library System both appear on its list, which is a practical first stop for a Seattle family. Unclear documents go to an internal Commission committee.

How Much the Covenant Homeownership Program Seattle Loan Can Be

The lender manual sets the terms:

• Amount: up to 20 percent of the purchase price or appraised value, whichever is less, not to exceed $150,000, plus applicable and customary closing costs paid by the buyer. The manual's own example: on a $400,000 price with $12,000 of closing costs, the maximum is $92,000.
• Rate and payment: "0% simple interest, payment deferred." No monthly payment on the Covenant loan.
• When it is due: at sale, transfer, refinance, payoff of the first mortgage, when you stop living in the home as your primary residence, or at 30 years, whichever comes first. On a refinance, the Covenant loan can stay in place behind the new loan only if you refinance into the Commission's Home Advantage program.
• Sized to need: the Commission uses a Covenant Needs Assessment Form. If your housing payment would come in under 25 percent of your income, the underwriter reduces the Covenant amount until it reaches that level.
• No asset test and no required cash. The manual says there is no assessment of your assets, you may use your own money alongside it, and you are not required to put in your own cash to close.
• No purchase price limit, unless you pair it with House Key Opportunity or certain specialty programs, which carry their own caps.
• Not assumable, with one exception: on the buyer's death, a qualifying descendant who meets the program rules may assume it if the first mortgage is assumable too.

Property types: one-unit homes, attached and detached, condos, PUDs and manufactured homes on a permanent foundation, plus duplexes, as long as the first mortgage program accepts them. Triplexes and fourplexes are not allowed. The Commission's FAQ says the program can only be used to buy an existing home, not to build on land you own or to remodel. For an FHA loan on a condo, the manual allows single-unit approval under FHA rules, which my FHA condo approval guide explains.

Covenant Homeownership Program Seattle Loan Forgiveness

The 2025 amendment, HB 1696, effective July 27, 2025, let the Commission fully forgive a Covenant loan for a buyer with household income at or below 80 percent of area median income for the county "at the time that the loan is made," once the loan has been outstanding at least five years. The Commission applies it to earlier buyers too.

For loans closed on or after June 8, 2026, the Commission's King County forgiveness threshold is $116,650. All of these must be true for forgiveness, per the Commission's FAQ and manual:

• Your income was at or below the threshold when the loan was bought, based on the signed underwriting approval. Only income at purchase counts.
• The Commission and its servicer still hold the loan five years and one month after closing. If it is not in the Commission's portfolio then, forgiveness is "null and void."
• The borrower who met the family history requirement still lives in the home as a principal residence.
• The first mortgage is in good standing. If it is delinquent, forgiveness waits until it is current.
• The owner is a borrower on the original loan, or inherited the home on the original borrower's death and is a descendant or immediate family member, including a spouse.

The Commission notifies a potentially eligible borrower in writing within a year of purchase. Its manual is blunt that lenders "should not and will not be able to provide the borrowers with a prediction" of forgiveness, so I will not, and forgiveness covers only the Covenant loan, never the first mortgage. Whether forgiveness has tax consequences for you is a question for your CPA.

The Covenant Homeownership Program Seattle Pre-Reservation List

Demand has outrun the monthly funding. The Commission says the program "is safe and continues to receive funding each month," and in its lender FAQ that "every eligible borrower will ultimately receive assistance," but funds "may not always be available within the desired timeframe." Since April 20, 2026, every Covenant loan goes through a pre-reservation process:

1. The lender uploads your file to the Commission: the loan application, an underwriting approval (Form 1008) signed by the lender's underwriter, your family history documents with the eligibility checklist, and a homebuyer education certificate for every borrower on the note and deed of trust. Submitting does not lock a rate.
2. The Commission reviews it. Once accepted, you are placed on the pre-reservation list in order of acceptance. An incomplete family history can be submitted, but you are not added until it is accepted.
3. You wait for written authorization. When funds are available, the Commission emails you and the lender. You both have to acknowledge it within three business days, or the next buyer is contacted.
4. You have 30 days to find a home, go under contract, and have the lender reserve Covenant funds.

The Commission's instruction to lenders is plain: do not go under contract before authorization. Covenant loans "can only be reserved after the homebuyer is authorized in writing to go under contract," and the Commission adds that there are no exceptions. If you make a legitimate offer that is rejected, or a transaction falls through, the lender can request an additional 30 days. If you do not get under contract in time, or are not ready when your turn comes, you go to the end of the list. The Commission says it cannot yet estimate how long the wait is.

For a Covenant Homeownership Program Seattle search, that changes the order of things. Have your broker in the loop early, tour and learn the neighborhoods while you wait, and be ready to write offers in the 30-day window. My step-by-step guide to getting a mortgage in Seattle covers the pre-approval side.

The First Mortgage a Covenant Loan Pairs With

The Covenant loan is a second mortgage behind a Commission first mortgage. The Commission's assistance page says it combines with its Home Advantage or House Key Opportunity first-mortgage programs, and the manual adds a Covenant first mortgage that follows Home Advantage underwriting except for income. Under those programs the first mortgage itself can be a conventional loan or a government loan; the Commission's FAQ names FHA, HUD 184, VA and USDA.

Which loan type fits depends on the rest of your file. A buyer using a large Covenant loan may be putting 20 percent down, which changes the math between a conventional low-down-payment loan and an FHA loan, and a veteran may look at a VA loan. Your debt-to-income ratio still has to work on the first mortgage; my DTI guide explains how lenders measure it.

You reach the program through a loan officer the Commission has trained, at a lending company it approves. Movement Mortgage appears on the Commission's partner lender list. The Commission also requires loan officers to complete its Advanced Downpayment Assistance training, which covers Covenant, before originating it, so ask any loan officer you talk to, me included, to confirm it. The Commission's FAQ notes that the loan officer and lender are paid on the first mortgage amount, not on the down payment assistance.

Layering Covenant With Other Seattle Assistance

The Commission's FAQ says you can combine the Covenant program with your own savings, family gifts, or other assistance you are eligible for. The manual allows another Commission down payment program on top when the first mortgage is Home Advantage or House Key, and outside Community Second programs as well, each with "further restrictions."

On a Covenant Homeownership Program Seattle purchase, the Covenant loan alone can cover a 20 percent down payment plus customary closing costs, so layering matters most where 20 percent of the price runs past the $150,000 cap, roughly above $750,000. The other Commission programs and the City of Seattle's own assistance are in my Washington down payment assistance guide, my King County home loan programs guide and my Washington State home loan programs overview. If you are buying your first home in my home neighborhood, my Eastlake first-time buyer guide has the local picture.

An Illustrative Covenant Homeownership Program Seattle Purchase

Two illustrative households, using the King County figures in effect October 26, 2026. No interest rate is used, and these are not quotes or approvals.

A Capitol Hill condo. A buyer with household income of $110,000, under both the $197,300 program limit and the $116,650 forgiveness threshold, is accepted onto the list and authorized to shop. They go under contract on a $575,000 condo with $14,000 of closing costs. Twenty percent of the price is $115,000, so the Covenant maximum is $129,000, subject to the appraisal, the needs assessment and the condo's eligibility for the first mortgage. If everything holds, the first mortgage would be $460,000, there is no monthly payment on the Covenant loan, and the loan is a candidate for forgiveness after five years and one month if every forgiveness condition is met then.

A Wallingford house. A couple with household income of $165,000 buys an $850,000 house. Twenty percent would be $170,000, so the $150,000 cap applies, plus their customary closing costs. Their income is under the program limit but over the forgiveness threshold, so the Covenant loan is repaid, at 0 percent interest, when they sell, refinance outside Home Advantage, stop living there, or reach 30 years.

Covenant Homeownership Program Seattle: Getting Started Checklist

• Call the Washington State Homeownership Hotline, 1-877-894-4663 (run by the nonprofit Washington Homeownership Resource Center), or talk to a Commission-trained loan officer.
• Start the family history search: the pre-1968 Washington resident, their race or ethnicity, and their relationship to you.
• Take a Commission-sponsored homebuyer education class. Every borrower on the note needs the certificate.
• Get a full pre-approval with an underwriter-signed approval, not just a prequalification letter.
• Have the lender upload the package for pre-reservation. Do not go under contract yet.
• When authorization arrives, acknowledge it within three business days and plan to be under contract within 30 days.
• Budget for the home inspection, which the program requires.

FAQ: Covenant Homeownership Program Seattle