In spring 2023, the Washington State Legislature passed the Covenant Homeownership Act with bipartisan support. The act creates a new program and funding source to help people who have been impacted by Washington’s history of housing discrimination become homeowners.

Eligibility is based on the mandates of the Covenant Homeownership Act and the recommendations of the Covenant Homeownership Program Study as follows: 

• You or a parent/grandparent lived in Washington state before 1968 
• That person is Black, Hispanic, Indigenous, or part of another racial group identified in the Covenant study 
• First-time homebuyer 
• You meet income guidelines: 
  • Up to 120% Area Median Income (AMI)

The Covenant Homeownership Act defines “first-time homebuyer” broadly. You may be eligible if:

• You have not owned a home within the past three years
• You are a single parent who has only owned a home while married to a former spouse.
• You are a displaced homemaker and have only owned a home with a spouse.
• You have only owned a residence that had no permanent foundation (such as a manufactured home)
• You only owned a property that was determined to be uninhabitable.

The Washington State Housing Finance Commission will publish a chart with this information annually. For the Covenant program, Area Median Income is based on the location of the home to be purchased. 

The Commission intends to be as flexible as possible in accepting documentation of race and pre-1968 residency in Washington. Again, the homebuyer must submit this documentation for the person who lived in Washington before 1968—whether that person is the homebuyer themselves or their parent/grandparent/great-grandparent. 

The Commission intends to be as flexible as possible in accepting documentation of race and pre-1968 residency in Washington. Again, the homebuyer must submit this documentation for the person who lived in Washington before 1968—whether that person is the homebuyer themselves or their parent/grandparent/great-grandparent.

Some examples of acceptable documents include:

• Birth & Death certificates
• School records
• Death certificates
• Church records
• Probate Records
• Newspaper clippings
• Marriage certificates
• Employer records
• Military records
• Genealogical records from reliable sources
• Tribal membership records
• Draft card
• Social Security Claims & Applications
• WA State Concealed Weapon License
• Census data
• Obituaries
• Historical Societies

Your lender and/or housing counselor will help you gather the documents. Some good sources include the following. The Commission will continue to add resources to this section.

• Vital Records Department of the state Department of Health
• Legacy Washington
• FamilySearch.org: Create a free account to search family records.
• Ancestry.com: This is a paid service, but you can often access Ancestry.com for free from your local library.
• Newspapers.com
• MyHeritage.com
• Public libraries:
  • Find your local library here.
  • Seattle Public Library
  • King County Library Research
  • Tacoma Public Library
  • Spokane Public Library Research

You can access this program by working with a Commission-trained lender to prequalify for a mortgage loan and establish your eligibility. The Washington State Homeownership Hotline at 1-877-894-4663 is also a great way to easily connect to the Covenant Homeownership Program, as well as other free support, guidance and financial help.

The hotline will help you reach the next step based on your situation, goals and preferences. If you are not quite ready for a mortgage, the hotline will connect you with free support and guidance to get on the path to your goal, no matter where you are today.

Loan forgiveness simply means that when you refinance, sell or pay off your home, the Covenant downpayment assistance loan does not need to be repaid, as it would otherwise. 

The forgiveness applies only to the downpayment assistance loan, not to the main mortgage on the property. 

If you are under 80% AMI when you buy your home, your loan will be forgiven after five years of owning your home. The forgiveness applies only to the downpayment assistance loan, not to the main mortgage on the property. 

The new law offers forgiveness of the Covenant downpayment assistance loan to homebuyers who: 

• Earned no more than 80% of Area Median Income at the time they bought their home; and 
• Still own their home five years after purchase. 
• Additional restrictions may apply; details will be published in the coming months.  

The Commission will post a chart with this information for 2024 and 2025 in the coming months, prior to the implementation of the new law. For the Covenant program, Area Median Income is based on the location of the home to be purchased. 

Within one year of loan closing, you will be notified in writing by the Commission and/or our loan servicer if forgiveness potentially applies to you.