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Washington State First Time Home Buyer

First Time Home Buyer Programs in Washington State
Mortgage Loan Options - Down Payment Assistance

Washington State First Time Home Buyer – 2020 Loan Programs

Are you a first time home buyer looking to purchase a home in Washington State?  On this page you can learn about the different types of mortgage programs that are available to first time home buyers.  You may also view the different down payment assistance programs that are currently being offered in Washington State.

Washington State First Time Home Buyer Loans

Below are some mortgage programs that are available to first time home buyers.

Types of Mortgages:

  • Conventional Loans – Conventional loans offer the best loan terms to borrowers with good or excellent credit, as well as those who can afford to place a larger down payment.  If you are able to put 20% or more down, you will be able to avoid paying private mortgage insurance (PMI).  However, conventional loans also offer low down payment options, such as programs that only require 3% down.
  • FHA Loans – FHA loans are a good option for borrowers who may not be able to qualify for a conventional loan.  The qualification requirements for FHA loans are much more lenient than conventional loans.  This includes options for home buyers with credit scores as low as 500 (in order to qualify for a 3.5% down payment, you must have a credit score of at least 580).
  • USDA Loans – USDA loans provide home buyers the opportunity to purchase a rural home without any down payment.  These loans are intended for borrowers with low-to-moderate income.  In addition to not requiring any money down, you can also finance the closing costs into the loan.  This means you can essentially buy a home with no money out of pocket!
  • VA Loans – Active duty military members and veterans can apply for a VA loan which allows you to buy your first home without any down payment.  These loans are not available to the general public, but exclusively to military/veterans.
  • Jumbo Loans – Any mortgage that does not meet the conforming loan limits is a jumbo loan.  You can lookup the 2020 conforming loan limits for your county using this conforming loan limits lookup tool.  If you want to buy a more expensive home, and have the income to qualify, jumbo lenders offer loan amounts up to $5,000,000.
  • Non-Prime Loans – If you do not qualify for any of the above types of loans, you may consider a non-prime or non-qm loan.  These programs are especially helpful to self-employed borrowers, and a variety of people with credit issues (such as low credit scores and/or a recent bankruptcy, foreclosure, or short sale).  Regardless of your situation, you may want to learn more about non-prime loans if you do not qualify for any of the other types of mortgages featured above.

These are some of the options that are available to first time home buyers.  If you would like to get pre-approved for a mortgage, we can help match you with a lender that offers first time home buyer loans in Washington State.

Click here to get pre-approved for a mortgage

 

Washington State Down Payment Assistance Programs

First time home buyers in Washington State may be eligible to receive down payment assistance.  This includes programs offered throughout the entire state, as well as several locally offered programs.  You can learn more about these programs below.  If you would like some help checking your eligibility for down payment assistance, please fill out this form.  We will match you with a mortgage lender that specializes in helping first time home buyers find down payment assistance.

WSHFC Home Advantage Program

By far the most popular program, which is offered throughout the entire state is the Home Advantage DPA offered through the Washington State Housing Financing Commission.  You may be able to receive up to 4% of the purchase price of the home you want to buy, which can be used for your down payment.  The funds are classified as a loan, but it is at 0% interest and deferred for 30 years.  You do not have to pay this money back until the home is sold or refinanced.

Program Requirements

  • The minimum credit score required to qualify is 620.
  • You meet the income limits, which are $145,000 statewide (meaning that your total household income does not exceed this amount).
  • The maximum DTI ratio allowed is 50%.
  • You must also attend a homebuyer education course through a certified provider.

You can learn more about the Home Advantage Program on the Washington State Housing Finance Commission website.

Seattle Down Payment Assistance 

First time home buyers in Seattle may be able to receive up to $55,000 in down payment assistance.  This is one of the most generous DPA programs in the entire country.

Program Requirements

  • The home must be within the city limits of Seattle.
  • You must be a first time home buyer.
  • The property may not exceed the maximum price allowed of $450,000.
  • You must complete a homebuyer education course.
  • The home must be a primary residence (no investment properties allowed).
  • Your income must be below 80% of the average median income for Seattle (the income limits are shown below).

Income Limits

  • 1 person: $61,800
  • 2 people: $70,600
  • 3 people: $79,450
  • 4 people: $88,250
  • 5 people: $95,350
  • 6 people: $102,400
  • 7 people: $109,450
  • 8 people: $116,500

You can learn more about the requirements and program details, on the official city of Seattle website.

Tacoma Down Payment Assistance 

First time home buyers in Tacoma may receive up to $20,000 in down payment assistance.  The funds are received as a deferred loan with a 4% simple interest rate, but monthly payments are not required.  The money only must be paid back once the home is sold, refinanced, or if you (the borrower) no longer resides at the home, and use it as your primary residence.

Program Requirements

  • You must be a first time home buyer
  • Purchasing a home within the city limits of Tacoma.
  • Attend a homebuyer education course.
  • Contribute $500 towards your down payment.
  • The maximum purchase price allowed is $254,000 for an existing home, and $329,000 for new construction.
  • Your household income must not exceed the income limits, which are outlined below.

Income Limits

  • 1 person: $41,800
  • 2 people: $47,800
  • 3 people: $53,750
  • 4 people: $59,700
  • 5 people: $64,500
  • 6 people: $69,300
  • 7 people: $71,750
  • 8 people: $72,300

You can learn more about this program on the City of Tacoma website.

Pierce County Down Payment Assistance

First time home buyers in Pierce County may receive up to $24,900 in down payment assistance.  The funds are provided as a 30 year loan with a 4% interest rate.  Monthly payment are not required.  The money only must be paid back when you sell the home, refinance, or no longer reside in the home, and use it as your primary residence.

Program Requirements

  • You must be a first time home buyer.
  • The home must be located in Pierce County (excluding the city limits of Tacoma, Lakewood, and Bonney Lake).
  • You must complete a homebuyer education course.
  • The maximum purchase price allowed is $313,500 for an existing home, and $417,995 for a newly constructed home.
  • Your household income must not exceed the income limits, which are outlined below.

Income Limits

  • 1 person: $44,950
  • 2 people: $51,350
  • 3 people: $57,750
  • 4 people: $64,150
  • 5 people: $69,300
  • 6 people: $74,350
  • 7 people: $79,550
  • 8 people: $84,700

You can learn more about this program on the official Pierce County website.

ARCH East King County Down Payment Assistance

First time home buyers in King County may receive up to $30,000 in down payment assistance.  The funds are provided as a 30 year loan with a 4% interest rate.  Monthly payment are not required.  The money only must be paid back when you sell the home, refinance, or no longer reside in the home, and use it as your primary residence.

Program Requirements

  • You do NOT need to be a first time home buyer.
  • It is required that you occupy the property as your primary residence.
  • The home must be located in Beaux Arts Village, Bellevue, Bothell, Clyde Hill, Hunts Point, Issaquah, Kenmore, Kirkland, Medina, Mercer Island, Newcastle, Redmond, Sammamish, Woodinville, or Yarrow Point.
  • The maximum purchase price for a new or existing home is $413,000.
  • Your household income must not exceed the income limits, which are outlined below.

Income Limits

  • 1 person: $61,800
  • 2 people: $70,600
  • 3 people: $79,450
  • 4 people: $88,250
  • 5 people: $95,350
  • 6 people: $102,400
  • 7 people: $108,600
  • 8 people: $108,600

You can learn more about this program on the ARCH East King County page of the WSHFC website.

Bellingham Down Payment Assistance

First time home buyers in Bellingham may receive up to $40,000 in down payment assistance.  The funds are provided as a 30 year loan with a 3% interest rate.  Monthly payment are not required.  The money only must be paid back when you sell the home, refinance, or no longer reside in the home, and use it as your primary residence.

Program Requirements

  • You must be a first time home buyer.
  • The home must be located within the city limits of Bellingham.
  • You must complete a homebuyer education course.
  • The maximum purchase price allowed is $360,050 ($234,413 for a condo).
  • Your household income must not exceed the income limits, which are outlined below.

Income Limits

  • 1 person: $44,350
  • 2 people: $50,650
  • 3 people: $57,000
  • 4 people: $63,300
  • 5 people: $68,400
  • 6 people: $73,450
  • 7 people: $78,500
  • 8 people: $83,600

You can learn more about this program on the Bellingham page of the WSHFC website.

Washington State First Time Home Buyer Tax Credits

The Mortgage Credit Certification (MCC) tax credit provides you an opportunity to reduce your tax bill, as well as enhance your home loan application by reducing your debt-to-income ratios.  How this works, is you can deduct up to $2,000 off your federal tax bill each year.  The MCC allows up to 35% of your annual interest to be eliminated (with the cap being at $2,000).  Some great news, is this can be used in addition to standard mortgage interest deductions!

Get Matched with a Mortgage Lender

A mortgage lender can help you determine what mortgage programs you may qualify for, and also check your eligibility for down payment assistance.  If you would like some help finding a mortgage lender, we can match you with a lender that offers first time home buyer loans in Washington State.

Click here to get matched with a mortgage lender

First Time Home Buyer Questions 

Below are some of the most frequently asked questions about first time home buyer loans:

How much do I need for a down payment?
The minimum down payment requirement will depend on the type of mortgage program.  USDA and VA loans do not require any down payment.  FHA loans only require a 3.5% down payment (and allow down payment assistance to be used).  Conventional loans typically require either 3% or 5% down.   The minimum down payment for a non-prime loan is usually at least 10% (or higher).

What is the maximum loan amount that I can qualify for?
The amount that you will be allowed to borrow will depend mostly on your income, as well as the particular type of loan you are interested in.  There are maximum loan limits for each type of mortgage program which are set at the county level.  Conforming loan limits are the maximum loan amounts allowed for conventional mortgages.  FHA loans have their own loan limits.  This is not necessarily how much you can borrow though, but the maximum amount allowed in your location.  The amount that you can personal qualify for will be based upon your income, and how much debt you have.  For most loans, your monthly mortgage payment, along with your monthly debts may not exceed 43% of your income.

Can I buy a home without a real estate agent?
It depends on your state and the type of loan program.  For some states, you must use an agent.  In other states, you are not required to use a real estate agent for many loan program, such as conventional mortgages.  However, some loan types require that you use a real estate agent regardless of your location, such as USDA loans.

Are there mortgage loan options for borrowers with bad credit?
Yes, both FHA loans and non-prime loans are available to borrowers with lower credit score, and other credit challenges.  The minimum credit score required for an FHA loan is 500.  For non-prime loans, there are lenders that allow a borrower to have a credit score even below 500.  Non-prime loans also do not have any waiting periods after a bankruptcy.

Can I buy a home if I owe tax debt?
For government-backed loans, such as FHA, VA, and USDA loans, you can buy a home with tax debt as long as you have made a payment plan with the IRS, and are not behind on the payments. Any federal debt must be in good standing in order to get a government-based mortgage. If your tax debts have moved into the status of a tax lien, this will prevent you from getting a home loan until it is resolved.

Can I buy a home if I have student loans?
As long as you are not delinquent on the student loan payments, and the monthly payments do not cause excessive debt-to-income ratios, you can still get a mortgage.

Can I buy a home without my spouse?
A common question is if you can buy a house without your wife or husband.  The short answer is yes. There are numerous reasons someone may want to exclude their spouse from a mortgage application, such as lower credit, lack of job history or income, or one spouse having excessive debt that could prevent an approval. You may be able to qualify and get a home loan without your spouse.

How do I find out if I qualify for a mortgage?
It is easy to find out what mortgage programs you may qualify for.  We can match you with lender that offers free consultations, and they can help you get pre-approved (and also compare what options may be available to you).  To have a mortgage lender contact you, request to be matched with a lender.

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Home Loan Programs Available In:

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