Financial Aid for Homebuyers: Seattle’s Downpayment Assistance Program
The Seattle Downpayment Assistance Program, a significant initiative by the Washington State Housing Finance Commission, offers a second mortgage loan program that works in tandem with the Home Advantage first mortgage loan program. This program is specifically designed for qualified borrowers purchasing homes within the city limits of Seattle, providing up to $45,000 in assistance. The loan features a deferred payment plan for 30 years at a 3 percent simple interest rate.
Utilization of Funds
The funds from this program can be used to cover both the down payment and closing costs associated with purchasing a home. Borrowers are required to contribute a minimum down payment of either 1 percent of the purchase price or $2,500, whichever is greater.
To be eligible for this program, there are several criteria that applicants must meet:
- A Shared Appreciation requirement is applicable for the first 9 years.
- Applicants must adhere to the following income limits based on household size:
- 1 person household: $48,550
- 2 person household: $55,450
- 3 person household: $62,400
- 4 person household: $69,300
- 5 person household: $74,850
- 6 person household: $80,400
- 7 person household: $85,950
- 8 person household: $90,300
- The purchase price limit for both new and existing constructions is set at $354,000.
- The home must not have been tenant-occupied within 90 days before the purchase and sale agreement.
- Borrowers must be first-time homebuyers, and the property being purchased should be their principal residence and owner-occupied.
- All borrowers are required to attend a free Homebuyer Education Seminar sponsored by the Washington State Housing Finance Commission and obtain a certificate. It is important to note that online Homebuyer Education does not fulfill this requirement.
Standards for Homebuyer Education Seminars
The seminars provided under this program are designed to ensure comprehensive and unbiased education for prospective homebuyers:
- Each seminar lasts at least five hours and covers all major aspects of the home-buying process.
- The presentations are conducted in an open and unbiased format.
- Approved training materials and handouts are utilized.
- The seminars are led by professionals who have completed the Commission’s instructor training.
- There are no direct marketing or sales presentations by the instructor or any guest speakers.
In summary, the Seattle Downpayment Assistance Program is a robust and well-structured initiative aimed at facilitating homeownership for first-time buyers in Seattle. By providing financial assistance, setting clear guidelines, and ensuring thorough educational support, the program plays a crucial role in helping individuals achieve their dream of owning a home.