wa-law.org > bill > 2025-26 > HB 1808 > Original Bill

HB 1808 - Homeownership revolving loan

Source

Section 1

The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.

  1. "Commission" means the Washington state housing finance commission.

  2. "Department" means the department of commerce.

  3. "Eligible organizations" mean nonprofit developers building permanently affordable homeownership for sale to low-income households.

  4. "Low-income household" means a single person, family, or unrelated persons living together whose adjusted income does not exceed 80 percent of the median family income adjusted for family size, for the county or the metropolitan area where the affordable housing is located, as reported by the United States department of housing and urban development, whichever is larger.

  5. "Permanently affordable homeownership" means homeownership that, in addition to meeting the definition of "affordable housing" in RCW 43.185A.010, is:

    1. Sponsored by a nonprofit organization or governmental entity and the sponsor organization:

      1. Executes a new ground lease or deed restriction with a duration of at least 99 years at the initial sale and with each successive sale; and

      2. Supports homeowners and enforces the ground lease or deed restriction; and

    2. Subject to a ground lease or deed restriction that includes:

      1. A resale restriction designed to provide affordability for future low-income and moderate-income homebuyers;

      2. A right of first refusal for the sponsor organization to purchase the home at resale; and

      3. A requirement that the sponsor organization must approve any refinancing, including home equity lines of credit.

  6. "Program" means the affordable homeownership revolving loan fund program created under sections 2 and 3 of this act.

Section 2

The program is created in the department to provide loans to eligible organizations to finance affordable homeownership construction for low-income households. The department shall contract with the commission to administer the program, subject to the availability of amounts appropriated for the specific purposes provided in this section.

Section 3

Under the program, the commission may administer loans to eligible organizations to assist with the development of housing for low-income households subject to the following considerations:

  1. Loans must be awarded to eligible organizations based on criteria established by the commission, including at least the following:

    1. Readiness to proceed with construction, including possession of necessary permits and completed land use entitlements;

    2. Amount and commitment of capital being leveraged as part of the financing for the project, including public funding;

    3. Proposed cost efficiency;

    4. Development location, with the goal of awarding funding to projects in as many areas of the state as financially feasible and viable;

    5. The applicant's qualifications and demonstrated capability to develop the proposed project; and

    6. Any other criteria established by the commission, provided that such criteria may not exceed the priority of any other criterion listed in this subsection (1).

  2. Any housing financed under the program must serve low-income households for at least 99 years; however, the commission, in consultation with program awardees, may establish a longer time period.

  3. Loans awarded under this section may not exceed 50 percent of the total project costs of the housing to be developed. The commission may exceed this maximum allowable loan amount for cause.

  4. Loans awarded under this section may be used in combination with private sector loans or any other source of capital as recognized by the commission.

  5. The commission must structure loans issued pursuant to this section with an interest rate above one percent, but not exceeding 2.5 percent. Repayment of loans administered under this section is due after all of the homes included in the financed project are sold, except as required by rules established by the commission.

  6. Upon receipt and repayment, any interest earnings and repaid loan funds must be tracked separately from other revenue and must be reloaned to qualifying applicants to finance additional permanently affordable homeownership under the program.

  7. All loans issued pursuant to this section must be assumable under terms and conditions established by the commission.

  8. Loan recipients must:

    1. Commit to beginning construction within 180 days of contracting the loan;

    2. Adhere to the evergreen sustainable development standard adopted by the department;

    3. File an annual compliance report containing information as specified by the commission; and

    4. Restrict use of awarded loan funding to eligible costs of housing as defined under RCW 43.180.020.

  9. The commission must:

    1. Establish criteria and procedures for long-term monitoring of housing affordability and compliance under the program. The commission may charge monitoring fees; and

    2. Establish annual reporting requirements for loan recipients.

  10. The commission shall adopt policies necessary to administer the program established in this section and section 2 of this act.

  11. No commission general funds shall be expended to implement this program.


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