What is the Home Advantage Program?
Owning a home is a dream for many, but the financial burden can be overwhelming—especially for First Time Home Buyers.
The Home Advantage Program is designed to assist homebuyers in Washington state by providing affordable mortgage options and Down Payment Assistance. This program is available to both first-time and repeat homebuyers. This makes the program a valuable tool for many people who do have the ability to save enough money for a down payment to buy a home.
The Home Advantage Program provides a competitive interest rate on a first mortgage loan that allows home buyers in Washington state to combine this loan with a Down Payment Assistance second mortgage. The Down Payment Assistance second mortgage can then be used to make the normal down payment that is required by the larger, first mortgage. There are several different options for the second mortgage.
Most of these Down Payment Assistance Programs do not require any monthly payment until you pay off the loan by either selling the home, refinancing the loan, or paying the loan balance to zero. Additionally, most of them have a much lower interest rate than a typical loan, somewhere between 0 percent and 4 percent.
What Types of Loans are Available?
Under the Home Advantage Program, eligible borrowers can access a 30-year a fixed-rate mortgage with competitive interest rates. Additionally, the program offers down payment assistance of up to 5% of the first mortgage loan amount, which can be used to cover closing costs and the down payment. This assistance is provided as a Down Payment Assistance second mortgage, which is deferred and does not require repayment until the home is sold, refinanced, or no longer used as the borrower's primary residence.
The first mortgage, can be an FHA, USDA, VA or Conventional Loan.
A VA loan is a powerful mortgage option for eligible veterans, active-duty service members, and qualified military spouses. If you qualify, this is likely the type of loan we would use.
- Guaranteed by the U.S. Department of Veterans Affairs (VA), VA loans offer zero down payment requirements, competitive interest rates, and no private mortgage insurance (PMI)—making homeownership more affordable.
- They also feature flexible credit requirements, streamlined refinancing options, and lower closing costs compared to conventional loans. Since VA loans are designed to support military families, they allow for reusable benefits, meaning qualified borrowers can use the program multiple times.
- This makes VA loans a top choice for affordable, accessible, and flexible home financing.
- When using the Home Advantage Program on a VA loan, the Down Payment Assistance will most likely be used to cover closing costs.
An FHA loan is a government-backed mortgage designed for first-time homebuyers and individuals with lower credit scores or smaller down payments.
- Insured by the Federal Housing Administration (FHA), these loans allow buyers to qualify with credit scores as low as 580 and a down payment of just 3.5%. Which can be from Down Payment Assistance.
- FHA loans also offer competitive interest rates and flexible debt-to-income requirements compared to conventional loans.
- They’re ideal for those who need affordable financing while still securing a home.
- Additionally, FHA loans have refinancing options to help borrowers reduce payments over time.
A USDA loan is a government-backed mortgage designed to help low- to moderate-income buyers purchase homes in rural and suburban areas with zero down payment.
- Guaranteed by the U.S. Department of Agriculture (USDA), these loans offer competitive interest rates, flexible credit requirements, and lower mortgage insurance costs compared to conventional loans for many home buyers.
- Eligible buyers must purchase in USDA-approved locations and meet income limits based on their region. USDA loans also provide streamlined refinancing options, making them a top choice for affordable, accessible homeownership.
- This program helps families secure stable housing while promoting rural development and community growth.
- USDA loans have income limits depending on area, they are geographically restricted, and they often require lower Debt-to-Income ratios.
- When using the Home Advantage Program on a USDA loan, the Down Payment Assistance will most likely be used to cover closing costs.
A Conventional loan is a popular mortgage option for homebuyers with strong credit and stable income, offering flexibility and competitive interest rates.
- Unlike government-backed loans, conventional loans are funded by private lenders and follow guidelines set by Fannie Mae and Freddie Mac.
- Borrowers typically need a credit score of 620 or higher and a down payment of at least 3%.
- Conventional loans can have lower overall borrowing costs since they don’t require mortgage insurance with 20% down. Although this is not typically the case when combining them with Down Payment Assistance.
Selecting the best type of loan for you situation is a very important decision. Our licensed and trained home loan experts can help you navigate this. CLICK HERE to connect with one of our home loan experts.
How Much Down Payment Assistance Can I Receive?
In this section, I will give an overview of the most popular Down Payment Assistance progam used with the Home Advantage first mortgage: The Home Advantage Down Payment Assistance Program.
- The Home Advantage Down Payment Assistance Program provides 3 percent, 4 percent or in some cases 5 percent of the first mortgage loan amount. For example, on a conventional first mortgage of $300,000, the Down Payment Assistance could be $9000, $12,000 or $15,000.
- On VA and USDA loans 5 percent is not typically available. Nor is it typically needed since those programs already require no down payment. On these programs, the Down Payment Assistance is typically used to cover closing costs and pre-paid taxes and insurance.
- On FHA and Conventional first mortgages, it is important that your loan expert helps you to choose which amount of down payment is best for you. The rate on the first mortgage increases as you select a larger Down Payment Assistance option. So, if you only need 4% Down Payment Assistance to cover all your cost, you would be served better to select that option rather than the 5% option.
- Further, the Down Payment Assistance Loan must be paid off in the case that you want to refinance your home loan. So having a larger Down Payment Assistance Loan can make it more difficult to refinance your home.
- Work with an expert to help guide you through these decisions.
Who Qualifies for the Home Advantage Program?
To qualify for the program, applicants must meet certain income limits and credit requirements. As of this writing, the qualifying income limit is $180,000/year. You do not need to be a First Time Home Buyer to qualify for this program. Further, should your income be higher than the current income limit we have other programs that have NO INCOME LIMIT.
You also must work with a loan officer and lender who are trained and approved to offer these loans. This trained loan expert can help you understand all the detailed requirements of this program and the various options. Our licensed and trained home loan experts can help you navigate this. CLICK HERE to connect with one of our home loan experts.
What properties can I buy?
The Washington State Home Advantage Program is designed to help low- and moderate-income homebuyers secure affordable financing with competitive interest rates and down payment assistance. This program applies to various types of properties, ensuring buyers have flexibility and options when choosing their ideal home. Eligible Property Types include:
Single-Family Homes
- Traditional detached houses are the most common property type eligible for Home Advantage loans.
- These homes offer privacy, space, and long-term investment potential.
Townhomes & Condominiums
- Approved condos and townhomes qualify for financing, making them great options for buyers seeking low-maintenance living.
- Buyers should check FHA, VA, or USDA loan condo approval requirements, as some complexes may have specific eligibility restrictions.
Manufactured Homes (Certain Restrictions Apply)
- Newer, permanently affixed manufactured homes qualify under Home Advantage financing, provided they meet HUD and FHA guidelines.
- The home must be on owned land rather than leased property.
Multi-Unit Homes (Up to 2 Units)
- Buyers looking to purchase duplexes may qualify if they occupy one unit as their primary residence.
- Properties with more than two units are not allowed with this program.
The Washington State Home Advantage Program supports various property types, making it easier for buyers to find affordable housing that fits their lifestyle. Whether you're purchasing a single-family home, condo, manufactured home, or multi-unit property, this program offers financial flexibility and competitive lending options.
Final Thoughts
By reducing the financial barriers to homeownership, the Home Advantage Program aims to empower Washington state residents to achieve their dream of owning a home. Click on GET A QUOTE to see if you qualify.