The real estate market in Bothell is known to be quite competitive, thanks to the high demand for the lifestyle offered and the favorable location with easy commute options. Although potential owners would find it feasible to afford the monthly repayment for the mortgage, the biggest challenge would lie with the high amount of down payment needed to complete the purchase. Although the conventional idea is that the down payment needs to be at least 20% of the purchase value, possibly exceeding $150,000 at this time, the truth remains that the potential buyer has much more at his disposal than he realizes.

Since Bothell is the only city that lies on the border of both King County and Snohomish County, the residents of this place have an edge when it comes to accessing financial help. By taking the best out of this opportunity, you are able to fill the gap existing between your savings and the down payment for purchasing the house.

Washington State Housing Finance Commission (WSHFC) Programs

The Washington State Housing Finance Commission (WSHFC) serves as the primary resource for homebuyer assistance in the state by partnering with local lenders to offer specialized loan products. Their most flexible option, the Home Advantage Program, is available to both first-time and repeat buyers who meet specific credit requirements (typically a 620 score or higher) and fall under a statewide income cap of approximately $180,000. 

For those with lower household incomes, the House Key Opportunity Program is a vital resource to explore. Unlike the more general Home Advantage option, this program is designed exclusively for first time home buyers Bothell (or those purchasing in specifically targeted areas). The primary benefit is that it often provides a lower interest rate on your main mortgage, which can significantly reduce your monthly costs and save you thousands of dollars over the life of your loan.

Understanding the "Silent Second" Mortgage

When we talk about down payment assistance (DPA), it rarely means a suitcase full of free cash. Most of these programs function as a "silent second" mortgage.

Here is how it works: At closing, you sign papers for your main mortgage and a second set of papers for the down payment loan. However, you usually do not make monthly payments on that second loan. It sits silently in the background, accruing no interest (in many cases), and is only repaid when you sell the home, refinance, or pay off the main mortgage. It allows you to keep your monthly cash flow manageable while still getting into the house.

The Covenant Homeownership Program

There is a new program on the block that launched in July 2024, and it is designed to address historical inequities. The Covenant Homeownership Program was created to help homebuyers who were impacted by discriminatory housing practices in Washington State prior to 1968.

If you, your parents, or your grandparents lived in Washington before 1968 and were affected by these laws, you might be eligible for substantial assistance. 

The program offers a 0% interest down payment assistance loan with deferred payments. It is distinct because, unlike some other programs, there is potential for the loan to be forgiven if you stay in the home for a specific period. The income limits are generous—generally around 100% to 120% of the Area Median Income (AMI)—but you will want to check the latest guidelines as they are set to adjust in 2025.

Local Powerhouse: ARCH (A Regional Coalition for Housing)

Bothell, being an active member of the ARCH (A Regional Coalition for Housing), offers specialized assistance to those who are taking part in the purchase on the side of King County in Bothell. The prime objective of ARCH is the improvement of local housing affordability. 

One of their main programs takes place, namely the ARCH East King County Downpayment Assistance Loan, which provides up to $30,000 to those who are eligible. In general, they provide a 4% simple interest rate, with no payments until the sale or refinance of the home, but in this case, at least 2% has to be contributed by the applicants out of their own pocket.

It is essential to distinguish this financial assistance from ARCH Trust Fund Homes, which function as an inventory of price-restricted properties rather than a loan. These units—often new construction condos or townhomes—are sold at below-market rates specifically to income-eligible buyers. If you currently live or work within Bothell, you may be eligible for "priority points" on the waiting list for these properties. For those who find standard market prices for new construction daunting, monitoring ARCH availability and joining their notification list is a highly effective strategy.

Navigating Eligibility and Regional Options

To purchase a home in today's market, a potential homebuyer must understand how a household income limit and household size impact eligibility for specific mortgage programs. Whether you are eyeing a new construction home or an existing property, your household income must not exceed the caps set by the Home Advantage or House Key Opportunity programs. 

While the Home Advantage first mortgage is versatile, the House Key Opportunity program is specifically for a first-time homebuyer (defined as someone who hasn’t owned a home in three years). To prequalify for a mortgage loan and establish your eligibility, you must attend a free homebuyer education seminar sponsored by the Washington State Housing Finance Commission. This essential step in the homebuying process often includes a pre-purchase counseling session to help a borrower understand how their credit score affects their mortgage loan interest rate.

For those looking within an ARCH member city like Bothell, Redmond, Issaquah, or Clyde Hill, the ARCH East King County Downpayment Assistance Loan Program offers up to $30,000 for purchase price and closing cost assistance. Depending on the county downpayment assistance loan program, you may qualify for a 1 percent interest rate or 4 percent simple interest, typically provided as a second mortgage loan and established with the payment deferred until you sell or refinance. 

Those with deep roots in Washington—specifically those who lived in Washington before April 1968—can access the Covenant Homeownership Program through the homeownership resource center. Additional options like Veterans Downpayment Assistance, the Bellingham downpayment assistance program, or a community land trust further help make homeownership possible. Once you sign a purchase and sale agreement, the home must be your primary residence to satisfy the homeowner occupancy payment requirement, allowing you to secure your first home through these powerful downpayment assistance loan program models.

Options for the Snohomish County Side

If your search moves into the Snohomish County portion of Bothell, you gain access to county-specific resources like the Snohomish County Down Payment Assistance Loan, which is often administered by partners like HomeSight. 

Historically offering up to $50,000 for eligible households, these funds typically feature a 3% interest rate and are deferred for 30 years. Because geography is critical—where a few blocks determine which county’s funds you can target—it is essential to verify the property's parcel number and jurisdiction to ensure you are applying for the correct assistance.

Specialized Assistance: Veterans and Disability Support

Beyond income-based programs, there are specialized resources designed for specific demographics. If you fall into one of these categories, the terms can be even more favorable.

• Veterans: The WSHFC offers a Veterans Down Payment Assistance Loan that can be combined with a VA home loan. This provides up to $10,000 to help with closing costs or the down payment, offering a smoother entry for active military and veterans.
• Disability Support (HomeChoice): This is one of the most helpful programs available. The HomeChoice program offers up to $15,000 in down payment assistance for buyers who have a disability or have a member in your household with a disability living with them. It is designed to help households qualify for a larger mortgage or afford necessary modifications.
• Energy Spark: If you are buying a highly energy-efficient home—typically new construction or a retrofitted older home—you might qualify for Energy Spark. This program offers an interest rate reduction, which saves you money every single month for the life of your loan.

Eligibility and the Application Process

While the process for securing assistance is more detailed than a standard conventional loan, you can successfully navigate it by following these specific steps:

1. Homebuyer Education: This is a mandatory requirement for any state-sponsored assistance. You must complete a five-hour, Commission-sponsored seminar that covers the home-buying process in Bothell. Once completed, your certificate remains valid for two years.
2. Partner with an Expert Not every bank or loan officer knows how to structure these unique loans, and not every agent knows how to navigate the county-specific requirements. To avoid losing out on this money, you'll want to work with a group that has specific experience in local affordability programs. If you're seeking out the best real estate agent in Bothell, make sure they know both King and Snohomish county assistance inside and out. They can recommend "Commission-Trained" lenders, and prepare your offer for maximum support.
3. Income Verification: Unlike standard loans, lenders will evaluate total "household income" rather than just the applicant's earnings. You should be prepared to provide financial documentation for every adult who will be residing in the home.
4. Layered Funds: With any luck, a good loan officer will be able to "stack" multiple programs in order to maximize your benefits. For example, you could be eligible to layer the WSHFC Home Advantage program with a local ARCH loan for even lower out-of-pocket expenses.

FAQs

Do I have to pay back down payment assistance in WA?

Yes, in most cases. Most down payment assistance programs in Washington are deferred-payment loans, not grants. You generally do not make monthly payments on them, but you must repay the principal (plus any accrued interest) when you sell the home, refinance, or pay off your main mortgage.

Can I rent out my house if I use these programs?

No. These programs are strictly for owner-occupied homes. If you move out and turn the property into a rental, the loan usually becomes due immediately. In some cases, you may even face a "recapture tax" if you sell the home too soon after buying it, so these are best for buyers planning to stay put for a few years.

What is the income limit for homebuyer assistance in Bothell?

Income limits vary by program and by county, but they typically range between $140,000 and $180,000 for most state programs. Since Bothell spans two counties, the limit may depend on which side of the county line the property is on. Always check with your lender for the current year's exact figures.

Can I use assistance programs if I'm not a first-time buyer?

It depends on the program. With the Home Advantage program, you are eligible as a repeat buyer if you qualify financially and have good credit. Other programs, such as the House Key Opportunity or an ARCH loan, require you to be a first-time buyer, defined as someone who has not owned a primary residence within the past three years. This can be waived if you are targeting a "Targeted Area."