Homeownership Programs

Programs Financed Under the Indenture

The Commission has established a number of programs to help qualifying persons and families finance the costs of acquiring their primary residences within Washington State. One such program (the “House Key Program”) involves the issuance of bonds under both the Indenture and the Homeownership Indenture to finance the origination of Mortgage Loans. Another such program (the “Home Advantage Program”) involves both the issuance of Bonds under the Indenture to finance the origination of Mortgage Loans and selling mortgage loans originated under the Home Advantage Program into the To Be Announced Market ( the “TBA Market”).  The House Key Program and the Home Advantage Program are a few of the methods by which the Commission achieves its goal of promoting the availability of single-family housing for moderate- and low-income persons and families. These programs complement the Commission’s other single-family mortgage programs.

The House Key Program:

The House Key Program was established in 1995. It has funded over $2.689 billion of Mortgage Loans since funding commenced under the Indenture. See Appendix F (Table F-3) for a table showing the Commission’s historical usage of Bond proceeds. The primary source of funding for the House Key Program has been bonds issued under the Indenture. The 2023 Series 2A Bonds and a portion of 2023 Series 2N Bonds are being issued by the Commission to make funds available, upon the exchange of money to be derived in connection with the current refunding of certain outstanding Bonds of the Commission, to finance, together with additional proceeds of the 2023 Series 2N Bonds, certain Certificates (as defined below) which are backed by mortgage loans (“Mortgage Loans”) made to eligible borrowers under the Commission’s House Key Program for single-family, owner-occupied housing in Washington State as part of the Commission’s program to finance Mortgage Loans pursuant to the General Indenture (the “Program”), all as more fully described herein.

The 2023 Series 2A Bonds and 2023 Series 2N Bonds have been designated as “Social Bonds”.  Kestrel, a division of Kestrel 360, Inc. (“Kestrel”) has provided an independent external review and opinion that the 2023 Series 2A Bonds and 2023 Series 2N Bonds conform with the four core components of the International Capital Market Association’s (“ICMA”) Social Bond principles, and therefore qualify for Social Bond designation.

The Home Advantage Program:

The Commission first implemented the Home Advantage Program in July 2012.  The 2023 Series 2T Bonds will be the second Series of Bonds issued under the Indenture for the purpose of financing Certificates backed by Mortgage Loans originated under the Home Advantage Program and Home Advantage DPA Mortgage Loans.

The Home Advantage Program is available to borrowers whose annual household income is $180,000 or less to acquire single-family residences in Washington State. The Home Advantage Program is not limited to first-time homebuyers. Through the Home Advantage Program, Mortgage Lenders originate mortgage loans guaranteed by FHA, RHS and VA, or meeting Fannie Mae or Freddie Mac requirements, which loans are purchased by one or more servicers and aggregated with other mortgage loans into a loan pool supporting a GNMA Certificate, a Fannie Mae Certificate or a Freddie Mac Certificate, as applicable. Most borrowers under the Home Advantage Program qualify for (and use) down payment assistance in an amount of up to 5% of the amount of the first Mortgage Loan. This down payment assistance usually is structured as a deferred second mortgage loan, with no interest, that is due in 30 years (or at the time of sale, refinance or transfer of the home). Such down payment assistance loans made in connection with a first Mortgage Loan backing a Certificate financed by the proceeds of the 2023 Series 2T Bonds are referred to herein as the Home Advantage DPA Mortgage Loans.  The Commission also makes other forms of down payment assistance programs available for certain qualifying borrowers.