The City of Federal Way has expanded its program offering no-interest downpayment loans for first-time home buyers to purchase foreclosed properties.
The city has increased the income limits and expanded eligibility to cover foreclosures anywhere in the city.
The program offers loans of up to $50,000 at no interest, no payment and loan deferral of 15 years. The maximum loan amount is $50,000.
Families of three or more making up to $97,000 annually qualify, as do one-to-two persons households making up to $90,000.
Repayment is due at the time of sale, transfer or refinance within the first 15 years. The loan is forgiven at the end of 15 years. A loan payoff would be pro-rated without interest prior to 15 years, said Lynnette Hynden, the city’s human services manager.
The city launched the program, called House Key Federal Way, in November to help neighborhoods in Federal Way with high foreclosure rates. The Washington State Housing Finance Commission is a partner.
Home sales need to be under contract by the end of June before the program ends in September.
The program has a budget of $651,688 from the federal Neighborhood Stabilization Program funded by federal stimulus dollars. That money is expected to help 19 first-time home buyers purchase foreclosed or bank-owned homes in Federal Way.
For more information, contact the Washington State Housing Finance Commission at 1-800-767-4663 or Kolya McCleave at the City of Federal Way at 253-835-2653.