The state imposes four document recording surcharges to help fund housing programs. As I wrote last year, the revenues from these surcharges have been falling short of estimates.

The 2023–25 operating budget (as passed by the Legislature) includes funding to backfill these programs. According to the conference report summary document, $66.0 million from the general fund–state (GFS) is used to support programs funded by the document recording fees:

• $40.0 million is transferred from the GFS to the home security fund account in fiscal year 2024,
• $8.0 million is appropriated into the landlord mitigation program account in FY 2024, and
• $18.0 million ($9 million in FY 2024 and $9 million in FY 2025) is appropriated “for grants to local governments for maintaining programs and investments which are primarily funded through document recording fees.”

The $66.0 million is considered one-time and is not continued in the outlook.

(On top of that, at the maintenance level, the budget appropriates $37 million from the GFS to the affordable housing for all account, for permanent supportive housing operations, maintenance, and services. The budget also transfers another $9.0 million from the GFS to the home security fund account for 2023–25.)

Meanwhile, Gov. Inslee has signed SSB 5386. The bill collapses the four document recording surcharges into one and simplifies the distribution of the revenues (which go to the counties and three different state accounts). The total amount of the combined surcharges is unchanged, and the same amount goes to each account. (See the tables in this post.)

Finally, Gov. Inslee has also signed 2SHB 1474, which adds a new $100 document recording surcharge to fund a covenant homeownership program. Under the program, loans for down payment and closing costs assistance will be provided for people with household income at or below 100% of median income who are first-time home buyers and who are Washington residents who either lived or are descended from someone who lived in Washington on or before April 11, 1968 and “was or would have been excluded from homeownership in Washington state by a racially restrictive real estate covenant.” (See this post for more.)

The new document recording fee will be assessed beginning Jan. 1, 2024, and the down payment and closing cost assistance will be offered beginning July 1, 2024.

The operating budget appropriates $150.0 million from the covenant homeownership account (to which the revenues from the new document recording fee will be deposited) to implement 2SHB 1474. (It also appropriates $500,000 from the GFS for this purpose.)