Both the House and Senate have passed slightly different versions of HB 1474. The bill would add a $100 “covenant homeownership program assessment” for each recorded document. (This would not apply to birth, marriage, divorce, or death documents; marriage licenses issued by a county auditor; certain name change orders; documents recording government wage liens or satisfactions of liens; assignments or substitutions of previously recorded deeds of trust; or documents otherwise exempted from recording fees.)

Of the new document recording fee, 1% would be retained by the county auditor and the rest would go to the new covenant homeownership account. The current standard document recording fee, including all current surcharges, is $200. (That includes the $100 surcharge for housing programs the state added in 2021.)

According to the fiscal note for the version of HB 1474 that was passed by the House on March 2, the bill’s document recording assessment would increase revenues to the covenant homeownership account by $148.5 million in 2023–25 and by $198.0 million in 2025–27. In the fiscal note, the Department of Commerce notes, “Forecasting document recording fees is difficult due to the variable nature of the real estate market.” Indeed, in October, Commerce reported that revenues from the four current document recording surcharges for housing programs have not been as high as expected.

HB 1474 would require the Washington state housing finance commission to complete a covenant homeownership program study by March 1, 2024. The study would include recommendations on policy changes to remedy discrimination against historically marginalized communities in Washington. This would include creating special purpose credit programs, which are defined as credit assistance programs authorized by the federal consumer financial protection bureau.

The special purpose credit programs would provide loans for down payment and closing cost assistance for participants. The loans would have to be repaid when the house is sold. The program would be limited to 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.” (Note that the definition of first-time buyer is very broad.) The down payment and closing cost assistance would be provided beginning by July 1, 2024.

The House-passed operating budget for 2023–25 would appropriate $150.0 million from the covenant homeownership account and $500,000 from the general fund–state to implement 2SHB 1474. The Senate-passed budget does not include any funding for the program. (The Senate passed the operating budget on March 29 and HB 1474 on April 7.)