Strategic Priorities – Office of Financial Management

Extending the reach of the Housing Trust Fund

The Housing Trust Fund program provides significant financial assistance to local governments and nonprofits preserving and building affordable housing for thousands of low-income individuals and families. Governor Ferguson is investing a total of $225 million in the Housing Trust Fund. This investment creates a total of 2,640 new affordable homes over five years, supports first-time homebuyers, protects existing affordable housing, and shortens development timelines for new affordable rental homes.

Investments in the Housing Trust Fund are allocated to many different programs advancing affordable housing development. The $80.5 million allocated for affordable multifamily rental housing creates 1,933 rental homes and directly invests in the following projects: The Thrive International Center in Tacoma ($2 million), Housing Hope Alliance Place ($2 million), and The African Diaspora Cultural Anchor Village ($7 million). This investment also increases maximum funding awards for multifamily rental housing projects from $5 million to $10 million, while shortening timelines for public, nonprofit, and other mission-oriented organizations applying for financial assistance.

Washington’s existing stock of affordable housing is aging and damaged by the recent extreme weather and flooding event described in the Governor’s emergency proclamation 25-07. These homes require significant investments to remain functioning and affordable. An investment of $50 million allocated to the Housing Trust Fund Preservation program covers the rehabilitation and repairs for 1,026 affordable homes. The program uses some of these funds for rehabilitating flood-damaged homes and acquiring affordable properties at critical inflection points — before these homes are purchased by market-rate developers or are legally exempt from affordable pricing requirements. Acquired properties are leased at affordable rates or sold by the state under the agreement that the home must be resold to other low-income homebuyers for a set period of time, protecting each unit’s affordability now and into the future.

An investment of $20 million is allocated to acquire and preserve mobile and manufactured home communities, preventing 426 households from displacement. This funding supports critical improvements, repairs, and infrastructure upgrades, preserving these affordable homes for at least 40 years.

The $73 million allocated for the Homeownership program creates 664 homes for first-time homebuyers and invests $8 million for the Kulshan Community Land Trust’s Thornton Village project in Ferndale. Homeownership assistance is typically a one-time public investment that builds long-term equity and economic stability for families. Combined with efforts accelerating housing development and planning, Washington is taking steps toward making affordable homeownership a reality for more families.

($225 million bonds)

Affordable Homes Created and Protected by the Housing Trust Fund 

Assisting low-income homeowners rehabilitating flood-damaged homes

Extending the reach of the Low-Income Home Rehabilitation Grant program serves rural homeowners impacted by recent flooding who have incomes at or below 200% of the federal poverty level. Homeowners that have families with children aged five or younger, senior citizens, and veterans will be prioritized when awarding grants.

($5 million bonds)

Most Counties Need Hundreds of New Homes Each Year — A Few Need Thousands

Multifamily building efficiency grants reduce operating costs

Multifamily projects in the Housing Trust Fund are eligible for grant funding to decarbonize, transition away from use of fossil fuels, and comply with the state’s clean building standards. This grant funding can be used to improve building envelopes, upgrade lighting, install high-efficiency electric appliances, audit building energy use, and model building performance. These improvements lengthen the useful life of affordable multifamily buildings by funding building efficiencies that reduce operating costs.

($5 million Climate Commitment Account-State)

Updating residential commercial zoning

By updating zoning restrictions, local governments are changing where home and mixed-use buildings can be built to better align with the state’s housing needs. Cities and counties can permit housing and mixed-used buildings in appropriate commercial areas, expanding opportunities for affordable housing sites near urban and transportation hubs.

($135,000 General Fund-State)

Reinstating local planning and local permit review grants

This budget gives local governments the tools they need to develop housing quickly. In the 2025 session, the Legislature adopted measures to speed up housing development for cities and counties: updated lot-splitting, modernized building codes, reduced parking minimums, and prioritization of transit-oriented development. These changes lower development costs and make it easier to build affordable homes near commercial and transit hubs. This investment provides full funding for adopted measures, ensuring that cities and counties have the support needed to implement these changes quickly and correctly.

This budget also restarts local planning and permit review grants. Many local governments need support to modernize permitting systems. Updating permitting systems addresses permit backlogs, helping residential development projects move forward efficiently. Local planning and permit review grants give cities and counties the capacity to shorten permit timelines, update local codes, and move affordable housing projects through their systems quickly.

Washington is also prioritizing transit-oriented development, assisting 38 local governments in designating and planning for 90 rail stations and 800 bus rapid stops across the state to account for increased transit utilization. Vancouver must have stations and stops designated and planned by June 2026, Spokane by December 2026, and remaining cities in the central Puget Sound area by December 2029. This bill also expands the use of the Multi-Family Tax Exemption, incentivizing developers to invest in low-income housing.

($1.9 million General Fund-State)

Creating a housing accelerator framework

Eliminating barriers to building new affordable housing reduces the cost of housing for consumers and developers. The state is simplifying grant applications, updating permitting rules, and reducing the unnecessary steps in planning so projects can move faster.

($350,000 bonds)

Taking the first step to establish a housing agency

Washington’s housing crisis demands a cabinet-level agency focused on meeting the diverse housing needs across the state. Governor Ferguson will sign an executive order number creating the Washington State Task Force to establish a Department of Housing. This task force will serve as the state’s problem-solving hub for expanding housing supply across Washington and engage a broad range of interested parties to identify gaps and opportunities for all housing types. The task force will provide recommendations for the work, structure, and costs of a housing agency by November 2026.

($500,000 General Fund-State)

Partnering with the Home Futures Institute

The Home Futures Institute is a program to build the capacity of nonprofit community land trusts (CLTs) and other organizations interested in developing or preserving affordable housing. Funding matches CLT partner organizations with corporate banking support and provides technical assistance, operating costs, and collaborative learning opportunities in real estate development, conflict mediation, and long-range sustainability.

($4 million Housing Trust Account)

Supporting coordinated land banking legislation

Access to land for housing development is one of the biggest factors driving housing costs. Funding land banking allows local governments and organizations to secure sites for future housing development as it becomes available. Land banking helps turn underutilized or vacant land into places where homes can be built. This investment builds on the success of existing county-level efforts and encourages local governments to secure sites for affordable housing before they are priced out of reach.

($2 million bonds)