Washington State Mortgage Guide 2025

Washington State Housing Market Overview

Washington State has one of the most dynamic housing markets in the United States, driven by the tech economy centered in Seattle and the broader Puget Sound region. Cities like Seattle, Bellevue, Redmond, and Kirkland consistently rank among the most expensive housing markets in the country, fueled by employment at Amazon, Microsoft, Boeing, and hundreds of tech and aerospace companies. Eastern Washington — particularly the Tri-Cities, Spokane, and Yakima areas — offers a significantly more affordable alternative.

Washington has no state income tax, a factor that significantly increases effective buying power for residents. However, the state does impose a graduated Real Estate Excise Tax (REET) on property sales, and property taxes vary considerably by county.

Types of Mortgage Loans Available in Washington

Conventional Loans

Conventional mortgages are the most commonly used loan type in Washington’s higher-priced markets. For 2025, the conforming loan limit is $977,500 for King, Snohomish, Pierce, and Kitsap counties — among the highest in the nation. Down payments as low as 3% are available for qualifying first-time buyers.

FHA Loans

FHA loans are popular among Washington buyers with limited down payment savings or credit challenges. The minimum down payment is 3.5% for borrowers with 580+ credit scores. FHA loan limits in King County reach $977,500 for 2025.

VA Loans

Washington has a large veteran and active-duty military population, supported by Joint Base Lewis-McChord (JBLM), Naval Station Everett, Naval Air Station Whidbey Island, and Fairchild Air Force Base. VA loans with zero down payment are extensively used across the state, particularly in Pierce, Thurston, and Island counties.

USDA Loans

Eastern Washington’s rural and agricultural communities have excellent USDA loan eligibility. Areas surrounding Yakima, Walla Walla, the Palouse, and much of the rural Columbia Basin may qualify for zero-down USDA Rural Development loans.

Washington State Housing Finance Commission (WSHFC)

The WSHFC administers a robust suite of homeownership programs including the Home Advantage program (first mortgage with below-market rates plus up to 4% down payment assistance), the House Key Opportunity program for income-qualified buyers, and the Mortgage Credit Certificate (MCC) program allowing qualified first-time buyers to convert a portion of their mortgage interest into a federal tax credit.

Property Taxes in Washington

Washington’s property taxes are assessed at the county level and vary significantly. King County (Seattle) residents pay effective rates averaging about 0.93% of assessed value, while Eastern Washington counties typically range from 0.6% to 0.9%. Washington also offers senior citizen and disabled person property tax exemptions for qualifying residents.

Steps to Get a Mortgage in Washington

Washington is a deed of trust state and closings are handled by title companies or escrow companies (not attorneys). Closings can be done remotely via a notary signing service. Pre-approval letters are mandatory for competitive Puget Sound area offers. The standard contract-to-close timeline is 30–45 days.