12th-District Representative Mike Steele’s bill that would convert a low-income home rehab loan program into a grant program is progressing through the Senate committee.

The substitute of HB 1250 is looking to convert the Department of Commerce’s Low-Income Home Rehabilitation Revolving Loan Program into a grant program and forgive the outstanding balance of any existing loans.

Rural homeowners who earn less than 200% of the federal poverty level, 80% of the area county median income, or 60% of the state median income, would be eligible to receive a loan to repair their existing home.

The grant cannot exceed 80% of the rehabilitated home's assessed value or $50,000, whichever is greater.

On March 10, the Senate Housing committee held a public hearing for this bill. The Department of Commerce shared with the committee that approximately $1.4 million in loans would be forgiven.

Executive Director of the Washington State Community Action Partnership Jeff DeLuca thanked the sponsors for their work on this bill.

“This improved program will support generational wealth transfer in ways that actually break the cycle of poverty, which is our mission and community action,” DeLuca said. “As we work to tackle our statewide housing crisis, weatherization is the most cost-effective means we have to preserve affordable housing, but you can't weatherize a home where the roof or the floors [are] caving in.”

Habitat for Humanity Chief Advocacy Officer Ryan Donohue says his organization supports the bill’s intent to support existing homeowners.

“Without this legislation, to be frank, this program would be facing serious questions about its future,” Donohue said. “Rising interest rates and income limit barriers have risked making this program, in its current form, inaccessible for the families that need it the most.”

If passed, the loan program would end and be converted to the grant program on July 1, 2023.

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