Washington Home Loans & Mortgage Rates

Washington State is a tale of two markets. The Seattle metro (King, Pierce, and Snohomish counties) drives some of the highest home prices in the country, powered by Amazon, Microsoft, Boeing, and a deep tech ecosystem. Meanwhile, eastern Washington and smaller metros offer surprising affordability. The statewide median sits around $585,000, but local variations are enormous.

King County (Seattle, Bellevue, Kirkland, Redmond) commands a median around $845,000. Snohomish County (Everett, Marysville) runs approximately $650,000. Pierce County (Tacoma, Lakewood) offers relative value at about $500,000. Clark County (Vancouver, Portland suburb) sits around $500,000. Spokane has emerged as a fast-growing market at roughly $380,000. Thurston County (Olympia) approximately $450,000. Smaller markets like Yakima, Tri-Cities, and Bellingham range from $350,000-$475,000.

Washington’s FHA limits reflect the Seattle premium. King, Pierce, and Snohomish counties receive $1,063,750 — well above most states. Kitsap County gets an elevated limit around $590,000. All other 35 counties sit at the baseline $541,287, which is still more than adequate for purchases in eastern and rural Washington.

The Washington State Housing Finance Commission (WSHFC) runs the Home Advantage and House Key Opportunity programs, providing DPA of up to 4-5% of the loan amount. Washington has no state income tax, which improves monthly affordability. The Real Estate Excise Tax (REET) is seller-paid. Property taxes are moderate at roughly 0.84-1.0%.

2026 Loan Limit Takeaways

The Seattle metro tri-county area (King, Pierce, Snohomish) receives $1,063,750 FHA, covering the vast majority of purchases even in this expensive market. Kitsap gets a mid-tier elevated limit. All other 35 counties use the $541,287 baseline, which covers nearly all purchases outside the Seattle metro. Note that in King County where the median is $845,000, some homes will exceed FHA limits, making conventional or VA loans a better fit for higher-priced properties.

Down Payment Assistance Notes

The Home Advantage $215,000 income limit is among the most generous in the nation, making it accessible to many middle-income buyers. On a $585,000 home with 4% DPA, that is approximately $22,500 covering the 3.5% FHA down payment plus some closing costs. Local programs like Tacoma ($60,000) and Clark County ($60,000) can be stacked for enormous combined assistance. Homebuyer education required for all WSHFC programs.

Closing Costs in Washington

Washington has moderate buyer closing costs because the major transfer tax (REET) is seller-paid.

Real Estate Excise Tax (REET): Graduated state tax on the sale price. Rates increase with price: approximately 1.1% on first $525,000, 1.28% on $525K-$1.525M, 2.75% on $1.525M-$3.025M, 3.0% above $3.025M. SELLER-PAID. On a $585,000 home, seller pays approximately $7,000-$7,500 in REET. Local REET adds approximately 0.25-0.50%.

No State Income Tax: Washington has no state income tax, improving overall affordability and take-home pay. This is a major advantage over neighboring Oregon (9.9% top rate).

Escrow State: Washington uses escrow companies for closings. No attorney requirement, though many buyers choose to use one for complex transactions. Escrow fees typically $500-$900 per party.

Title Insurance: Typically $1,200-$2,500 depending on purchase price.

Estimated Total Buyer Closing Costs: On a $585,000 purchase, expect approximately $11,700-$23,400 (2.0-4.0%). Major buyer costs are lender fees, escrow, title insurance, and prepaid items. The seller-paid REET keeps buyer costs manageable.

Property Taxes in Washington

Washington property taxes are moderate and benefit from no state income tax offsetting the cost.

Statewide Average: Approximately 0.84-1.0% effective rate. Median annual payment approximately $4,400. Property assessed at 100% of market value.

County Effective Rates: King County approximately 0.88% (high values offset by relatively lower rates). Snohomish County about 0.87%. Pierce County approximately 1.02%. Clark County about 0.90%. Spokane County approximately 0.95%. Thurston County about 1.05%. Kitsap County approximately 1.00%.

Levy Limits: Washington caps regular property tax levies at 1% of assessed value (similar to Indiana). Annual increases limited to 1% plus new construction.

Exemptions: Senior/Disabled Property Tax Exemption for 61+ with income under approximately $75,000. Property Tax Deferral Program for seniors. Disabled Veteran Exemption.

On an $845,000 home in King County, expect approximately $7,400-$8,000 per year. In Pierce County on a $500,000 home, about $5,100. In Spokane on a $380,000 home, approximately $3,600. Property taxes are very manageable compared to other high-cost states (NJ 2.23%, IL 1.92%).

USDA Loan Eligibility in Washington

Washington has significant USDA eligibility in its rural areas.

Eligible areas include much of eastern Washington (Whitman, Columbia, Garfield, Asotin counties), central Washington outside Yakima and Tri-Cities (Kittitas, Chelan, Okanogan, Douglas counties), and parts of western Washington outside Seattle-Tacoma (Pacific, Lewis, Wahkiakum, Skamania counties). San Juan County and portions of Island County may qualify.

The Olympic Peninsula (Clallam, Jefferson counties), parts of Skagit County outside Mt. Vernon, and rural portions of Whatcom County also have USDA eligibility. Spokane’s outer fringes and many smaller eastern Washington communities qualify.