This bill creates a new state law establishing a revolving loan fund in the Department of Commerce to provide loans for mixed-income affordable homeownership development. The department must contract with the Washington State Housing Finance Commission to administer the fund if the commission determines it is "economically feasible," and the program is subject to amounts appropriated. The act is added as a new chapter in Title 43 RCW (the bill uses NEW SECTION Sec. 1–Sec. 5). The program sets eligibility for nonprofit and for-profit developers, public housing authorities, public development authorities, and other applicants as defined by commission rules. Loans generally may not exceed the lesser of $5,000,000 or 50% of total project costs (the commission may exceed this for cause), must carry a below-market interest rate that is above one percent (the text is ambiguous on the benchmark), and generally must be repaid within 48 months unless the commission authorizes otherwise. Repaid principal and interest must be tracked separately and reloaned for qualifying projects. Homeownership units financed must be sold and resold only to low-income households for at least 99 years, secured by covenants or deed restrictions. The commission must adopt award criteria, monitoring and reporting requirements, and may subcontract monitoring; it generally may not allocate more than $5,000,000 per funding round to projects in any single county unless no qualifying applications exist elsewhere. The bill creates enforcement measures: if a developer fails to deliver committed homeownership units or improperly screens income-restricted households, the developer must repay the full loan plus interest and may face a penalty up to 10%; if a later review finds a unit was not sold as affordable, the seller must pay a penalty up to the difference between the sale price and the affordable price. The text lacks several specifics: no RCW chapter number is provided, "mixed-income" and the broader mechanics of "permanently affordable" are not defined here, the phrase "below-market interest rate above one percent" is ambiguous, and criteria for determining "economically feasible" are not stated. Important operational details such as precise underwriting standards, security and default procedures, and exact reporting timelines are not included and are left to commission rules.

If enacted, the state would create a revolving loan fund run by the Department of Commerce and likely administered by the Washington State Housing Finance Commission to provide below-market loans for developers building permanently affordable homeownership units that must remain for low-income households for at least 99 years. Developers could get sizable gap financing (generally up to $5 million or 50% of project costs), with loans priced above 1% but below market, short standard repayment terms (generally no more than 48 months), and geographic limits on per-county awards; repaid money and interest would be recycled into new loans and failures to deliver units or to screen buyers properly could trigger full repayment plus penalties up to 10 percent (and sellers who sell above the affordable price could face penalties up to the difference). The groups most affected are developers (nonprofit and for-profit, plus public housing or development authorities) who would gain a new financing option but also face monitoring, reporting, resale covenants, and financial risk if they don’t meet requirements; the Housing Finance Commission and Department of Commerce would take on administration and oversight responsibilities without using commission general funds and must manage contracting, monitoring, and distribution rules; low-income households are the intended beneficiaries through more permanently affordable homes. Important details are unclear from the text provided — for example, how "mixed-income" is defined, what exactly counts as a "below-market" rate above one percent, what makes administration "economically feasible," and the program’s underwriting, default, and enforcement procedures — so practical scope and costs for administrators and applicants will depend on later policy and appropriation decisions.