State opens early-stage housing funding to local governments, tribes

NORTH CENTRAL WASHINGTON — Local governments working to advance affordable housing projects may have a new tool available earlier in the development process than many cities typically engage.

The Washington State Department of Commerce’s Multifamily Housing Unit has released a draft Notice of Funding Availability for a new round of predevelopment and technical assistance grants aimed at helping affordable housing projects move from concept to competitiveness in future capital funding rounds. This funding, authorized in the 2025–27 state capital budget, is designed to cover early costs that often present barriers for smaller jurisdictions and newer project sponsors, including planning, design, site work, and other preconstruction preparation.

While such opportunities are often associated with nonprofit or private housing developers, Commerce’s eligibility language explicitly includes local governments, housing authorities, and federally recognized tribes — opening a door for municipal actors to access dollars earlier than traditional capital grant programs.

What this means for local housing efforts

Commerce’s predevelopment funding is part of broader statewide efforts to address housing challenges that communities across North Central Washington have been responding to:

• In Chelan, a recent update to the city’s housing strategy drew scrutiny and highlighted the stakes of local planning ahead of state requirements.
  
  
• In Leavenworth, city leaders have sought community ideas to support innovative housing solutions, emphasizing local engagement in housing policy.
  
  
• In Wenatchee, updates to zoning and long-range plans have been focused on housing and infrastructure improvements as part of a broader growth strategy.
  
  
• At the state level, legislative proposals have recently surfaced around how local growth decisions — including challenges to comprehensive plans — might be reformed as part of housing and land-use policy.

For jurisdictions referenced above and others engaging in housing policy discussions, predevelopment funding could provide a concrete mechanism to support early project work where none previously existed.

How the funding is structured

Commerce expects to award approximately $2.9 million statewide through the program, with individual awards capped at $200,000 for predevelopment activities and $50,000 for technical assistance unless a waiver is approved. The funding is intended to support specific affordable multifamily rental projects rather than broad organizational capacity building.

Predevelopment activities eligible under the draft notice include architectural planning, environmental review, early infrastructure evaluation, and coordination with local permitting bodies. The technical assistance component is designed to strengthen a project’s competitiveness in future capital funding cycles.

Commerce indicates it will apply preferences for projects serving rural areas, underserved communities, and organizations that are new to affordable housing development, while also seeking geographic distribution across the state.

Competitive context and next steps

For local governments that have been discussing housing needs but have not yet advanced specific projects far enough to pursue major construction funding, this program offers a way to formalize concepts, assess feasibility, and forge partnerships in advance of highly competitive capital funding rounds.

Commerce is currently seeking public comment on the draft funding notice, with feedback due by February 4. That feedback can be sent to HTFCapacityBuilding@commerce.wa.gov.

Applications are expected to open February 11, with final submissions due by noon April 13. More detailed information, including eligibility requirements and application materials, is included in the draft Notice of Funding Availability posted by the Multifamily Housing Unit.

Andrew Simpson: 509-433-7626 or andrew@ward.media