Current Transformation

Washington state is undergoing a major transformation in housing policy. With the passage of the “Missing Middle” housing laws, including HB 1110, cities are being pushed to increase housing density in neighborhoods traditionally zoned for single-family homes. These changes don’t just impact developers and city planners—they’re also reshaping how mortgages work across the state.

LBC Capital is at the forefront of helping homebuyers, homeowners, and investors understand how these new zoning laws affect mortgage opportunities. As financing becomes more complex with changing property types, LBC Capital ensures borrowers have the right strategy and guidance to navigate Washington’s evolving housing landscape.

What Is Missing Middle Housing?

“Missing Middle” housing refers to residential buildings that fall between detached single-family homes and large apartment complexes. These include duplexes, triplexes, fourplexes, townhomes, courtyard apartments, and ADUs (accessory dwelling units).

Historically, many cities across Washington restricted neighborhoods to single-family zoning, making these types of housing difficult or impossible to build. HB 1110, signed into law in 2023, changes that. It mandates cities with over 25,000 residents—and cities near large urban hubs—to allow middle housing on lots previously reserved for single-family homes.

Key Provisions of HB 1110

Expanded Housing Options

Under the law, cities must allow at least:

  • Two units per lot in most residential zones
  • Four units per lot in cities with populations over 75,000
  • Six units per lot near major transit stops or if at least two units are designated affordable

These rules must be implemented during the cities’ next scheduled comprehensive plan update. For many cities, that deadline is mid-to-late 2025.

Local Control with State Enforcement

While local governments can regulate design and infrastructure standards, they can’t prohibit middle housing outright. The law provides mechanisms for state enforcement if jurisdictions fail to comply.

How Missing Middle Laws Impact Mortgage Lending

The shift toward denser, more flexible housing options is already changing how buyers approach mortgages. It also requires lenders to adapt to new property types and financing structures. LBC Capital is helping borrowers stay ahead of the curve by offering loan products and guidance tailored to Washington’s new housing reality.

Increased Demand for Multi-Unit Mortgages

Duplexes, triplexes, and fourplexes are now easier to build or buy. That’s driving more buyers to look for mortgage options that cover multi-unit properties. These loans differ from standard single-family home mortgages. They often require different underwriting standards, income verification methods, and down payment rules.

LBC Capital provides financing for both owner-occupied and non-owner-occupied multi-unit properties. Whether a borrower plans to live in one unit and rent out the rest or purchase all units as investment properties, we help structure loans that fit their long-term goals.

Rise of ADUs and Rental Income Consideration

Accessory dwelling units—small, self-contained homes located on the same lot as a main house—are gaining popularity thanks to HB 1110. With zoning barriers removed, more homeowners can add an ADU to their property. This presents both new value and rental income potential.

LBC Capital helps borrowers leverage rental income from ADUs during mortgage qualification. By using projected income as part of the underwriting process, we help more clients qualify for larger loan amounts or better terms.

Property Value Appreciation and Refinance Opportunities

As zoning changes increase the development potential of properties, home values are rising in many areas. A single-family lot that can now accommodate four or six units becomes significantly more valuable.

LBC Capital assists current homeowners in refinancing to tap into new equity. Whether it’s for home improvements, ADU construction, or debt consolidation, we ensure clients access their equity with clear, competitive loan options.

Infrastructure Costs and Mortgage Planning

Middle housing can bring increased infrastructure demands—such as utility upgrades, parking, or stormwater improvements. While cities may help offset some of these costs, homeowners and developers often bear part of the financial responsibility.

These additional expenses affect overall home affordability. LBC Capital works with borrowers to factor in infrastructure and permit costs during the mortgage planning phase. That means no surprises after closing—and a mortgage that fits your full budget.

How LBC Capital Supports Buyers in Washington

LBC Capital is more than a lender. We’re a mortgage partner that understands the local real estate market and the laws shaping it. Washington’s missing middle policies are creating opportunity—but also complexity. LBC Capital ensures borrowers have the clarity and confidence to act.

Tailored Mortgage Products for Middle Housing

Traditional mortgage products don’t always work well for non-traditional housing types. LBC Capital offers flexible loan options designed for:

  • Duplexes, triplexes, and fourplexes
  • Townhomes and cottage-style developments
  • ADUs and DADUs (detached ADUs)
  • Mixed-use properties with small commercial components

We evaluate each borrower’s goals and match them with mortgage products that meet current zoning, lending, and affordability guidelines.

Expertise in Rental and Investment Strategies

Many middle housing units offer rental income opportunities. Whether it’s a first-time homebuyer planning to live in one unit and rent the others, or an experienced investor purchasing a multi-unit property, LBC Capital provides strategic guidance.

We assist with qualifying rental income during the underwriting process, evaluating market rent reports, and helping clients maximize the financial benefit of owning multi-unit properties.

Staying Ahead of Policy Changes

Washington’s implementation of HB 1110 will continue through 2025 and beyond. Some cities may adopt broader reforms. Others may add restrictions within the limits of state law. LBC Capital tracks these changes in real time.

Our team stays informed on zoning updates, city planning timelines, and new housing ordinances. That allows us to provide location-specific mortgage advice and avoid delays in financing due to local compliance issues.

The Future of Mortgages in Washington

Washington’s missing middle housing policies mark a major shift. They unlock potential in underutilized land and invite more inclusive growth. But this progress also introduces new layers of complexity when it comes to financing.

LBC Capital ensures clients don’t get lost in the details. Whether buying a new fourplex, adding an ADU, or refinancing to tap into rising property values, we guide borrowers every step of the way.

As the housing market evolves, so must your mortgage partner. LBC Capital is ready to help you navigate this new landscape—with smart financing, expert insight, and a commitment to making homeownership accessible to more Washington families.