Multifamily Property Tax Exemption (MFTE) Program 7

Overview

The Multifamily Property Tax Exemption (MFTE) Program provides a tax exemption on multifamily housing developments in exchange for income- and rent-restricted homes. Seattle’s MFTE program is the largest in the State of Washington, with over 6,600 MFTE homes currently part of the program.

The City of Seattle first adopted the MFTE Program in 1998 and has reauthorized the program six times since then. MFTE “Program 7” or “P7” legislation took effect on November 14, 2025.

How is the MFTE program changing under P7?

The legislation for MFTE Program 7 includes several changes from the prior iteration of the program. For example, Program 7:

Increases the allowable rent and income limits for MFTE units, based on the area median income (AMI) levels.
Establishes MFTE affordability requirements for standard and alternative bedroom configurations.
Modifies comparability requirements and the distribution of MFTE units and unrestricted units.
Incentivizes more family-sized homes by increasing the share of total units that must have two or more bedrooms to meet the 20% unit set-aside.
For all new leases on or after November 14, 2025, replaces the Program 6 cap of 4.5% on the amount that rent limits can increase each year with a cap on unit-level rent increases that is the percentage change in rent limits that OH publishes annually or the percentage published by the Washington State Department of Commerce under RCW 59.18.700, whichever is lower, not to exceed 10%. The 4.5% cap on the annual increase in rent and income limits is still in effect for tenants with leases in effect prior to November 14, 2025, if they live in an apartment building subject to an MFTE P6 agreement.
Allows developers to apply to convert their MFTE P6 applications to reflect new MFTE P7 rules.
Reduces the MFTE program participation fee for developers to a $2,000 base fee, plus $200 per unit, up to a maximum of $10,000 per project.
Clarifies various definitions and application, reporting, and administrative processes.

I am a real estate developer, what can I expect?

Program 7 legislation allows developers to apply to convert their MFTE Program 6 applications to take advantage of new Program 7 rules. Developers who wish to pursue that option must submit a complete conversion application no later than December 31, 2025, 5 pm, PST.

As with P6, developers wishing to seek a property tax exemption for a multifamily housing project must submit a complete MFTE application at least 180 days before project completion (e.g., date of temporary certificate of occupancy or final building inspection).

We encourage you to read Ordinance 127316 to familiarize yourself with the new requirements. If you have specific questions about MFTE, please email OFH_MFTE@seattle.gov.

I live in an MFTE apartment. How will the new P7 legislation impact me? Will my rent go up?

If you already live in an MFTE apartment, your unit/lease follows the rules that were in place when your lease was signed. The income and rent regulations for your unit/lease won't change.

If your apartment is regulated to be affordable for people with incomes at 60% of the area median income (AMI), the limit will stay at 60% of AMI.

However, the Office of Housing updates MFTE rents every year based on changes to the area's median income. So while your building's affordability level stays the same (like 60% AMI), your actual rent amount may increase each year depending on changes to the annual income and rent limit tables. Your property manager may adjust your rent up to the annually published limit.

What about the rent cap?

The annual increase for rent and income limits is still capped at 4.5%, although this protection only applies for tenants with leases in effect prior to November 14, 2025, and only in apartment buildings subject to an MFTE P6 agreement. In those cases, the 4.5% cap on the annual increase of the maximum rent that can be charged for your unit will remain in place until your tenancy in that apartment ends.

The legislation caps unit-level rent increases at the percentage change in rent limits that OH publishes annually or the percentage published by the Washington State Department of Commerce under RCW 59.18.700, whichever is lower, not to exceed 10%.

How will income recertification change?

If you recertify your income every year, we're making it simpler:

Years 1-2: After you complete the full income certification process (with all your documents) when you move in, for the next two years, you can just sign a simple form stating your income. There is no need to gather all those documents again.
Year 3: You'll need to provide all the supporting documents again, just like you did when you moved in.

This means less paperwork and faster processing for most years, while still keeping track of income changes consistent with Washington State requirements for tax exempt multifamily housing.