diff --git a/.codecov.yml b/.codecov.yml
index 84d903d0..88a9c27d 100644
--- a/.codecov.yml
+++ b/.codecov.yml
@@ -107,6 +107,12 @@ ignore:
   - "backend/internal/metrics/**"
   - "backend/internal/trace/**"
 
+  # Backend test utilities (test infrastructure, not application code)
+  # These files contain testing helpers that take *testing.T and are only
+  # callable from *_test.go files - they cannot be covered by production code
+  - "backend/internal/api/handlers/testdb.go"
+  - "backend/internal/api/handlers/test_helpers.go"
+
   # ==========================================================================
   # Frontend test utilities and helpers
   # These are test infrastructure, not application code
diff --git a/backend/internal/api/handlers/test_helpers_test.go b/backend/internal/api/handlers/test_helpers_test.go
new file mode 100644
index 00000000..451d078a
--- /dev/null
+++ b/backend/internal/api/handlers/test_helpers_test.go
@@ -0,0 +1,82 @@
+package handlers
+
+import (
+	"sync/atomic"
+	"testing"
+	"time"
+)
+
+// TestWaitForCondition_PassesImmediately tests that waitForCondition
+// returns immediately when the condition is already true.
+func TestWaitForCondition_PassesImmediately(t *testing.T) {
+	start := time.Now()
+	waitForCondition(t, 1*time.Second, func() bool {
+		return true // Always true
+	})
+	elapsed := time.Since(start)
+
+	// Should complete almost instantly (allow up to 50ms for overhead)
+	if elapsed > 50*time.Millisecond {
+		t.Errorf("expected immediate return, took %v", elapsed)
+	}
+}
+
+// TestWaitForCondition_PassesAfterIterations tests that waitForCondition
+// waits and retries until the condition becomes true.
+func TestWaitForCondition_PassesAfterIterations(t *testing.T) {
+	var counter atomic.Int32
+
+	start := time.Now()
+	waitForCondition(t, 500*time.Millisecond, func() bool {
+		counter.Add(1)
+		return counter.Load() >= 3 // Pass after 3 checks
+	})
+	elapsed := time.Since(start)
+
+	// Should have taken at least 2 polling intervals (20ms minimum)
+	// but complete well before timeout
+	if elapsed < 20*time.Millisecond {
+		t.Errorf("expected at least 2 iterations (~20ms), took only %v", elapsed)
+	}
+	if elapsed > 400*time.Millisecond {
+		t.Errorf("should complete well before timeout, took %v", elapsed)
+	}
+	if counter.Load() < 3 {
+		t.Errorf("expected at least 3 checks, got %d", counter.Load())
+	}
+}
+
+// TestWaitForConditionWithInterval_PassesImmediately tests that
+// waitForConditionWithInterval returns immediately when condition is true.
+func TestWaitForConditionWithInterval_PassesImmediately(t *testing.T) {
+	start := time.Now()
+	waitForConditionWithInterval(t, 1*time.Second, 50*time.Millisecond, func() bool {
+		return true
+	})
+	elapsed := time.Since(start)
+
+	if elapsed > 50*time.Millisecond {
+		t.Errorf("expected immediate return, took %v", elapsed)
+	}
+}
+
+// TestWaitForConditionWithInterval_CustomInterval tests that the custom
+// interval is respected when polling.
+func TestWaitForConditionWithInterval_CustomInterval(t *testing.T) {
+	var counter atomic.Int32
+
+	start := time.Now()
+	waitForConditionWithInterval(t, 500*time.Millisecond, 30*time.Millisecond, func() bool {
+		counter.Add(1)
+		return counter.Load() >= 3
+	})
+	elapsed := time.Since(start)
+
+	// With 30ms interval, 3 checks should take at least 60ms
+	if elapsed < 50*time.Millisecond {
+		t.Errorf("expected at least ~60ms with 30ms interval, took %v", elapsed)
+	}
+	if counter.Load() < 3 {
+		t.Errorf("expected at least 3 checks, got %d", counter.Load())
+	}
+}
diff --git a/backend/internal/api/handlers/testdb_test.go b/backend/internal/api/handlers/testdb_test.go
new file mode 100644
index 00000000..2982f166
--- /dev/null
+++ b/backend/internal/api/handlers/testdb_test.go
@@ -0,0 +1,164 @@
+package handlers
+
+import (
+	"testing"
+
+	"github.com/stretchr/testify/assert"
+	"github.com/stretchr/testify/require"
+
+	"github.com/Wikid82/charon/backend/internal/models"
+)
+
+// TestGetTemplateDB tests that the template database is initialized correctly
+// and can be retrieved multiple times (singleton pattern).
+func TestGetTemplateDB(t *testing.T) {
+	// First call should initialize the template
+	tmpl1, err1 := GetTemplateDB()
+	require.NoError(t, err1, "first GetTemplateDB should succeed")
+	require.NotNil(t, tmpl1, "template DB should not be nil")
+
+	// Second call should return the same instance
+	tmpl2, err2 := GetTemplateDB()
+	require.NoError(t, err2, "second GetTemplateDB should succeed")
+	require.NotNil(t, tmpl2, "template DB should not be nil on second call")
+
+	// Both should be the same instance (singleton)
+	assert.Equal(t, tmpl1, tmpl2, "GetTemplateDB should return same instance")
+}
+
+// TestGetTemplateDB_HasTables verifies the template DB has migrated tables.
+func TestGetTemplateDB_HasTables(t *testing.T) {
+	tmpl, err := GetTemplateDB()
+	require.NoError(t, err)
+	require.NotNil(t, tmpl)
+
+	// Check that some key tables exist in the template
+	var tables []string
+	rows, err := tmpl.Raw("SELECT name FROM sqlite_master WHERE type='table'").Rows()
+	require.NoError(t, err)
+	defer rows.Close()
+
+	for rows.Next() {
+		var name string
+		require.NoError(t, rows.Scan(&name))
+		tables = append(tables, name)
+	}
+
+	// Verify some expected tables exist
+	assert.Contains(t, tables, "users", "template should have users table")
+	assert.Contains(t, tables, "proxy_hosts", "template should have proxy_hosts table")
+	assert.Contains(t, tables, "settings", "template should have settings table")
+}
+
+// TestOpenTestDB creates a basic test database.
+func TestOpenTestDB(t *testing.T) {
+	db := OpenTestDB(t)
+	require.NotNil(t, db, "OpenTestDB should return non-nil DB")
+
+	// Verify we can execute basic SQL
+	var result int
+	err := db.Raw("SELECT 1").Scan(&result).Error
+	require.NoError(t, err)
+	assert.Equal(t, 1, result)
+}
+
+// TestOpenTestDB_Uniqueness ensures each call creates a unique database.
+func TestOpenTestDB_Uniqueness(t *testing.T) {
+	db1 := OpenTestDB(t)
+	db2 := OpenTestDB(t)
+
+	require.NotNil(t, db1)
+	require.NotNil(t, db2)
+
+	// Create a table in db1
+	err := db1.Exec("CREATE TABLE test_unique (id INTEGER PRIMARY KEY)").Error
+	require.NoError(t, err)
+
+	// Insert a row in db1
+	err = db1.Exec("INSERT INTO test_unique (id) VALUES (1)").Error
+	require.NoError(t, err)
+
+	// db2 should NOT have this table (different database)
+	var count int64
+	err = db2.Raw("SELECT COUNT(*) FROM sqlite_master WHERE type='table' AND name='test_unique'").Scan(&count).Error
+	require.NoError(t, err)
+	assert.Equal(t, int64(0), count, "db2 should not have db1's table")
+}
+
+// TestOpenTestDBWithMigrations tests the function that creates a DB with migrations.
+func TestOpenTestDBWithMigrations(t *testing.T) {
+	db := OpenTestDBWithMigrations(t)
+	require.NotNil(t, db, "OpenTestDBWithMigrations should return non-nil DB")
+
+	// Verify that tables were created
+	var tables []string
+	rows, err := db.Raw("SELECT name FROM sqlite_master WHERE type='table' AND name NOT LIKE 'sqlite_%'").Rows()
+	require.NoError(t, err)
+	defer rows.Close()
+
+	for rows.Next() {
+		var name string
+		require.NoError(t, rows.Scan(&name))
+		tables = append(tables, name)
+	}
+
+	// Should have key tables from the migration
+	assert.Contains(t, tables, "users", "should have users table")
+	assert.Contains(t, tables, "proxy_hosts", "should have proxy_hosts table")
+	assert.Contains(t, tables, "settings", "should have settings table")
+}
+
+// TestOpenTestDBWithMigrations_CanInsertData verifies we can actually use the migrated DB.
+func TestOpenTestDBWithMigrations_CanInsertData(t *testing.T) {
+	db := OpenTestDBWithMigrations(t)
+	require.NotNil(t, db)
+
+	// Create a user
+	user := &models.User{
+		UUID:         "test-uuid-123",
+		Name:         "testuser",
+		Email:        "test@example.com",
+		PasswordHash: "fakehash",
+	}
+	err := db.Create(user).Error
+	require.NoError(t, err, "should be able to create user in migrated DB")
+	assert.NotZero(t, user.ID, "user should have an ID after creation")
+
+	// Query it back
+	var fetched models.User
+	err = db.First(&fetched, user.ID).Error
+	require.NoError(t, err)
+	assert.Equal(t, "testuser", fetched.Name)
+}
+
+// TestOpenTestDBWithMigrations_MultipleModels tests various model operations.
+func TestOpenTestDBWithMigrations_MultipleModels(t *testing.T) {
+	db := OpenTestDBWithMigrations(t)
+	require.NotNil(t, db)
+
+	// Test ProxyHost
+	host := &models.ProxyHost{
+		UUID:        "test-host-uuid",
+		DomainNames: "example.com",
+		ForwardHost: "localhost",
+		ForwardPort: 8080,
+	}
+	err := db.Create(host).Error
+	require.NoError(t, err, "should be able to create proxy host")
+
+	// Test Setting
+	setting := &models.Setting{
+		Key:   "test_key",
+		Value: "test_value",
+	}
+	err = db.Create(setting).Error
+	require.NoError(t, err, "should be able to create setting")
+
+	// Verify counts
+	var hostCount, settingCount int64
+	db.Model(&models.ProxyHost{}).Count(&hostCount)
+	db.Model(&models.Setting{}).Count(&settingCount)
+
+	assert.Equal(t, int64(1), hostCount)
+	assert.Equal(t, int64(1), settingCount)
+}