The Trump administration’s Department of Housing and Urban Development (HUD) announced Tuesday that it launched an investigation into a Washington state housing program the agency accused of potentially providing subsidized mortgage assistance to people based on race.
The Washington State Housing Finance Commission was alerted this week that HUD’s Office for Fair Housing and Equal Opportunity would be investigating its Covenant Homeownership Program. The program was established by the state legislature in 2023, which commissioned a report to investigate alleged housing discrimination in the state and how to remedy it. In particular, the program wanted to address racially restrictive housing covenants embedded in the state’s history, which became unenforceable following a Supreme Court ruling in 1948 and were voided altogether in 1969.
The housing program was launched a year later for first-time homebuyers considered “people of color and other historically marginalized communities.” It offered zero-interest loans of up to $150,000 for down payments and closing costs, and the loans did not need to be repaid until the homeowners sold or refinanced the properties, according to Seattle King County REALTORS.
“Generations of systemic, racist, and discriminatory policies have formed barriers to homeownership for Black, Indigenous, and people of color and other historically marginalized communities in Washington state,” Washington Democrat Jamila Taylor said of the bill to establish the program that she helped introduce. “Historically, redlining, racially restrictive covenants, mortgage subsidies and incentives, and displacement have been explicitly outlined practices. To date, racially restricted covenants have been identified in more than 40,000 property deeds across the state.”
But according to HUD, applicants in the program do not need to be from low-income areas, as the income ceiling for the program is 120% of the median income for the area. The agency said in order to qualify, applicants have to have a parent or grandparent of Hispanic, Native American, Pacific Islander, or Indian descent. Meanwhile, HUD highlighted that persons of European, Japanese, Arab, or Jewish ancestry did not appear to qualify for the program.
HUD also points out, citing directions from the Washington housing commission on how to apply for the Covenant Homeownership Program, that the only application process for the program is to call a hotline where prospective applicants speak to “a Commission-trained lender” who then determines whether people meet the program’s eligibility requirements.
Hellbound and Down 