The U.S. Department of Housing and Urban Development’s Office for Fair Housing and Equal Opportunity announced on Mar. 24 that it has begun an investigation into the Washington State Housing Finance Commission’s Covenant Homeownership Program, citing concerns about potential violations of the Fair Housing Act.
The investigation is significant because the Fair Housing Act prohibits discrimination in housing based on race, color, national origin, religion, sex, familial status, or disability. The outcome could impact how state-level programs are designed to promote equity while complying with federal law.
According to HUD, the Covenant Homeownership Program was launched after the Commission introduced a “Racial Equity Strategy Plan” in 2023 aimed at advancing “antiracist priorities.” The program is described as the commission's first openly race-based housing finance initiative. It offers downpayment and closing cost assistance through a zero-interest secondary loan for first-time homebuyers. Eligibility does not require applicants to be low income; instead, it allows incomes up to 120% of area median income. Low-income borrowers may qualify for complete loan forgiveness after five years of homeownership.
To qualify for this program, applicants must have a parent or grandparent who is black, Hispanic, Native American, Pacific Islander or Indian. According to HUD’s description of the program criteria, people with European, Japanese, Arab or Jewish ancestry do not appear eligible.
Secretary Scott Turner said: “DEI is dead at HUD. Those who ignore the law and violate the rights of Americans for political purposes will not continue.” He continued: “As HUD Secretary, I will not stand for illegal racial and ethnic preferences that deny Americans their right to equal protection under the law. HUD will work to ensure Washington state follows the law and provides equal opportunity for all citizens seeking assistance under the Commission’s programs. Under President Trump’s leadership, HUD will vigorously enforce the Fair Housing Act and ensure all Americans have an equal shot at the American Dream.”
HUD said its investigation aligns with President Trump’s promises regarding civil rights protections and affordable housing free from unlawful discrimination.
