By Chris B. Bennett, The Seattle Medium
The U.S. Department of Housing and Urban Development has launched a federal investigation into Washington state’s Covenant Homeownership Program, a policy designed to expand access to homeownership for communities historically excluded from the housing market.
HUD’s Office of Fair Housing and Equal Opportunity notified the Washington State Housing Finance Commission of the investigation in a March 24 letter, citing concerns that the program’s eligibility criteria may unlawfully consider race or ancestry in determining access to housing assistance.
The investigation comes as the program is expanding access to homeownership for communities historically excluded from the housing market, prompting concerns among supporters that efforts to address long-standing housing inequities may be at risk of being rolled back.
The Covenant Homeownership Program, established by the Washington State Legislature in 2023, was created to address the long-term impacts of discriminatory housing practices by providing down payment and closing cost assistance to first-time homebuyers whose families were affected by those policies.
For decades, practices such as redlining and racially restrictive covenants prevented Black, Indigenous and other communities of color from purchasing homes in many parts of Washington state. Racially restrictive covenants were widely used throughout the early and mid-20th century to prevent nonwhite residents from buying or occupying homes, shaping housing patterns long after they were ruled unenforceable and later outlawed.
Under the program, eligible participants can receive zero-interest secondary loans to assist with purchasing a home, with loan forgiveness available for some lower-income households after maintaining homeownership for a set period. As of November 2025, the program had helped more than 800 families purchase homes across Washington, with dozens more in the process of closing, according to state housing officials.
Recent legislation signed by Gov. Bob Ferguson expanded the program by increasing income eligibility from 100% to 120% of area median income and introducing additional loan forgiveness provisions, allowing more families to qualify.
However, federal officials say the program’s eligibility structure, which includes ancestry-based criteria tied to historically impacted racial and ethnic groups, may violate federal civil rights law. The Fair Housing Act prohibits discrimination in residential real estate-related transactions based on race or national origin, including financial assistance tied to home purchases.
In announcing the investigation, HUD Secretary Scott Turner criticized the program, saying the agency would not allow what he described as unlawful racial preferences in housing policy.
“DEI is dead at HUD. Those who ignore the law and violate the rights of Americans for political purposes will not continue,” said Turner. “HUD will work to ensure Washington state follows the law and provides equal opportunity for all citizens seeking assistance under the Commission’s programs.”
According to HUD, the investigation will determine whether the program violates the Fair Housing Act, including whether its eligibility criteria result in unlawful discrimination. If violations are found, the agency may file a complaint or refer the case to the U.S. Department of Justice.
Supporters of the Covenant Homeownership Program argue that it is a targeted effort to address well-documented historical inequities in housing access and is consistent with federal provisions that allow specialized programs to assist disadvantaged groups.
Lawmakers and housing advocates have pointed to decades of systemic discrimination in Washington’s housing market, including more than 40,000 racially restrictive covenants recorded across the state, as justification for policies aimed at expanding access to homeownership among historically excluded communities.
They also note that significant disparities persist today, with homeownership rates for Black households in Washington remaining far below those of white households, underscoring the long-term impact of those historical barriers.
