By Isabel Smith, The Seattle Medium
Long-time Washington state residents could achieve their dreams of homeownership with the help of a new program that the Washington State Housing Finance Commission (WSHFC) is launching July 1.
In May 2023, the Washington State Legislature passed a law creating a program to financially assist prospective homebuyers from certain racial and ethnic groups. The law aims to address the historical housing discrimination that locked many people of color out of the housing market before prices shot up.
On March 22, a research group commissioned by the Legislature released a study outlining recommendations for the specifics of this program — the Covenant Homeownership Program. Its release is a crucial step toward the program’s official launch.
While the study does not determine how the official program will operate, WSHFC is currently developing the program based closely on the study, said Lisa DeBrock, WSHFC’s director of homeownership.
The study identified goals for the Covenant Homeownership Program that guided the research group’s recommendations, Sarah Wolff, a senior associate at Abt Global, said during a public webinar unveiling the study. Abt Global is a consulting and research firm and one of the many organizations that collaborated on the study.
Those goals are to ensure that eligible households receive enough assistance to purchase a decent quality home, serve as many households as feasible and not advantage any particular racial or ethnic group among those eligible.
Based on these goals, the study recommends the program provides down payment assistance loans without interest based on the price of modest-cost and mid-level homes in the buyer’s county and city. In King County, that means individuals could receive an average of $161,797 in down payment assistance toward a modest-cost home.
However, individuals must meet a set of narrowly tailored eligibility requirements.
To qualify, individuals must be first-time homebuyers, have a household income at or below 100% of the Area Median Income (AMI), and be current Washington residents who resided in the state before the enactment of the Federal Fair Housing Act on April 11, 1968, or be a descendant of one.
Individuals can use genealogical records, vital records, church records, military records, public records, wills, census data, newspaper clippings, and other documents that show or reference a person’s address on a specific date to prove familial residency before April 11, 1968.
The study further recommends restricting eligibility to groups experiencing current, collective economic disadvantages, which it determined includes Black, Latino, Native American, Alaska Native, Native Hawaiian, other Pacific Islander, Korean, and Asian Indian homebuyers.
Citing data from the Racial Restrictive Covenants Project, a historical research project at the University of Washington that collects and maps information about historical housing discrimination, the study found significant gaps in the rates of homeownership among white populations versus Black, Latino, and Native Hawaiian-Pacific Islander populations.
The gap between Black and white homeownership is especially stark. The homeownership rate for white households in Washington state is 68.5% whereas the homeownership rate of Black households is only 37.4%. This lags behind the national average rate of 44% for Black homeownership, according to the National Association of REALTORS.
Although all individuals of Asian descent and Jewish residents faced housing discrimination, the study recommends limiting assistance to these groups so that the program does not violate the federal Equal Credit Opportunity Act. The study does recommend further research to determine how the program could serve other groups impacted by housing discrimination.
Homebuyers will access the program’s funds through WSHFC’s network of participating lenders.
“We have over 132 participating lenders and hundreds and hundreds of loan officers statewide, but really a good place for folks who are looking to get started is to call the Washington Homeownership Resource Center,” DeBrock said.
The Washington Homeownership Resource Center runs a hotline that connects prospective homebuyers with lenders, housing counselors, homebuyer education classes, and more. The hotline number is 877-894-4663.
“If you don’t end up being eligible for this program, there are other programs that can help,” said Margret Graham, WSHFC’s communications director. “We really want people to get started. If homeownership is a dream of theirs, we can help make that happen.”
