Washington state launches controversial homebuyer assistance program offering zero-interest loans based on racial criteria, prompting debate over equity versus discrimination.
Key Takeaways
- Washington’s Covenant Homeownership Program offers 0% interest loans up to $150,000 to first-time homebuyers based on racial criteria, targeting those who faced discrimination before the 1968 Fair Housing Act.
- Eligibility requires applicants or their ancestors lived in Washington before April 1968 and belong to specific racial groups, excluding some historically discriminated groups like Jewish Americans.
- The program aims to address significant homeownership gaps, with only 32% of Black and 48% of Hispanic people owning homes in Washington compared to 68% of White people.
- Recent expansions include raising income eligibility from 100% to 120% of area median income and offering loan forgiveness after five years for lower-income households.
- Critics argue the program constitutes reverse discrimination by rewarding individuals based on race rather than personal experience with discrimination.
Program Structure and Funding
The Covenant Homeownership Program, launched by Washington state offers zero-interest loans up to $150,000 for down payments and closing costs to eligible homebuyers. The program targets racial groups that historically faced housing discrimination prior to the 1968 Fair Housing Act. Washington State Governor Bob Ferguson signed into law prioritizing down payment assistance for first-time home buyers if they meet a certain skin color. Eligible applicants must have household incomes below 100% of the area median income, be first-time homebuyers, and either themselves or their ancestors must have lived in Washington before April 1968.
Funding for the program comes from a $100 fee collected on recorded real estate documents throughout the state. With its current funding model, the program can support approximately 130 loans at the maximum amount of $150,000. Recipients must repay the loans when they sell or refinance the property, creating a revolving fund to support future homebuyers. According to program officials, the initiative has already helped over 200 families across more than 20 counties achieve homeownership.
WASHINGTON STATE
"Governor Bob Ferguson just signed into law changes to the most outrageous, illegal reparations program in the entire country. It now GIFTS down payments, averaging $120,000, to black first-time homebuyers without ANY proof of direct housing discrimination." pic.twitter.com/8azJk76nQS
— Republicans for Asotin County (@AsotinCountyGOP) April 28, 2025
Eligibility Requirements and Recent Expansions
The program’s eligibility criteria specifically include Black, Hispanic, Native American, Alaska Native, Native Hawaiian, Pacific Islander, Korean, and Asian American applicants. Notably, other groups that historically faced housing discrimination, such as Jewish Americans, are excluded from the program. The Washington Housing Finance Commission addressed this exclusion by explaining their approach to eligibility determination.
Recent changes to the program include expanding income eligibility from 100% to 120% of the area median income and introducing loan forgiveness after five years for households earning 80% or less of the area median income. These expansions aim to increase accessibility and impact for targeted communities struggling with homeownership barriers.
Addressing Housing Disparities vs. Concerns of Discrimination
The program stems from significant homeownership disparities in Washington state. According to data cited by officials, only 32% of Black households and 48% of Hispanic households own homes, compared to 68% of white households. These disparities have persisted despite fair housing laws enacted decades ago, suggesting the ongoing impact of historical discrimination practices.
However, critics have raised concerns about the program’s race-based approach, arguing it constitutes reverse discrimination. Detractors maintain that the program rewards individuals based solely on their racial background rather than personal experiences with discrimination. They question whether it’s appropriate to provide benefits to people who haven’t personally experienced historical discrimination while excluding others based on ancestry. These critics suggest the approach may create further division rather than healing and potentially conflict with equal protection principles under the law.
Similar Initiatives in Other States
Washington’s program reflects a growing trend of race-conscious housing assistance initiatives across states. California, for example, is considering legislation that would expand its “California Dream for All” program to include undocumented immigrants. That program offers up to 20% of a home’s value or $150,000 in down payment assistance to eligible applicants. The spread of such programs indicates increasing policy attention to addressing historical inequities in housing access, though they continue to generate significant debate about the appropriate methods for addressing past discrimination.
Sources:
Washington state’s homeownership program offers loans based solely on race
Woke governor signs law providing assistance to first-time home buyers, provided they aren’t White
