Washington state’s new homebuyer assistance law offers zero-interest loans up to $150,000 to non-white applicants, sparking fierce debate about whether it promotes racial equity or violates equal treatment principles.
Key Takeaways
- Washington’s Covenant Homeownership Program is offering race-based loans up to $150,000 with 0% interest to specific racial groups.
- Eligible applicants must have household incomes below area median income, be first-time homebuyers, and belong to specific racial groups that faced historical discrimination.
- The program aims to address significant racial homeownership gaps in Washington, where only 34% of Black households own homes compared to 69% of white households.
- Critics argue the program constitutes reverse discrimination by prioritizing certain racial groups while excluding others who also faced historical discrimination.
- Program expansion includes raising income eligibility limits and offering loan forgiveness after five years for lower-income households.
Program Details and Eligibility Requirements
The Covenant Homeownership Program offers zero-interest loans up to $150,000 for down payments and closing costs to eligible homebuyers in Washington state. To qualify, applicants must have household incomes below 100% of the area median income, be first-time homebuyers, and belong to specific racial groups: Black, Hispanic, Native American, Alaska Native, Native Hawaiian, Pacific Islander, Korean, or Asian American. Additionally, the applicant or their ancestors must have lived in Washington before April 1968, when the Fair Housing Act was enacted.
The program is funded through a $100 fee collected on recorded real estate documents, with loans repayable when the homeowner sells or refinances the property. Due to limited funding, the program can support approximately 130 down payment loans at the maximum amount. Despite its limited scope, supporters point to its success in helping over 200 families in more than 20 counties access homeownership through the initial version of the program.
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
Addressing Historical Discrimination and Current Disparities
The Covenant program specifically targets racial groups that faced housing discrimination prior to the 1968 Fair Housing Act, with a focus on addressing persistent homeownership gaps. In Washington state, only 34% of Black households and 48% of Hispanic households own homes, compared to 69% of white households. These disparities have profound implications for wealth building and financial stability across generations, as homeownership remains a primary path to wealth accumulation for most American families.
Recent expansions to the program increase income eligibility from 100% to 120% of the area median income and introduce loan forgiveness after five years for households earning 80% or less of the area median income. This reflects an effort to broaden the program’s impact while maintaining its focus on addressing historical inequities in homeownership rates.
Legal and Ethical Concerns
Critics of the Covenant Homeownership Program argue that race-based eligibility criteria constitute a form of reverse discrimination that violates equal protection principles. They note that the program excludes certain groups that also faced historical discrimination, such as Jewish Americans, based on what the Housing Finance Commission describes as “limited data” on lasting impacts. This selective approach has raised questions about fairness and constitutional compliance.
Some observers argue that the program rewards individuals who have not personally experienced historical discrimination while potentially punishing others for ancestral actions. Others question whether race-based programs can withstand legal scrutiny given recent Supreme Court decisions limiting race-conscious policies. As Washington implements this program, similar initiatives are being considered in other states, including California’s “California Dream for All” program, which offers up to 20% of a home’s value in down payment assistance and includes undocumented immigrants among eligible applicants.
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
