Washington State recently created its Washington Homeownership Program after passing the Covenant Homeownership Act in 2023. The act was designed to address the discriminatory barriers to homeownership historically faced by Black, Indigenous, Latinx and other people of color.
According to the Washington State Housing Finance Commission, the State of Washington opened the Covenant Homeownership Program in July 2024, giving much-needed assistance to potential homeowners of color. The program offers a no-interest loan that covers both the down payment and closing costs of a home for first-time buyers.
The homeownership program avoids any potential legal challenges by utilizing a “special purpose credit program” to fund it instead of a government agency. This allows funds created through the program to be used for
the assistance of disadvantaged groups in accordance with the Equal Credit Opportunity Act, a federal law. The Covenant Homeownership Act was funded through an additional recording fee on real-estate transactions, which had raised 18 million by July 2024.In a press release, Nicole Bascomb-Green, the chair of the Washington State Housing Finance Commission, said that their program is an attempt at atonement for racist redlining practices.
“This is a proud moment for the Commission and for Washington state. Today we make the promise of the Covenant Homeownership Act a reality for homebuyers. Redlining, racist covenants, and other kinds of state-supported discrimination denied thousands of families in Washington the opportunity to own a home and build wealth for their families,” Bascomb-Green added. “This program finally takes a step toward righting those wrongs by creating a new path to homeownership.”
The Black Home Initiative, the Housing Development Consortium, Rep. Jamila Taylor, Sen. John Lovick, and Rep. Frank Chopp all worked collaboratively to advocate for the bill’s passage, which received bi-partisan support to assist potential homebuyers who are from marginalized communities with deep ties to Washington state.
According to the mandate of the Covenant Homeownership Act and recommendations of the Covenant Homeownership Program Study, the eligibility requirements are as follows:
A Household income at or below 100% of the Area Median Income, (AMI) the applicant must be a First-time homebuyer, either the homebuyer or a parent/grandparent/great-grandparent has to have lived in Washington state before April 1968, and the person who lived in Washington before April 1968 is Black, Hispanic, Native American, Alaska Native, Native Hawaiian or other Pacific Islander, Korean or Asian Indian.
According to the Covenant Homeownership Study, “The study team found that since Washington’s inception, housing discrimination and segregation have been embedded in its history. As noted by the legislature, in the Covenant Homeownership Act: ‘Generations of systemic, racist, and discriminatory policies and practices have created barriers to credit and homeownership for Black, Indigenous, and people of color and other historically marginalized communities in Washington.’ The legislation goes on to note that the homeownership rate for Black, Native American, and people of color and other historically marginalized communities…in Washington is 19 percentage points below that of non-Hispanic white households, and that gap is even wider between Black and white households.”
The report continued, “The law also recognizes that mortgages are harder to obtain and more expensive for historically marginalized communities. Our thorough analysis of hundreds of reports, articles, and documents reveals this pervasive discrimination led to decades of missed wealth-building opportunities for marginalized communities and continues to yield racially and ethnically disparate outcomes in housing, credit, education, health, employment, and other areas.”
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