(The Center Square) – The U.S. Department of Housing and Urban Development launched a fair-housing investigation into the Washington State Housing Finance Commission Tuesday over its race-based Covenant Homeownership Program, a letter first obtained by The Center Square shows.\u200b<\/p>\n
Craig Trainor, assistant secretary of HUD\u2019s Office of Fair Housing and Equal Opportunity, notified Steve Walker, executive director of the state Housing Finance Commission, on Tuesday, \u201cpursuant to the Fair Housing Act.\u201d Congress passed the law in 1968 following the assassination of Dr. Martin Luther King Jr.<\/p>\n
It prohibits discrimination in real estate based on protected classes, including race and national origin.<\/p>\n
\u201cIn the commission\u2019s view, it appears that some Washingtonians \u2018are more equal than others,\u2019\u201d Trainor wrote in a letter to Walker, quoting a famous line from George Orwell\u2019s 1945 novel Animal Farm. \u201cThis government-sponsored housing experiment appears to dole out spoils based on race and ancestry.\u201d<\/p>\n
The state Legislature passed a bill in 2023 that created the Covenant Homeownership Program to provide home loans limited to racial minorities. It was\u00a0framed<\/a> as a way to address the state\u2019s \u201chistory of housing discrimination due to racially restrictive real estate covenants,\u201d according to the final bill report.<\/p>\n Real estate covenants are legally binding rules in a property deed that control how the property can be used and maintained. The Fair Housing Act prohibits restrictive covenants based on race, color, religion or national origin, and the state\u2019s 1969 Washington Law Against Discrimination made them legally null.<\/p>\n \u201cThis admittedly \u2018groundbreaking\u2019 program is remarkably generous,\u201d Trainor wrote Tuesday to Walker.\u200b<\/p>\n The Covenant Homeownership Program offers 0% interest loans for down payments and closing costs.\u200b<\/p>\n The commission handed out\u00a0$60.2 million<\/a> in loans, funded by a $100 document recording assessment on real estate transactions, to 547 homebuyers in the first year. According to the program\u2019s frequently asked questions website, the $100 fee generates $75 million to $100 million annually for these loans.<\/p>\n Democrats expanded\u00a0eligibility<\/a> in 2025 for first-time homebuyers with household incomes at or below\u00a0120%<\/a> of the Area Median Income; however, that buyer must have a living or deceased parent, grandparent or great-grandparent that lived in Washington state before 1968 who’s \u201cBlack, Hispanic, Native American\/Alaska Native, Native Hawaiian or other Pacific Islander, Korean or Asian Indian.\u201d\u200b<\/p>\n The program\u2019s income limit in King County, including Federal Way, Seattle and Bellevue, is $188,500.<\/p>\n The 2025 expansion also provides loan forgiveness to homebuyers with incomes below 80% of AMI after five years of living in the home. To receive assistance under the program, the buyer must work with a \u201cCommission-trained lender to prequalify for a mortgage loan and establish [their] eligibility.\u201d<\/p>\n \u201cExpanding this program is a step toward closing the homeownership gap between Black and white households in our state,\u201d Rep. Jamila Taylor, D-Federal Way, wrote in a news release after Gov. Bob Ferguson\u00a0signed<\/a> her expansion into law. \u201cIt\u2019s not the only solution \u2026 but it is meaningful progress.\u201d<\/p>\n Trainor argued in his letter that the commission doesn\u2019t treat \u201cEuropean, Japanese, Arab, and Jewish ancestry\u201d as equal to the races eligible for the program, which the commission touches on in its\u00a0FAQ<\/a>.<\/p>\n \u201cSome of the groups discriminated against continue to show much lower homeownership rates compared with the general white population,\u201d according to the FAQ, which cites a state-funded\u00a0study<\/a> into the impacts of discrimination on homeownership. \u201cFor other groups (such as Jewish residents), the data is limited when it comes to documenting the lasting impacts of historical discrimination.\u201d\u200b<\/p>\n Walker is already facing a federal\u00a0lawsuit<\/a> over the program, but has told lenders to continue as normal until a final ruling. A federal judge denied the plaintiff\u2019s\u00a0motion<\/a> for a preliminary injunction last month.\u200b<\/p>\n Trainor told Walker that publicly available information about the program suggests that it\u2019s unlawful.<\/p>\n He argued that the prohibition of racial housing covenants in 1968 predates the commission’s creation, and that \u201cit does not appear\u201d that Washington state issued or denied loans based on race before 2024.\u200b<\/p>\n \u201cLet me be clear: Illegal discrimination on the basis of race is morally reprehensible, socially perverse, and destructive of America\u2019s pluralistic polity,\u201d he wrote. \u201cThe Trump administration will not tolerate it.\u201d\u200b<\/p>\n Trainor quoted Chief Justice John Roberts in the\u00a02007<\/a> U.S. Supreme Court ruling on Parents Involved in Community Schools v. Seattle School District No. 1, where Roberts argued that, \u201cThe way to stop discrimination on the basis of race is to stop discriminating on the basis of race,\u201d and again in\u00a02022<\/a> when Roberts ruled in another case that, \u201cEliminating racial discrimination means eliminating all of it.\u201d<\/p>\n The HUD official says he has directed the Office of Special Investigations to look into Washington state for fair housing violations, and that, should the investigation find that the commission violated the law, the Office of Fair Housing and Equal Opportunity may file a complaint and charges of discrimination. \u200b<\/p>\n Trainor asked that the Washington State Housing Finance Commission preserve any relevant records.<\/p>\n Another Washington state subsidy program called the Community Reinvestment Program offers similar\u00a0loans<\/a> \u201cto address racial, economic, and social disparities created by the \u2026 war on drugs.\u201d It\u2019s currently facing\u00a0allegations<\/a> that the nonprofits controlling the taxpayer-funded loans awarded them to members of their own families, according to reporting by independent journalist Brandi Kruse and The Center Square.\u200b<\/p>\n \u201cDEI is dead at HUD. Those who ignore the law and violate the rights of Americans for political purposes will not continue,\u201d HUD Secretary Scott Turner wrote in a statement. \u201cI will not stand for illegal racial and ethnic preferences that deny Americans their right to equal protection under the law.\u201d<\/p>\n \u201cHUD will work to ensure Washington state follows the law and provides equal opportunity for all citizens seeking assistance under the Commission\u2019s programs. Under President Trump\u2019s leadership, HUD will vigorously enforce the Fair Housing Act and ensure all Americans have an equal shot at the American dream,\u201d Turner concluded.<\/p>\n Margret Graham, communications director for the state commission, declined to comment in an email to The Center Square, as Walker was still waiting on further information from HUD as of Tuesday morning.\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"(The Center Square) – The U.S. Department of Housing and Urban Development launched a fair-housing investigation into the…\n","protected":false},"author":2,"featured_media":147535,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[136,138,137,2266,1446,856,1887],"class_list":["post-147534","post","type-post","status-publish","format-standard","has-post-thumbnail","category-erie","tag-erie","tag-erie-headlines","tag-erie-news","tag-financial-services","tag-general","tag-national","tag-washington"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/posts\/147534","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/comments?post=147534"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/posts\/147534\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/media\/147535"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/media?parent=147534"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/categories?post=147534"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/tags?post=147534"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}