HUD Targets Washington’s Race-Based Homebuying Program in Civil Rights Probe

The US Department of Housing and Urban Development has opened an investigation into Washington state’s Covenant Homeownership Program, raising serious questions about whether the state crossed the line from addressing past wrongs into creating new ones.

Washington officials launched the program in 2024 as a form of housing reparations. They said it was meant to respond to historic injustices like redlining and racially restrictive housing covenants. On the surface, that may sound like an effort to correct past discrimination. But the program’s structure has drawn sharp criticism because it determines eligibility not just by financial need, but by race and ancestry.

Under the program, certain first-time homebuyers can receive major benefits, including zero-interest loans to help cover down payments and closing costs. Those loans do not have to be repaid until the home is sold or refinanced, and in some cases they can be fully forgiven after five years.

The controversy centers on who qualifies.

Applicants must show that they, or a parent or grandparent, lived in Washington before April 1968, when housing discrimination was formally outlawed. But even that is not enough. The program is limited to specific racial and ethnic groups, including Black, Hispanic, Native American, Alaska Native, Native Hawaiian or other Pacific Islander, Korean, and Asian Indian applicants.

That means others with documented histories of housing discrimination in Washington are left out. Jews and people of Chinese descent, for example, were identified in a state-commissioned study as having faced severe discrimination, yet they are excluded. White residents are excluded as well.

Critics argue that this creates a government-approved system of favoritism, where the state decides which citizens are deserving of help and which are not. Just as troubling, the program is funded through a $100 fee on recorded documents, meaning many Washington residents are helping pay for benefits they are barred from receiving.

HUD appears to see that as a serious civil rights issue. The agency has launched a formal investigation into whether the program violates the Fair Housing Act, which prohibits discrimination in housing-related transactions based on race or national origin.
The federal probe follows the Washington State Housing Finance Commission’s 2023 adoption of a Racial Equity Strategy Plan, which laid the foundation for race-conscious housing policies. The Covenant Homeownership Program became the commission’s first openly race-based lending initiative.

HUD Secretary Scott Turner made the administration’s position unmistakably clear. He said DEI has no place at HUD and warned that government agencies cannot violate Americans’ rights in the name of political ideology. He also pledged strong enforcement of federal civil rights protections under President Donald Trump.

Federal officials say the evidence already available suggests the program may be engaging in unlawful discrimination. If that is confirmed, Washington state could face formal charges or even a referral to the Department of Justice.

The program was approved by Democrats in the state legislature through House Bill 1474 in 2023, with support from Rep. Jamila Taylor, Sen. John Lovick, and Rep. Frank Chopp. Republicans largely opposed the measure and warned from the beginning that it was likely to trigger legal challenges.

HUD has also directed the Washington State Housing Finance Commission to preserve all records connected to the program as the investigation moves forward.

This case may become a major test of whether state governments can impose race-based reparations policies without violating federal law. More broadly, it raises a question many Americans are asking: does justice mean equal treatment under the law, or does it now mean replacing one form of discrimination with another?