HUD launches probe into Washington state’s race-based ‘reparations’ homebuying program

The program, rolled out in 2024, was pitched by state officials as a form of housing reparations, an effort to address historic discrimination such as redlining and racially restrictive covenants. But while framed as a remedy for past injustice, the program excludes some of the very minority groups that were victims of that discrimination.

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Under the Covenant Homeownership Program, select first-time homebuyers can receive generous assistance, including zero-interest loans to cover down payments and closing costs. The loans do not need to be repaid until the home is sold or refinanced, and some borrowers can have the loan fully forgiven after just five years.

Eligibility, however, is determined not just by income or need, but by race and ancestry. Applicants must demonstrate that they, or a parent or grandparent, lived in Washington prior to April 1968, when housing discrimination was outlawed. But even then, only certain racial groups qualify. The program is limited to those who are Black, Hispanic, Native American, Alaska Native, Native Hawaiian or other Pacific Islander, Korean, or Asian Indian.

That leaves out other groups with well-documented histories of housing discrimination in Washington, including Jews and people of Chinese descent, despite a state-commissioned study acknowledging they faced “egregious” discrimination. It also leaves out white people.

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In other words, the state is using taxpayer-backed funding to create a hierarchy of victims, deciding which groups are worthy of assistance and which are not. The program itself is funded through a $100 fee on recorded documents, meaning Washington residents, including those explicitly excluded from eligibility, are helping pay for benefits they cannot receive.

HUD views that as a clear civil rights problem. The agency has opened a formal investigation into whether the program violates the Fair Housing Act, which prohibits discrimination in housing-related transactions on the basis of race or national origin.

The probe follows the Washington State Housing Finance Commission’s adoption of a “Racial Equity Strategy Plan” in 2023, which laid the groundwork for race-conscious housing policies. The Covenant Homeownership Program marked the agency’s first openly race-based lending initiative.

HUD Secretary Scott Turner made clear the administration’s stance, signaling a broader crackdown on race-based government programs. “DEI is dead at HUD,” Turner said. “Those who ignore the law and violate the rights of Americans for political purposes will not continue.”

“I will not stand for illegal racial and ethnic preferences that deny Americans their right to equal protection under the law,” he added, pledging aggressive enforcement of federal civil rights laws under President Donald Trump.

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

The program was approved by Democrats in the state legislature through House Bill 1474 in 2023, with backing from Rep. Jamila Taylor, Sen. John Lovick, and Rep. Frank Chopp. Most Republicans opposed the measure, warning it would lead to legal challenges. Those behind the program recognized its shortfalls and sources previously told The Ari Hoffman Show on Talk Radio 570 KVI that officials expected legal challenges.

HUD has also ordered the Commission to preserve all records related to the program as the federal investigation moves forward.

The case could become a major test of whether states can implement race-based “reparations” policies without running afoul of federal civil rights law, and whether those policies ultimately replace one form of discrimination with another.

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