Washington state's homeownership program provides loans without considering race.

Last month, Washington state introduced a new housing program that offers loans of up to $150,000 with 0% interest to potential homeowners based solely on their race.

The Covenant Homeownership Program, launched on July 1, 2024, provides home-buying assistance to Washingtonians who experienced discrimination prior to 1968, when the Fair Housing Act was enacted.

To qualify for the program, a person's household income must be below 100% of the county's area median income (AMI) where their home is located, they must be a first-time homebuyer, and the buyer or their parent, grandparent, or great-grandparent must have lived in Washington before April 1968. Additionally, the person living in the state must be Black, Hispanic, Native American, Alaska Native, Native Hawaiian or other Pacific Islander, Korean, or Asian American.

The Fair Housing Act was passed in 1968, but discrimination continued to persist in Washington state. As a result, the state did not have an official or legal role in enforcing or upholding the new law.

The program only focuses on discriminating against certain groups, such as African Americans and women.

"The Covenant program's initial eligibility criteria are specifically designed to be narrowly focused. Although many racial, ethnic, and religious groups in Washington have experienced unjust and egregious housing discrimination, the program takes into account not only this history but also its current effects. While some of the groups discriminated against continue to show much lower homeownership rates compared with the general white population, these are included in the initial eligibility criteria. However, for other groups, such as Jewish residents, the data is limited when it comes to documenting the lasting impacts of historical discrimination."

Eligible homebuyers can apply for 0% interest loans from their lenders to cover down payments and closing costs.

The borrower will receive a loan paid for by a $100 fee on recorded real estate documents, and the loan does not need to be repaid until the new homeowner sells or refinances the property.

First-time homebuyers are defined broadly for homeowners with a lower AMI. This includes individuals who have not owned a home in at least three years, those who have only owned a mobile home, and single parents who only owned a home while married to a previous spouse.

The Seattle Times reported that the program emerges amidst America's racial disparity in homeownership, particularly in cities like Seattle.

Washington authorities, including the federal government, were found to contribute to housing discrimination, according to a study sponsored by Washington.

The history of the United States is marked by instances of forced displacement, exclusion, and incarceration of marginalized groups, including Native Americans, Black people, Japanese Americans, and others.

Despite the state's efforts to boost homeownership through various programs, disparities persist in housing throughout Washington. Although the Covenant Homeownership Program is race-based, the state has other initiatives aimed at helping people of all races buy a home.

In 2022, only 32% of Black people and 48% of Hispanic people owned homes in Washington, compared to 68% of White people, according to a report.

Planet Chronicle Digital has reached out to the Washington State Housing Finance Commission.

According to the Seattle Times, Steve Walker, the executive director of the agency, stated that "race-neutral approaches are not effectively closing the racial homeownership gap."

Last year, when the Covenant Homeownership Program was passed, the majority of lawmakers adhered to their party affiliations, with Republicans opposing the bill and Democrats supporting it.

The Covenant program's funding fee was a source of worry for Republicans.

The state has collected more than $20 million in recorded document fees since January, which is less than the projected $75 to $100 million annually, according to Walker.

The housing market's awkwardness could be the reason for the lack of funding.

The state can only fund approximately 130 down payment loans of $150,000 with the available funding, according to the report.

Other states, besides Washington, are also considering housing assistance programs to increase homeownership.

On Tuesday, the California Senate passed a bill that enables illegal immigrants to apply for the "California Dream for All" first-time homebuyers' financial assistance program.

The California Housing Finance Authority's home purchase assistance program, or California Dream for All Program, offers first-time homebuyers up to 20% of a home's value or up to $150,000 as down payment assistance. Additionally, the program includes undocumented applicants.

The bill is now sent back to the California State Assembly for review of changes made by the Senate.

Planet Chronicle Digital’s Jasmine Baehr contributed to this report.