SEATTLE — In the Trump administration’s latest attack on Washington’s housing programs, the Department of Housing and Urban Development has launched an investigation into Washington's Covenant Homeownership Program.

HUD claims the down payment assistance program, intended to redress past housing discrimination, violates the Fair Housing Act, which prohibits discrimination in the sale, rental and financing of housing.

The program, launched in 2024 after the state Legislature passed the Covenant Homeownership Act, offers zero-interest loans to help people from historically marginalized communities fund down payments and closing costs.

The investigation is the latest in a series of attacks on programs the Trump administration deems “woke.” Over the last year, the administration has slashed funding for programs that promote diversity, equity and inclusion — especially targeting housing programs.

“DEI is dead at HUD,” HUD Secretary Scott Turner said in a news release on Tuesday. “Those who ignore the law and violate the rights of Americans for political purposes will not continue.”

In a statement, a spokesperson for the Washington State Housing Finance Commission, which operates the program, said the commission would respond to the Office of Fair Housing and Equal Opportunity’s requests for information and noted the program passed with bipartisan support in 2023.

“Along with the Covenant Homeownership Program, the Washington State Housing Finance Commission has an array of other programs offering home loans and downpayment assistance for all low- and moderate-income homebuyers, so that everyone can be supported on their homeownership journey,” spokesperson Margret Graham said.

The Covenant Homeownership Program is intended to address decades of housing discrimination in Washington, which has left racial gaps in homeownership.

The state and its local governments historically played a major role in carrying out and allowing discriminatory policies and practices that created barriers to credit and homeownership for marginalized communities in Washington.

Those practices included racially restrictive covenants that limited some properties to only white owners and redlining — lenders refusing home loans or making it more expensive for marginalized communities.

To qualify for the Covenant Homeownership Program, a first-time homebuyer must show that they lived in the state before April 1968, when the Fair Housing Act outlawed housing discrimination, or that they are the descendant of a parent or grandparent who lived in the state at that time.

State guidelines allow homebuyers to qualify if they are Black, Latino, Native American, Alaska Native, Native Hawaiian or other Pacific Islander, Korean or Asian Indian.

The buyer must make 120% or less of their county’s area median income to qualify for assistance. Last year, the Legislature approved loan forgiveness after five years of ownership for those who made 80% of their area’s median income when they bought their home. (The forgiveness only applies to the down payment assistance loan, not to the main mortgage on the property.)

In HUD’s news release, Turner said he “will not stand for illegal racial and ethnic preferences that deny Americans their right to equal protection under the law.”

“HUD will work to ensure Washington state follows the law and provides equal opportunity for all citizens seeking assistance under the Commission’s programs,” he said. “Under President Trump’s leadership, HUD will vigorously enforce the Fair Housing Act and ensure all Americans have an equal shot at the American Dream.”

This isn’t the first time the program has faced pushback.

In October 2024, the Foundation Against Intolerance and Racism, a New York-based nonprofit that has advocated against what it sees as unfair diversity efforts, filed a lawsuit against the head of the Washington State Housing Finance Commission. The group claimed the commission’s Covenant Homeownership Program violates some homebuyers’ constitutional rights by limiting who qualifies for the program.

In February, a federal judge denied the group’s request to block Washington’s Covenant Homeownership Program, finding that the state has a compelling interest in addressing racial disparities in homeownership.

The Covenant Homeownership Program isn't the first Washington program targeted by the Trump administration.

Last year, President Donald Trump included Seattle's Legacy Homeowner Program under a list entitled “CUTS TO WOKE PROGRAMS,” which highlights initiatives he seeks to defund in his proposed budget.

The program, which HUD awarded $5 million in 2024, provides support to help homeowners with lower incomes develop more housing on their property. In an application for federal funds, the city wrote that the program particularly aims to support communities of color at risk of displacement, who want to add density on their properties but struggle to do so because of “conventional lending practices and greater upfront soft costs.

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