Washington to help first-time homebuyers impacted by discrimination

Washington State has launched a homebuying assistance program to address decades of housing discrimination in the early to mid-20th century. Called the Covenant Homeownership Program, this effort is intended to redress the lasting effects of discrimination on select communities. The program offers zero-interest loans to help fund down payments and closing costs for homebuyers from those communities most impacted by racially restrictive covenants. Loans will not have to be repaid until the homeowner sells or refinances the property.

In the early 1900s, racially restrictive covenants were one of various tools of housing discrimination that often barred people of color and Jewish people from owning certain properties. University of Washington and Eastern Washington University researchers documented tens of thousands of Washington properties once covered by these racial covenants.

The new assistance program is open to Black, Hispanic, Native American, Alaska Native, Native Hawaiian or other Pacific Islander, Korean or Asian Indian homebuyers who can show they either lived in the state prior to April 1968 or are the descendant of a parent or grandparent who lived in Washington at that time. In the state-commissioned study, the authors noted that the qualifying groups continue to face notable homeownership gaps.

The study’s findings informed the program’s design, which requires homebuyers to make the area median income in their county or less. In King County, that number is approximately $147,000 per household. Applicants must not have owned a home in at least three years, have only owned a mobile home, or be a single parent who only owned a home while married to a former spouse.

The new Covenant Homeownership Program isn’t the first way Washington has tried to boost homeownership. Although there exist homebuyer assistance programs open to people of all races, the fact remains that just 32% of Black Washingtonians and 48% of Hispanic residents owned their homes in 2022 (the last time data was available). This is compared to the 68% of white people in the state who own their home. 

As researched and well-intended as the program may be, challenges remain. While the program will offer loans of up to $150,000 to help fund down payments, this may not be enough for the 20% down payment necessary to be competitive in some of the state’s most expensive markets. The program may also face legal challenges given the backlash to affirmative action and other race-conscious programs that have come before it.

This post was based on information found on Seattle Times. 

 

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